There Is Such a Thing As Too Much Giving

The Zuckerbergs' billion dollar gift threatens to undermine the common good

Posted Feb 15, 2016

Mark Zuckerberg and Priscilla Chan’s pledge to give away 99 percent of their estimated $45 billion stock-holdings over their lifetime is breathtaking. They intend the money to go to causes such as fighting disease and improving education.

Some have questioned their motivation. But whatever it may be, such as receiving tax write-offs or promoting their images, the gesture is magnanimous beyond imagination. Giving such a stupendous sum for social good deserves much admiration.

So it is a little churlish to raise concerns about their generosity. But there are serious matters to consider.

Typically philanthropy is funneled through nonprofit foundations or organizations. The Zuckerbergs’ giving, however, has taken a different route by establishing a limited liability company, thereby allowing the family to use the money as they see fit. They may choose to invest in companies, lobby for legislation and seek to influence public policy debates, all of which nonprofits are restricted from doing under tax laws. That said, whatever the return, the Chan Zuckerberg Initiative, as it is known, must take its profits from the investments and use them for future projects, not personal gain.

The advantage of making the initiative a LLC is that the Zuckerbergs aren’t answerable to a board, stockholders or a host of government laws that regulate nonprofits, thereby being able to direct the funds in ways they see most effective.

And there’s the rub: spending billions of dollars on programs meant for the common good without public input or control means that the Zuckerbergs and other philanthropic billionaires, by virtue of their wealth, distort public priorities.

However well intentioned, philanthropy at this level, without public input, subverts the essence of democracy. Citizens, through the political processes, should be part of the process to determine what is most important for the common good.

In a plutocracy, the wealthy, make public policy. What the rich choose to support may very well be good—Carnegie libraries and Rockefeller universities, for example—and supplement government endeavors. However, it may also be used for less desirable purposes. Even though universities and libraries were private nonprofits, the government still exercised some control while under approach taken by the Zuckerbergs and other megaphilanthropists the only government oversight is to ensure that the endeavors aren’t illegal.

In a political system that has become as dysfunctional as state houses and Washington, it is tempting to look for private solutions for public needs. In fact, such an approach fits one political ideology that views government as the problem and the private sphere as the solution for all things. But what we see with the Gateses and Zuckerbergs is qualitatively different than turning government-run programs over to private charities.

“It's a little scary," said Kathleen McCarthy, director of the Center for the Study of Philanthropy at the City University of New York. “With sums of that size, where should we draw the line? What role should the uber-rich have in shaping public policies and public opinion?"

Huge sums don’t merely supplement public spending; they subvert it. Outsized funding for medical research will be determined by what the Zuckerbergs think important, not the medical community; vast monies given to schools can undermine support for publicly funded and directed education. Under the control of these philanthropies, institutions meant for the common good move from the government or citizen boards to those who are accountable to no one but themselves.

There is a temptation to succumb to the double incentive of lower taxes and more effective programs, but the price to be paid is very high. It is the defeat of democracy by exhaustion.

So kudos to all those billionaires who realize that their good fortune must be shared by all. But it is also a warning that power corrupts and absolute power corrupts absolutely, not necessarily those who are giving away their fortunes but a citizenry that has given away its right to determine for itself what it deems important and worthy.