By: James Pereson and IWF Fellow Naomi Schaefer Riley
Last fall, according to The Chronicle of Philanthropy, the Northwell Health Foundation gave $5 million to “boost turnout at the polls and help people, particularly minorities, get more involved in policy debates.” It seemed an odd choice for the foundation, which is supposed to focus on, well, health. Yet Northwest Health apparently believed that, as the reporter put it, “Helping democracy work better, especially for the poor and disenfranchised, isn’t mission creep. . . . It’s mission critical.”
The Lippman Kanfer Foundation for Living Torah, which promotes Jewish culture and values, has made a similar decision to divert funds from its mission. Because its leaders were, according to the same Chronicle article, concerned by Russian interference in the 2016 election, they have given money to support voter drives in the years since. “American Jews have focused for a long time on what I would call parochial issues, like anti-Semitism, Israel, Jewish community, and Jewish continuity,” the foundation’s president, Aaron Dorfman, explained. “The existential importance of a healthy American democracy isn’t self-evident to the American Jewish community.”
The piece from which the above quotes come was called “Can Philanthropy Save Democracy?” It noted that “Foundation support nationwide for democracy projects jumped 34 percent in 2017, to $553 million, [and] all signs suggest that spending is on the rise.” But such astronomical sums are not enough, according to Stephen Heintz, the president of the Rockefeller Brothers Fund, who recently chastised his colleagues for not spending even more. Heintz argued that “foundations can’t advance their missions without a strong democracy. But less than 2 percent of philanthropic dollars spent in the past decade have been dedicated to efforts to advance voting, promote civic participation, strengthen government, support the news media, and pursue other work that ensures our democracy is functioning well.” The question of whether foundations established to fund other causes should be giving their money to democracy-promotion efforts seemed not to occur to him.
The philanthropic community hasn’t started this debate in a vacuum. Especially in the lead-up to the election this fall, commentators keep asking how we can ensure more voter registration, civic participation, and investigative journalism in an era when Americans are uninformed, uninterested, and disenfranchised. But is it the job of philanthropy to “save democracy?”
One line of argument among those who would answer in the affirmative is that philanthropy is actually responsible for undermining democracy in the first place, so the leaders of charitable foundations owe it to America to undo the damage they’ve caused. Because foundations exist in perpetuity and because they seem to give the wealthy an outsized influence, the argument goes, philanthropy is fundamentally anti-democratic.
In a 2018 interview with New York magazine, Winners Take All author Anand Giridharadas argued that Mark Zuckerberg and his ilk use their charitable work to “create this moral glow. And under the haze created by that glow, they’re able to create a probable monopoly that has harmed the most sacred thing in America, which is our electoral process, while gutting the other most sacred thing in America, our free press. And they do it under the cover of changing the world.” Giridharadas is far from alone in mounting populist attacks on Big Tech. But gerrymandered districts, candidates’ lying about their opponents, and the decline of print journalism are not all problems that can be laid at the feet of tech billionaires. One might just as easily argue that these philanthropists — and the business models that brought them wealth — have helped to inform and enfranchise millions around the world.
Heintz says that “It is because lawmakers see these philanthropic contributions as an essential ingredient in our democracy that Congress long ago gave foundations special privileges to operate as tax-exempt institutions.” He then suggests that “this understanding [should] go two ways — that grant makers [should] make strengthening democracy itself a central part of their work.” His error is in believing that the charitable tax exemption was the result of some sort of quid pro quo. In actuality, the exemption was introduced during World War I as a means of preserving contributions to schools, churches, and scientific organizations. After the federal income tax came into being via constitutional amendment in 1913, Woodrow Wilson and Congress raised the top marginal rate to 77 percent (from 1 percent in 1914) in order to pay for the Great War. Heads of schools, colleges, hospitals, and other such enterprises warned that rich people would stop making charitable donations if they knew the money would just end up in the government’s hands. They suggested that such donations should be given a tax exemption, and Congress agreed. Democracy had nothing to do with it.
Whenever an election yields a result some people do not like, they chalk it up to a problem with democracy — the wrong people voted, or not enough of the right people voted. They then set out to change the rules to effect a different result. But in truth, the issue is not with democracy at all. Just as the philanthropic foundations in this country have a variety of different missions — most of them having nothing whatsoever to do with politics — so the American people have a variety of different interests. Some of them will become engaged in politics. Others will not. The existence of the latter group is not a sign that our system is broken. And if our system isn’t broken, philanthropy doesn’t need to fix it.
James Piereson is a senior fellow at the Manhattan Institute. Naomi Schaefer Riley is a resident fellow at the American Enterprise Institute and a senior fellow at the Independent Women’s Forum.