Party Like it's 1901

In the New York Times today, there’s an interesting article on “Big Gifts, Tax Breaks and a Debate on Charity ” that cites Andrew Carnegie for the some of the precedents he set for how, what and why the stupendously wealthy give, hence the title.

A few quotes stand out in the article.

“I believe the public benefit is significantly greater than the tax benefit an individual receives,” Mr. Broad said. “I think there’s a multiplier effect. What smart, entrepreneurial philanthropists and their foundations do is get greater value for how they invest their money than if the government were doing it.”

There’s a certain market developing about the many wealthy and willing donors out there (be it a billion, a million, or just hundreds) wanting to find ’causes’ and groups to receive their funding.  This could be both effective in rapidly disseminating funding to a diverse variety of needs in ways never before seen, as well as iron out inefficiencies in both government and nonprofit organizations as they compete for funds.

However there’s another face to this funding issue the article brings up, and that is the consequence of private parties making decisions with their donations.

“When millions of people are dying of AIDS and malaria in Africa, it is hard to justify the umpteenth society gala held for the benefit of a performing arts center or an art museum,” [Billionaire William H. Gross] wrote in his investment commentary this month. “A $30 million gift to a concert hall is not philanthropy, it is a Napoleonic coronation.”

The morality at play here wonders whether some well intentioned donations in fact promote inequaity.  I suppose time will tell, motivations might all be different, whether  they are Napoleonic and self righteous, or truly altruistic.  I suppose this armchair charitable donor critic needs to step back and see some common ground:  maybe a gift is precisely that, a gift.