Stop telling rich folks to give more to charity

Walmart and the rise of philanthro-shaming.

June 17, 2014
Benjamin Soskis is a fellow at the Center for the Study of Nonprofit Management, Philanthropy and Policy at George Mason University. He is currently writing a book on the history of the critique of philanthropy.

Rob Walton at his company’s annual shareholders meeting in Fayetteville, Ark. (Rick Wilking/Reuters)

By now, the Walton family, the nation’s richest through its ownership stake in Walmart, must have developed a pretty thick hide. They have long been subjected to intense criticism regarding the massive retailer’s allegedly exploitative labor practices. But this month, they absorbed a blow at a particularly sensitive spot: their philanthropic self-regard.

In a report entitled “The Phony Philanthropy of the Walmart Heirs,” a union-backed group, Walmart 1 Percent, argued that the enormous size of the Walton Family Foundation — it can claim total assets of $2 billion and was recently ranked as one of the top foundations in terms of annual giving — should not be taken as a measure of the family’s generosity.

Nearly all the foundation’s resources come from a handful of trusts set up with assets provided by Sam Walton, Walmart’s founder, his wife Helen, his son John, or their estates. The next generation of living heirs has done little to add to its coffers. According to the report, based on analysis of 23 years of tax returns, the heirs have donated to the family foundation a mere .04 percent of their present net worth of some $140 billion. As the nation’s richest family, the report says, the Waltons “have enough wealth and power to literally change the world.” And they haven’t — at least not for the better. (The Walton Family Foundation has responded by claiming that the entire family participated in decisions regarding the family’s wealth and that it does not make sense to categorize the contributions generationally).

The report represents a new phenomenon of this latest Gilded Age: the rise of philanthro-shaming. Blame the convergence of two related trends: a faith in philanthropy to render lasting social change and an uneasiness with the oversized fortunes concentrated at the cloud-covered apex of the income scale. Combined, they have led the public to scrutinize more carefully the charitable pretensions of the nation’s richest citizens. Philanthro-shaming suggests the promise — but also some of the perils — of this new regime of philanthropic accountability.

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The nation experienced its first major bout of philanthro-shaming during the original Gilded Age, at the turn of the last century. The creation of massive industrial fortunes led to intense public focus on the responsibilities of great wealth. And a heightened sensitivity to inequality placed an even greater burden on large-scale giving. Enterprising journalists began compiling lists of the nation’s millionaires and determining who donated the most — and the least. And some of them began to issue demands that these philanthropic slackers shape up. Such calls bumped up against an older, biblically-rooted mode of voluntary giving, one that had prioritized discreet, warm-hearted charity — the kind in which the right hand had little idea what the left was doing. But the new imperatives for philanthropic accountability challenged this tradition.

“It is a hopeful sign of the times,” declared the Boston Globe in 1892, “that many rich men, who are not naturally generous or beneficent, are being forced by a healthy public sentiment to gifts, which they would not donate through the natural promptings of their own hearts.”

That same tension, between a spirit of private voluntarism and public coercion, runs through these latest efforts to goad billionaires into greater acts of giving. Earlier this year, for instance, salesforce.com founder Marc Benioff called out his fellow tech billionaires for their lack of generosity to Bay Area anti-poverty programs. He’s urged every major company in the San Francisco area to pledge $500,000 to a local philanthropy, and has signaled his willingness to expose those CEOs who have been slow to reach into their pockets.

In March, Inside Philanthropy, an online industry publication, compiled a list of tech giving based on relative generosity — overall giving relative to net worth — and made sure to tabulate the least generous tech moguls, too (Amazon’s Jeff Bezos and Google’s Larry Page were among those singled out). Then there’s the Giving Pledge, the campaign championed by Bill Gates and Warren Buffett to convince their fellow billionaires to join them in committing at least half their wealth to philanthropy. Although Gates and Buffett have shied away from applying public pressure to potential signatories, the campaign has established a benchmark to which those wealthy citizens who lack strong public philanthropic identities can, and have, been held to account.

Today, much like during the last Gilded Age, some worry that philanthro-shaming could do damage to the voluntarist roots of philanthropy — and might, for that reason, actually deter giving in the long run. Critics have also pointed out that these shaming campaigns ignore less publicity-oriented acts of giving that might not have caught the media’s attention. The authors of the Walton “Phony Philanthropy” report concede this point, acknowledging the “limitations” of their data, since they rely on the assumption that the Walmart heirs chose their family foundation as the primary vehicle through which to contribute to charity. If the Walton heirs made significant donations outside their family foundation, the report would have substantially underestimated their total giving — although the report’s authors claim that they have not uncovered any such gifts in any of their investigations that would force them to revise their calculations. The Walton Family Foundation had no comment on this question.

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This indeed represents a serious methodological shortcoming. But the real problem with philanthro-shaming is not that it demands too much of the nation’s wealthiest citizens, but that it threatens to demand too little. It frames the responsibilities of wealth as a matter of bookkeeping. But philanthropic accountability is more than balance sheets; its imperatives are not satisfied merely by knowing how much billionaires give but in scrutinizing the objects of that largesse.

Ironically enough, the Walton Family Foundation certainly appreciates this distinction. The foundation is one of the leading champions of education reform, spending hundreds of millions of dollars over the last decade to transform public education through the elixir of market-based mechanisms. This program has earned the ire of labor; one has to assume that the folks behind the Walmart 1 Percent campaign wouldn’t really be thrilled if Walton family members took their chastisement to heart and decided to channel much more of their personal wealth to their family foundation so it could increase its spending on charter schools and the promotion of merit-based teacher pay. Around the same time as the “Phony Philanthropy” report came out on June 3, more than half of the New York City Council signed a “cease-and-desist” letter addressed to Walmart and the Walton Family Foundation demanding that it stop sending its “dangerous dollars” to local nonprofits. The council members assumed that the donations represented a “cynical public-relations campaign” to buy support for the introduction of a Walmart mega-store in the city. After this week, you could forgive the Waltons for feeling that they were damned if they gave, and damned if they didn’t.

Which is not to suggest that the public should stop philanthro-shaming; it can be a useful tool for shining a light on the giving priorities of the nation’s wealthiest citizens. And though it might bruise some egos, it’s unlikely that such attention will discourage giving in the long run. If anything, appreciating that the public really does take their philanthropic commitments seriously should inspire more giving, and giving that is more closely attuned to the nation’s needs. But philanthro-shaming should be the beginning — and not the end — of a civil and engaged conversation about philanthropic means and ends. The flowering of that sort of “healthy public sentiment” from 1892 — that really would be a hopeful sign of the times.

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