It is amazing that the stage for the inauguration didn’t collapse under the weight of the money hoarded by those on that stage. Trump hopes to appoint 13 billionaires to various positions in his cabinet and government, whose total net assets are approximately $420 billion (depending on which day and hour one uses to calculate)! Bernard Arnault, founder and CEO of LVMH, was also onstage, as were Mark Zuckerberg and Jeff Bezos, adding another $700 billion on view, for a grand total of $1.1 trillion! Yep, $1,100,000,000,000.
Impressive? Apparently not. An AP-NORC poll asked whether the President relying on billionaires or family members for policy advice was a good or bad thing, only 12% thought it was very or somewhat good. But this is what plutocracy looks like, when billionaires take the position next to the President formerly reserved for elected officials. These are the folks who say they will be looking out for the best interests of the working class? Not. And it likely will be scarier than we imagined.
Two months ago in my letter I mentioned the V-Dem Institute (University of Gothenburg) report that, using very complex metrics, breaks down its assessment of the state of democracy in countries around the world, into four categories from most autocratic to most democratic: closed autocracy (no elections), electoral autocracy (the appearance of free and fair elections), electoral democracy, and liberal democracy (elections, constraints on executive, protection of civil liberties and equality before the law).
Prior to the U.S. election, V-Dem classified 5.6 billion people in the world as living in autocracies, in which there are few constraints on the executive by the legislature and the judiciary, and where the rule of law fails to ensure respect for civil liberties. Although the verdict may not be in yet, I think with our election we’ve crossed the 6-billion-people mark.
Trump, as a candidate, was clear about his intentions, so how did democracy lose out? There are plenty of explanations, each of which may well be a contributing factor. I find Herbert Kitschelt’s analysis in Thomas Edsall’s opinion piece most compelling: less educated men, especially young men, have experienced decreased earnings potential and self-confidence because they have reduced bargaining power at work and home relative to both women and college-educated people. These voters were a deciding factor in the election and either stayed home or voted Republican. I would add that wealth inequality has exacerbated this problem, particularly as an amplifier of status anxiety.
Could progressive philanthropy have done more to change the outcome? Not likely. Earlier– like ten years ago–support for community organizing might have helped, but essentially, we got what we didn’t pay for. With a few notable exceptions, we philanthropists didn’t invest in promoting democratic institutions, like universal voter registration, vote-by-mail, publicly funded elections. We didn’t invest in reducing income and wealth inequality. Our support for racial equity turned out to be a blip. We didn’t recognize and address the elitism problem that divided college-educated from non. We didn’t shore up independent news outlets. We didn’t even have think tanks that could produce anything like the MAGA Project 2025. Instead, we hoarded our wealth so that we’d have it ready to spend for some future rainy day. How’d that work out for us?
Nonprofits across the spectrum, whether working on advocacy, arts, or direct services, will be suffering from cuts in government spending and from changes in government regulations that will hamper their capacity. Joe Goldman, president of Democracy Fund, Laleh Ispahani, managing director of Open Society Foundations and Deepak Bhargava, president of Freedom Together Fund are featured in an Inside Philanthropy article titled: “A Call to Action: Fighting Words from Three Democracy Funding Leaders.” “No matter what issue you care about, a vibrant democracy and an open society are critical to ensuring that you are heard,” said Ispahani. “At a core level, democracy matters to us all — and we all need to do our part to preserve it.”
In the last two years the S&P 500 has gained more than 50%! The numbers aren’t in yet, but private foundation assets could reach $1.8 trillion. A payout rate of 10%, yielding $180 billion of support for nonprofits, would nearly double the current level ($100 billion) of distributions. Even if the 10% rate applied to only the 3000 foundations with more than $50 million in assets, it would increase investments in nonprofits by $50 billion. And this is “free” money, where payouts are considerably less than the investment returns.
We got what we didn’t pay for. Let’s try to both repair the damage and not make the same mistakes again.