The Givers – full text of review

This is the full text of my book review that was in the Financial Times last Friday.

At first sight it is hard to see how anyone could object. Many of the world’s richest people are devoting vast sums towards helping to solve some of the world’s most pressing problems. In some cases, the causes are politically contentious topics, but often they relate to areas of seemingly universal concern such as education and medical research.

One might think the contemporary obsession with economic inequality would only add to the appeal of the new philanthropy. After all, the world’s richest people are giving away their fortunes to benefit those who, by definition, are far worse off financially.

However, the critics are vociferous. They charge the new generation of philanthropists with using their wealth to exert an outsized influence on key areas of public interest. In effect, the wealthy are accused of undermining democracy. In addition, they are charged with setting up foundations and other organisations as a way of sometimes circumventing income taxes and estate taxes.

The Givers, by David Callahan, the founder and editor of the Inside Philanthropy website, is a balanced account of the rise of the new philanthropy in the US. Although the tradition of giving is long established, its exponents are more numerous and more influential than ever. He shows who the new philanthropists are, what causes they favour and what motivates them. He also considers the charge that the rising power of philanthropy is pushing ordinary Americans even farther into the margins of civic life.

Perhaps Callahan’s most striking finding is that, by many dimensions, the new philanthropists are a diverse lot. They come in a wide variety of ages, levels of educational attainment and preoccupations. Admittedly almost all of them are white males, but an increasing number are women.

Many do not fit the traditional mould of fiscal conservatism and support for the free market. On the contrary, more and more of them support what are often regarded as liberal causes. It is true, for example, that the brothers Charles and David Koch are well known for supporting conservative and libertarian groups. Less appreciated is that support for lesbian, gay, bisexual and trans rights has some wealthy backers. Take the Williams Institute, a centre for research into LGBT law and policy at the University of California, Los Angeles, which was established with a $2.5m gift from Chuck Williams, a wealthy donor.

Many other philanthropists see their giving as funding practical help, rather than making any sort of political statement. Their giving is determined by expert assessments of what might achieve the best results. The Bill & Melinda Gates Foundation is perhaps the archetypal example of this trend, with its focus on education, world health and community giving.

Diverse though they may be, the various forms of philanthropy and donor preferences have one thing in common: they all involve the wealthy to some degree exerting an influence on society’s priorities — for example, on which diseases to tackle or which forms of education they see as preferable.

The new philanthropy is on the rise at the same time as the US government appears less able to solve big problems or even efficiently manage routine services. For example, the number of charter schools — which have greater autonomy from state control than traditional publicly funded schools — is growing. Meanwhile, even public (state) universities in the US are increasingly dependent on philanthropic funding.

The net effect is that many ordinary Americans feel marginalised from civic life. Key decisions on how their communities are run seem to have been ceded to the rich in this new gilded age.

There is a risk of exaggerating the role of philanthropy in creating this sense of marginalisation. Indeed, Callahan is right to emphasise that even the billions donated by philanthropists are dwarfed by the scale of the problems they are attempting to address. The level of government spending also greatly exceeds philanthropic giving in many areas.

Callahan’s solution, at least in relation to the philanthropic sector itself, includes stronger watchdogs and greater transparency. But while such proposals may have merits, they fail to get to the core of the problem — that democracy seems to have lost its vitality in the US and indeed in Europe. The broader challenge is one of a democratic renewal that involves the people as a whole, the demos, in the political process.

The Givers: Money, Power and Philanthropy in a New Gilded Age, by David Callahan, Knopf