A*Musings (Alan's Blog)

Guest blog: Larry Ottinger

This month we are tilting at the windmill that is the broken and extreme MAGA Supreme Court, created over decades through an unholy alliance of the religious right (which is neither) and their billionaire partisans.

Guest blog: Gabriela Sandoval

We are coming up on the fourth anniversary of the beginning of the COVID-19 global pandemic and while I’d like to say we’ve come out the other side of it, the treads of the pandemic’s impact remain. They remain vividly on our communal health–physical, mental and emotional, and they remain on our economic, democracy, racial justice, and other societal structures.

The difference between the haves and have-nots in 2023 would be enough to make Charles Dickens’ head spin.

As is frequently reported, charitable giving by the ultra-rich has remained at a constant 1% of wealth, which as I’ll point out, that fails the generosity test.

When the law regulating private foundations was enacted, Congress established a 5% minimum payout … As has been reported over and over again, that minimum has been translated by the vast majority of the foundation community doling out just at or slightly above 5 percent.

The sad truth is that we’re not going to get money out of politics until we philanthropists put more money into politics (aka voter engagement for private foundation funders).

The United States still has close to thirty million people without health insurance. Disasters have become commonplace, but there is insufficient funding to either ameliorate the tragedies or, better yet, prevent them.

Ultra-rich foundations announce commitments to fight climate change while arguing for building their endowments to save for the future. I’m confused. What future?

Okay folks, it’s time we get real…this class of charitable donors has been making money hand over fist for decades and yet can only remember last year’s returns in justifying a reduction in charitable giving.

If we are to save democracy we must not only win the political trifecta, but do so with a majority of electeds who are committed to ending the filibuster in some form on Day 1, fix the Supreme Court on Day 2, and pass H.R. 1 (the democracy act) on Day 3.

For those of us advocating for charitable reforms… we too easily lose sight of the fact that the ultra-rich got that way thanks to 9,999 other people, uncontrollable events, luck in timing, and many other factors.

These are troubling times, which call for a “raise the bar” movement where we aim higher and demand better from those in power, whether they be elected or not…the establishment philanthropy lobby prevented meaningful change in our charitable tax laws.

Apparently, when the ultra-rich are younger, scrappier, willing to take risks in their businesses, they don’t give money away. Instead, they use those talents to make more money. Then they get older and do give money away–to universities and hospitals.

I learned that Inside Philanthropy, one of the major publications covering charitable giving, awarded me its “Philanthropy Critic of the Year” Award saying, “The Leonard and Sophie Davis Fund president is also chair of the Crisis Charitable Commitment, an effort to get the super-rich to give more money away.

It’s Resolutions time of year, or perhaps Goals time of year, both of which are aspirational. For the most part, the resolutionary is responsible for making it happen, and when it doesn’t happen, they feel a little guilty. Herewith are my eleven Crisis Charitable Commitment 2023 Predictions

The American people are a generous lot. The somewhat well-off, middle class, working class, and even the poor, will be contributing to what should be a record Giving Tuesday. The $3 billion or so raised for a variety of noble causes this week masks how stingy the ultra-rich donor class–the 0.1% of taxpayers–really is.

If there were ever a question whether we live in a plutocracy, think about this: Many of the nonprofit organizations that work to protect the vote are operating at under 75% capacity for lack of funds, a gap that had it been filled could change outcomes in close elections.

The tremendous power that comes with excessive wealth…donors forego charitable deductions by giving to 501c4s, in exchange for which they have the freedom to influence elections; and rig the nature of our tax system

We have been en vacance in France and recently visited Omaha Beach and the American Cemetery in Normandy. The D-Day landing was an incredible feat accompanied by tremendous sacrifice. Among the many emotions and thoughts this visit generated, one was how in times of crisis Americans pulled...

An extremely significant philanthropic event took place two weeks ago. Wouldn’t you love to go back to school just to take one course: Philanthropy 401, a one-semester multidisciplinary course that does nothing other than study the recently announced $20 billion gift by Bill Gates to his Bill and...

Despite the rhetoric and high-profile commitments of 2020 and 2021 to the various crises surfaced by the pandemic, a burst of philanthropic dollars has failed to materialize.

The addictive drive to accumulate wealth is very powerful and might be one explanation for our limited success. But of late we’re hearing another explanation (or is it a rationale): “It’s very hard to give away money effectively.”

It just may be that the most important reason to get rich foundations to give away more is to make them less rich.

Headlines about billionaire philanthropy only show how the media and our tax laws serve the interests of the plutocrats, while scant attention is paid to true philanthropic role models.

Billionaire philanthropy has three benefits not available to the average citizen: it is a highly leveraged extension of power; it serves to whitewash reputations; and it provides an alternative to giving (too much) money to relatives or friends.

Our tax laws–by taxing capital gains at preferred rates and only when realized–subsidize the hoarding of wealth by people like Musk and his ilk. Did Congress really intend–through generous charitable tax deductions and virtually tax-free investment income for foundations –to support private foundation hoarding as well?

The CCC has played an important role in ramping up discussion of “how much” wealthy donors should be expected to give…and we have directly raised the “how much” question with hundreds of philanthropists. – If it’s true that those in the 0.1% have “enough,” then it’s debatable why they should even get a tax deduction for being charitable.

To shed some light on why charitable tax reform has gotten so little support from the nonprofit community, I’m publishing a purloined copy of a letter written by Ms. Gimme Sommore, Director of the Shortsighted Nonprofits Association, to one of the country’s six-hundred-plus billionaires, Richard N. Wight.

It’s not just a billionaire problem. Ultra-high net worth individuals, with assets above $30 million each, represent 0.1% of all U.S. households and have a combined net worth in excess of $12 trillion. When I think about what could make America great again, I imagine a 25% tax on just the wealth above that $30 million per household.

Almost exactly one year ago, I wrote about the hoarding and transparency problem with Donor Advised Funds (DAFs). Today, I’m writing to announce the Crisis Charitable Commitment’s new initiative–which will be launched tomorrow, July 28– to address the most significant aspect of the DAF problem, a...

Tomorrow, July 14, Bastille Day, we mark the one-year anniversary of the Crisis Charitable Commitment (CCC). Almost 100 CCC signers stepped up to the plate in 2020 and gave at a higher Charitable Standard to address the multiple social and economic crises highlighted by the COVID pandemic. Through...

The fantasy of “Good Billionaire”… Warren Buffett the champion of the billionaire pack in avoiding paying taxes,… confirmed two things: First, the rigged tax code that creates billionaires and excessive wealth, and Second, it confirmed the rarified thinking of the rich: we can do a better job at deciding where the money should go…

Ultra Rich Taxes, or URTs, are laser-focused tax policies that only apply to the 0.1% (possibly 0.2%) of America’s richest households. This tiny group of people have a combined total reported income of over $1 trillion per year and sit on bank accounts and other assets worth more than $12 trillion (as a reminder, that’s a “12” followed by an unbelievable twelve zeroes)!

Have the richest among us responded to the crisis? If you were to read the headlines you’d certainly think so: $100 million for racial justice here, $10 billion for climate protection there. But the truth of the matter is that, with the exception of MacKenzie Scott and perhaps two or three others, it’s been business as usual (aka hoarding).

If the average charitable deduction tax saving is, say 50% (could be as high as 74%), it means that we the public are taking $60 billion out of the Treasury and letting the wealthy decide what kind of public investments should be made.

So along comes Jeff Bezos with a $10 billion commitment to address climate change. Wow…sort of. It’s kind of a macho thing: Gates saves us from Covid, Zuckerberg saves democracy, and Bezos saves the planet. Bezos is named philanthropist of the year by the Chronicle of Philanthropy, and I don’t know whether to laugh or cry. First, he didn’t give away $10 billion, he pledged to give it away over TEN years….The climate crisis can’t wait ten years.

Senators Klobuchar and Warren have introduced two seemingly unrelated bills, but they could be, in part, two sides of the same coin (an appropriate cliché here because we’re talking about money).

The COVID-19 crises have prompted me to think about what four questions I might ask at a Seder: First, as the light at the end of the tunnel seems to be getting brighter, what will you miss as we return to the new normal?

What’s the idea behind the Crisis Charitable Commitment? It’s simple. Wealthy individuals and foundations and donor advised funds are sitting on a lot of money. We have a major crisis. We have to get that money out the door to help ameliorate the crisis. That was and is goal number one.

Am I crazy to wonder what kind of world we live in when you get congratulated for getting a COVID vaccine shot? Congratulations are deserved by those among the donor class who are not just spending their money on art or private space ships but instead digging deep to address the multiple crises created and/or highlighted by the pandemic.

In a word…Bezos. He and his ex-wife have $250 billion. If you earned $1 per second, $60 per minute, $3600 per hour every hour of the day, every day of the year, and assuming you didn’t have to pay any taxes, you, too, could have $250 billion…in just 8000 years! If we can put a person on the moon, we can change laws now to solve the problems of both wealth inequality and rich man’s philanthropy–before the rich own the moon, too.

Especially in this time of crisis, far too many foundation trustees and 0.1%ers are echoing the sentiments ascribed to Marie Antoinette. “Let them eat cake” is “a saying that shows insensitivity to the realities of life for the unfortunate.” The antithesis is “stepping up to the plate.” As President Biden said in his Inaugural Address, “Our ‘better angels’ have always prevailed…enough of us came together to carry all of us forward.”

A Dickensian theme runs through my writings. Oliver Twist (nonprofits) begging his master (the donor class) for more. During the Christmas holiday we had the wealthiest Americans putting Scrooge (from A Christmas Carol) to shame. And now Dickens’ Tale of Two Cities: “It was the best of times [for 650 billionaires in the U.S. who made $1 trillion since the pandemic began}, it was the worst of times {25 million Americans are unemployed….)

For CCC’s Philanthropist of the Year award it would be appropriate to give it to the 57 signers of the Crisis Charitable Commitment, individuals and foundations who have shown leadership in digging deep in this time of crisis. But we’re compelled to name MacKenzie Scott, the game changing Philanthropist of the Year. While “how” and “where” she gave is noteworthy, it is “how much” as a percent of her wealth (10%) that really sets her apart.

The math is fairly simple: 0.1% (one in a thousand) of taxpayers are sitting on approximately $12 trillion ($12,000,000,000,000)! Add another $1 trillion in private foundations. If this wealthy donor class gave just an additional 1% to nonprofits (which have already laid off one million workers and face the prospect that 40% may have to close their doors next year), it would help nonprofits address the crisis with $130 billion.

While many Americans will be contributing to what should be a record Giving Tuesday, projected total giving will amount to only the monthly income of each of the country’s five centibillionaires! On Giving Tuesday 2015, Mark Zuckerberg and his wife Priscilla Chan announced that they would give away 99% of their wealth. They are off to a very slow start. If they were to give $250 million every Tuesday it is unlikely that they would achieve their goal.

Thirty million people worldwide are at risk of dying from hunger. Give people democracy and reduce excessive wealth inequality and people will have fishing poles and fish. The challenges posed and surfaced by the COVID-19 crisis require a lot more money than has been forthcoming. President-elect Biden has said: “If Americans come together, there is nothing we cannot do.” The same could be said for philanthropists.

Election Day marks the end of the first phase of the CCC effort, launched on Bastille Day, July 14. The pandemic highlighted or fueled racial injustice, economic hardship, climate disruption, loss of trust among our international allies, and importantly, threats to our democracy. The whole nonprofit sector is in distress, having already cut 10% of its jobs. The donor class–foundations and ultra high net worth individuals–has its work cut out for it.