In an environment of concern about growing inequality, plutocrats, the top 1 per cent or perhaps 0.1 per cent of the population, argue that philanthropy can address the issue of income and wealth distribution, financing initiatives in a variety of social and cultural areas.
In reality, it is an exercise in damage control against any backlash by the less well-off. Its perspectives are self-serving, promoting views beneficial to the business and financial interests of the wealthy.
The paradox of philanthropy is that enrichment by various means paves the way for conspicuous generosity.
A blogger put it more bluntly: “The uber-rich try to do good once they have done their damage… I admire [Bill] Gates and [Warren] Buffett for their generosity… but loathe the system that put them at the top of the food chain.”
It is trickle-down economics. As the humourist Will Rogers joked during the Great Depression: “Money was all appropriated for the top in hopes that it would trickle down to the needy.”
Few individuals or corporations “give away” their money. It is placed in tax-efficient trusts or foundations, with the donor retaining substantial control. Contributions are generally tax deductible or protect wealth from the ravages of death, inheritance or estate duties.
The trust or foundation also provides employment and status for the donor, his or her family and associates. Donations and good works ensure business advantages and a post-retirement role.
Many legally reduce their tax liabilities. Increasingly, sophisticated international tax planning allows profits to be shifted from high-tax to low-tax jurisdictions, using licensing of registered patents, copyrights or trademarks, or intra-group financing arrangements.
In pictures: The famous do the ice bucket challenge
In pictures: The famous do the ice bucket challenge
1/16 Lady Gaga
Lady Gaga managed to keep an admirably straight face as she poured what looked like a solid silver bowl of cold water over herself
2/16 Homer Simpson
Fans were overjoyed when their favourite yellow cartoon character got involved in the campaign to raise money to help those suffering from ALS. As per usual with Homer Simpson, things escalated quickly
3/16 Reece Witherspoon
One of those who have arrived slightly late on the scene, actress Reece Witherspoon looks nervous but resolute as she has a bucket of ice-cold water chucked over her head
4/16 Lily Allen
Lily wore a bikini as she self-administered her bucket of icy water. She thanked Jess Glynne for the nomination, and passed the challenge onto Mark Ronson, Millie Mackintosh and rapper Giggs
5/16 Daisy Lowe
Celebrity ALS Ice Bucket Challenge videos seem to be coming in faster than we can watch them - model Daisy Lowe is one of the most recent to get involved. She was nominated by Sun journalist Dan Wooton, and passed it on to radio presenter Nick Grimshaw and Abbey Clancy
6/16 Bill Gates
One of the first to go viral on YouTube, Bill Gates had freezing water tipped over him in a bid to raise millions of dollars to fight the illness ALS
7/16 George W. Bush
It felt like quite an important moment when the former President of the United States accepted nominations from his daughter Jenna Bush Hager, golfing champion Rory McIlroy, Woody Johnson, and Jim Harbaugh. He nominated 'my friend Bill Clinton'
8/16 Jimmy Fallon
In an official letter this week, the ALS Association said: 'Never before have been in a better position to fuel our fight against this disease.'
NBCU Photo Bank via Getty Images
9/16 Tom Hiddleston
Amyotrophic lateral sclerosis affects the brain and the spinal cord. Motor neurons degenerate and die which makes it increasingly difficult to move muscles
10/16 Rita Ora
There is no known cause of ALS, though there is a proven hereditary factor in some cases
11/16 Taylor Swift
There is also no known cure, though the millions being raised by the ALS association will go towards researching these great unknowns
12/16 Oprah Winfrey
The illness is also known as Lou Gehrig’s Disease, named after the all-time great baseball player from the early 20th Century whose time at the top ended when he was stricken with the illness in 1939
13/16 Mark Zuckerberg
The Facebook founder is unarguably the master of the challenge, who – following his drenching – saunters off
14/16 Justin Bieber
Bieber's first attempt was pretty naff: he didn’t quite get it and decided not to use ice or a bucket to complete the challenge. Obviously, the internet moaned at him and he was brilliantly peer pressured into having another go
15/16 Justin Timberlake
Celebrities have been nominating one another to do the challenge
16/16 Christiano Ronaldo and Marcelo
The challenge is now making its way over to this side of the Atlantic, former Manchester United players Paul Scholes and Gary Neville both doused themselves in cold water for a terminally ill fan
Stateless and virtual internet-based firms have become masters of tax as well as information technology.
They claim that they are not “doing evil”, rather engaging in “self-taxation”, substituting philanthropic contributions for taxes. This allows them to target areas of specific interest to their owners and managers. In effect, private interests, rather than elected governments, determine how our taxes should be spent.
Philanthropy points to weaknesses in the taxation system in redistributing wealth and financing social projects. It undermines government policy, allowing private interests to determine priorities.
Donors are free to channel funds to their chosen causes, some noble, some hubristic and some just plain odd. The investment banker Ace Greenberg donated $1m to a hospital so that homeless men could get free Viagra.
Philanthropy can undermine social policy, where it reflects the idiosyncratic views of the donor and supplicant rather that a rigorous analysis of the issues and the best course of action.
The contradictions of philanthropy are easily illustrated. Virgin founder Sir Richard Branson vaunts his social conscience, but lives as a tax exile on Necker, his own private island.
Although active as an investor since 1970, George Soros gained prominence when he “broke the Bank of England” and sterling on Black Wednesday, 16 September 1992. Soros earned an estimated $1.1bn, while Black Wednesday cost the Treasury and the taxpayer an estimated $5bn.
Soros, through his foundation, supports free markets and democratic initiatives in emerging nations, particularly Eastern Europe. Detractors point out that hedge funds are major beneficiaries of the opening up of these economies.
During the Asian financial crisis of 1997-98, Mahathir Mohamad, the then Prime Minister of Malaysia, took a less benign view: “All these countries [in East Asia] have spent 40 years trying to build up their economies and a moron like Soros comes along with a lot of money to speculate and ruin things.”
Mahathir forgot to mention that many of Malaysia’s problems related to his own pharaonic projects, funded by borrowings from foreigners.
The Slovenian philosopher and psychoanalyst Slavoj Zizek captured the essence of Soros in the film The Reality of the Virtual: “Half the day he engages in the most ruthless financial exploitations, ruining the lives of hundreds of thousands, even millions. The other half [of the day] he just gives part of it back.”
Philanthropy resembles contributions to the weekly church plate, to expiate the sins of commercial life. The wealthy gain twice: once in being praised for their entrepreneurship, and again in giving a fraction of it away.
True charity is not the tax-effective giving away of a small part of one’s wealth, but people with little sharing whatever they do have to help someone in need.Reuse content