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The rich threaten democracy

| Sunday, Oct. 14, 2007

"Giving," Bill Clinton's folksy first-person tour of worthy causes and the good people who support them, is so relentlessly upbeat that only the most churlish professor would say a discouraging word about the book.

But the former president is so intent on celebrating 21st-century philanthropy -- and highlighting his and Hillary's role in promoting "the explosion of private citizens doing public good" -- that he blithely ignores a hard reality:

Philanthropy and democracy don't get along nearly as seamlessly as "Giving" would have us believe.

Private giving is not the panacea for all that ails us. Clinton concedes early on that many problems "cannot be adequately addressed without more enlightened government policies." But he then devotes only 19 of his 211 pages to government's role in advancing the common welfare.

In urging us to do good privately, he tacitly reinforces a lack of faith in the capacity of democratic governance to cure our social ills.

As Clinton remarks, without comment or regret, today's startling expansion of the philanthropic sector is being fueled by a "vast pool of new wealth." The recent philanthropic surge has been fueled by a few highly publicized mega-gifts. Among them, Cordelia Scaife May's 2005 gift of most of her $404 million estate to the Colcom Foundation of Pittsburgh.

Such foundations can pretty much do as they please with their grants, as long as they spend at least 5 percent of their assets every year and don't blatantly enrich their directors or donors.

In 1915, during the first great wave of giving, the Commission on Industrial Relations undertook what its chairman called "a sweeping investigation of the country's greatest benevolent organizations ... to ascertain if they were a menace to the Republic's future."

Chairman Frank P. Walsh feared that self-perpetuating, tax-exempt foundations would expand the power of the rich so far that democratic decision-making would be threatened. He suggested the federal government "take over such accumulations of wealth" as held by the Rockefeller, Carnegie and Russell Sage foundations "by taxation similar to the income tax" and use the money for widely agreed-upon public projects.

Is society well-served by letting so few accumulate so much• What becomes of a society that relies on "gifts" from a handful of socially conscious billionaires to save schools, cure disease and alleviate poverty?

This questions powerful assumptions about the relationship among capitalism, philanthropy and democracy so famously articulated by Andrew Carnegie, the founder of modern American philanthropy. Autocratically, he urged fellow millionaires to donate to causes that appealed to them, so long as they did not encourage dependence.

In 1895, at the dedication of his new library in Pittsburgh, Carnegie acknowledged that the thousands of men working in his steel mills would have preferred that he give his money to them to spend as they saw fit. He refused. Had his money gone directly to the people in the form of bigger paychecks, it would have been "frittered away." Many of today's millionaires are following Carnegie's lead.

Our greatest fear should be that the growth of private philanthropy may be both symptom and cause of our weakening faith in democratic government.

There is nothing intrinsically wrong with trying to raise private money for public purposes. But we cannot let such efforts distract us from pressuring government to do its best to save the environment, adequately fund our public parks, schools and universities and provide medical care and support for the weakest among us.

David Nasaw is a history professor at the City University of New York's Graduate Center. His most recent book is "Andrew Carnegie."

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