This is Why Billionaires Can’t Save Us

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Hundreds of the world’s elite are taking advantage of philanthropy on a daily basis through businesses such as Amazon and Microsoft.

In a capitalistic economy as complicated as the United States, achieving millionaire and even billionaire status has become quite a milestone. Everyone in the top 1% has made a big impact on the current culture. Jeff Bezos, George Lucas, Steven Spielberg, Zhong Huijan, and 2,091 other people across the world all hold these coveted titles for making an impact. Now, you probably are wondering: now that they have all of this money, what on Earth could they be doing with it? Well, I’m not entirely sure either, but I can give a good guess that some of it could be put towards philanthropy or investments. Now philanthropy is an incredibly common term used by the rich and powerful that is essentially just a fancy word for charity work and donations. 

In order to give some historical context, back to the Gilded Age, the rise of modern philanthropy began with a man named Andrew Carnegie. He was originally America’s richest man and was the founder of Carnegie Steel Company. What made him so well known was his Gospel of Wealth. To use short terms, Carnegie insisted that the rich were obligated to help the poor and that they should use their superior wisdom to help the poor better than they would or could themselves. Hence through this, philanthropy was born. 

In 2019, the United States reached a new high in charity donations, capping off at nearly $450 million. This number was reached through both American citizens and larger charity organizations such as the American Red Cross. However, the percentage of Americans giving to charity has decreased and has been falling for 15 years based on a study done by the University Lilly Family School of Philanthropy. Instead, the total charity donation share from ultra-rich has skyrocketed so much that the Paul Schervish Center on Wealth and Philanthropy predicted that 30% of all charitable donations in 2019 were expected to come from the top half of the 1%. That was essentially the top 0.5% of all Americans. To really understand how wealthy the top 1% are, in relation to the entire country, the four hundred richest Americans accumulate more wealth than the bottom 150 million adults. To clarify, they make a ton of money yearly. You might also be wondering what they do with all of that money. Many of them donate to different charities, but they aren’t always for the right reasons. 

With these people having all of the money in the world at their fingertips, it would make plenty of sense to donate to charity organizations to help out in the world. However, some are just in it for the profit that can be made off philanthropy. Yes, you heard me; some of the wealthiest make a profit off of giving back. Some of them also tend to have questionable business ethics and public policies. 

 

Reputation Cleansing

John Schnatter, the founder of Papa Johns, resigned after saying the N-word at a conference call. Then, in 2019, he donated over $1 million to an HBCU in Kentucky and said that in a report from WDRB that his “life’s work is to help make other people’s lives better.” 

On May 19, 2019, Robert Smith paid off Morehouse University’s class of 2019 debt through a grant. Prior to that, in April 2014, he was exposed by the New York Times for defending an indefensible carried-interest tax loophole that benefited private equity along with people in his industry. To break the process down, Robert had a $50 billion charity fund. Through this fund, when his investors made a profit, he also got to keep a cut which gave him potentially hundreds of millions of dollars. Through the Tax Policy Center, the average tax rate was 40.8%. However, Smith did not have to pay income tax thanks to the loophole and instead only had to pay capital gains tax which is 23.8%. 

The Sacklers, who are behind Purdue Pharma, were also the ones that fueled the opioid crisis. They made billions off the opioid epidemic, but then slapped their name on many museums such as the Sackler Institute, and the Sackler Educational Laboratory. They used their large donations to launder their reputation of pumping opioids into people along with manipulation. 

 

Making Profit 

Now when it comes to making a profit and paying less in taxes, the ultra-rich pay close attention to different philanthropic structures and use what they know to put money towards untaxed organizations instead of taxed ones. For example, structures such as 501(c)(3)s, 501(c)(4)s,  civic organizations, public charities, private foundations, and donor-advised funds are what tend to be donated to more often. The most common of these include civic organizations, 501(c)(4)s, and donor-advised funds. Civic organizations help rich donors pay less income, estate, and capital gains tax. 501(c)(4)s promote social and political causes while keeping donations anonymous and donors get to pay fewer taxes since they are untaxed. Then there are donor-advised funds which are basically checking accounts for charity and have become one of the fastest-growing charities in the US. 

 

Public Policy 

Of all of the billionaires I have stated, I still have not mentioned Bill Gates. I know the world seems to respect him for helping with fighting malaria and reducing child mortality, which is great. He genuinely does good deeds with his money and does not profit off charities, but he does manipulate others with his money through public policy. 

In Bill Gates’s home state of Washington, initiative 1240, which would allow new charter schools to be public schools that would be funded with tax dollars, but run by private, nonprofit organizations were debated upon. This would make it so that they would not be bound by most of the rules that govern traditional public schools and because of that, was rejected three times. In 2010, Gates along with other wealthy backers got their issue back on the ballot again and won with 50.69% of the vote. He also spent millions of dollars more to subsidize the charter schools until the Supreme Court declared it unconstitutional. In lieu of that, Gates funded a group of lawmakers to pass a new bill to get around the Supreme Court decision allowing charter schools to stay open. 

 

Going Against the Billionaires 

In an interview excerpt with Hasan Minhaj on his former Netflix hit Patriot Act, Anand Giridharadas, author of Winners Take All, Anand statedWe live in this time in which rich people are everywhere. Giving back, trying to change the world, make a difference, etc…. The same group of people who have lobbied for fought for, clung to an economy of injustice, have marketed themselves to us as saviors, as in fact the solutions to the very problems they are still busily causing. They are getting public credit for solving and the causing never gets the same notoriety.”  He uses this, to sum up how the elite uses their money to hide their true intentions. When asked about how to stop the wrath of billionaires, he brought up the idea of introducing a wealth tax that would be 8-10% so then the incomes and value of billionaires would shrink over time. He then also brought the idea of increasing the capital gains tax on the wealthy to shrink their wealth even more. 

 

What Can We Do to Stop This?

Now that you finally understand what billionaires tend to do with all of their sheer wealth and luxurious lives, you may be thinking about holding them accountable; I’d do that too. Holding people accountable for their actions can help influence how they run their lives and becoming more sensitive to current culture so no one is offended. Our society has become more prone to “canceling” people than holding them accountable for actions and letting them speak on the situation. In correlation to what is strolling around the news, let’s talk about Andrew Cuomo, New York’s governor who has been accused of sexually harassing ten different women, including former Capitol press corp member Jessica Bakeman and former press aide Karen Hinton. These recent allegations have caused an uproar across the country with protesters rallying outside his office to demand impeachment. The public is now holding him accountable for his concerning actions just like the public should be holding billionaires accountable. Holding people accountable allows those in power to think about their actions and stay aware of a growing generation that reacts deeply to sensitive topics. All in all, billionaires and 1 percenters alike should watch what they do and do what they do ethically if they want to keep their money.