This is my 73rd and final letter under the CCC banner. I will continue writing a letter (and I hope you will continue reading it), but it will be part of a new effort that we’ll be launching next month: the Extreme Wealth Center (EWC). The Center will research and amplify the harms that emanate from the concentration of extreme wealth and how best to address the root problem. I’ll be sending you more information about this in advance of the EWC launch next month.
For five years, the CCC has worked to persuade private foundations, donor-advised funds, and wealthy donors to share more of their wealth with the nonprofits addressing what seems like a never-ending series of crises. We’ve done this by setting new, voluntary charitable giving standards and recognizing donors stepping up to meet these standards. Our continuing hope is that these standards will serve as new norms and a new normal for philanthropy. We are proud of what CCC and its donors making the commitment have accomplished, and we are heartened to see increasing interest in not only donating more but rejecting the notion of perpetuity as the standard for foundations.
There are quite a number of excellent critics of philanthropy who are helping transform philanthropy. These include (but definitely are not limited to) Vu Le, Chuck Collins and his team at Inequality.org, David Callahan’s Toplines at Inside Philanthropy, and Glen Galaich’s Break Fake Rules. CCC distinguishes itself by its laser focus on the issue of “how much” donors give and examining giving not in nominal dollars but as a percentage of overall assets. Generosity is the act of giving more than is usual or expected, and like taxes, “more” is a function of one’s ability to contribute. A billionaire’s $10 million gift is no more generous than a millionaire’s $10,000 gift.
Extreme wealth (which I’ll define as anything more than $50 million in assets), and the contributions that flow from it, are a source of power. It doesn’t really matter whether you are a so-called good billionaire, trying to save democracy or funding food banks, or one that supports organizations that amplify greed and self-interest, the power to decide and influence is plutocratic. Curbing extreme wealth would help minimize the power of money to influence other people’s lives.
Our current, terribly misguided tax policies exacerbate the (charitable) plutocracy problem in two significant ways. First, the ultra-rich are simply under-taxed, allowing them to accumulate even more wealth. Second, the charitable income tax deduction, which is nothing more than a plutocracy-enabler, gives the ultra-rich huge tax breaks while everyone else gets as little as no tax benefit. Depending on which state the wealthy donor lives in, he or she can receive up to a 90% charitable deduction tax break–meaning the government gives 90 cents back for every dollar donated. And to make matters worse, the donor can give to their private foundation where the money can continue to grow (above the 5% mandatory payout requirement) virtually tax free.
For these reasons, CCC will be moving to the Extreme Wealth Center where it will situate philanthropy within the context of the larger problem of extreme wealth. CCC will continue, under EWC, to seek to establish higher charitable giving standards as voluntary norms for philanthropy. And we will continue to recognize the “good” donors, who demonstrate by their giving that the new standards are both reasonable and responsible. But CCC signers are a tiny percent of wealthy donors and volunteerism will not be sufficient to change entrenched behaviors; legislative solutions are needed to democratize philanthropy by both reducing extreme wealth and moving the benefits of the charitable income tax deduction from the ultra-rich to the other 99.9% of taxpayers.
You will automatically receive the first of my EWC letters. I sincerely hope you will join us in our efforts to pursue a fair and functioning shared-prosperity-economy.