The Bradley Center for Philanthropy and Civic Renewal and the Chronicle of Philanthropy hosted a discussion, “Is Philanthropy Going to the Dogs?,” to debate the issues of donor intent, social justices, and public interest within the context of Leona Helmsley’s $8 billion bequest made in August 2007. The session, moderated by The Chronicle’s Stacy Palmer, brought together Professor Ray Madoff, Professor Leslie Lenkowsky, Pablo Eisenberg, and Judge Robert Burk from the Hudson Institute.
Among the discussion’s highlights:
- Professor Ray Madoff from Boston College argued this bequest is actually subsidized by the taxpayers because it is stipulated to be held in perpetuity and thus avoids the payment of $3.6 billion in estate taxes to the government. So, essentially this averting of taxes is equal to the government making a matching charitable gift to causes supported by the Leona M. and Harry B. Helmsley Charitable Trust.
- Professor Leslie Lenkowsky from Indiana University countered that the philanthropists like Ms, Helmsley leverage their charitable gifts to express their values and their beliefs in what is important for the public good.
- Pablo Eisenberg from Georgetown University projected that with the mass transfer of wealth ($41 trillion dollars between 2002 and 2052) we will see the rise of mega-foundations with assets of $50-$60 billion that will operate under the direction of only a few family members. He argued that limited input into the guidance of vast volumes of resources is contrary to democracy and perhaps the installation of antitrust laws similar to those enacted in the early 1900’s to protect consumers from big business would help to protect our society from philanthropic monopolies. This concentration of resource oversight would most likely also create a funding stream for the organizations (specifically higher education, healthcare, and cultural) that are of interest to the leadership. Many of these recipient organizations are selected because they have large names and thus are presumed to be “accountable” whereas lesser-known start-up nonprofits are assumed to be less fiscally responsible. Therefore, the aggregation of philanthropic dollars under a few mega-foundations would allow the “rich to get richer and the poor to get poorer.”
Amidst all the talk, what struck me most is the apparent need for increased transparency in the philanthropy marketplace to better inform giving and more effectively channel funds to where they are most needed and can make most impact. The FasterCures Philanthropy Advisory Service intends to do this for biomedical research nonprofits such that large organizations like Alzheimer’s Association and smaller organizations like Cure Alzheimer’s Fund are evaluated equally on their approach and execution in accelerating research in the Alzheimer’s disease area.
Eisenberg closed the session noting that despite the potential threats to philanthropy, we should remember that foundations should remain in a “special place” in our economy because they fund innovation, new ideas, and high-risk opportunities that others are unwilling to do. FasterCures has echoed this unique ability and responsibility of nonprofit disease research to tackle the high-risk yet high-reward translational research that the government and industry are not inclined to fund. Although philanthropic dollars only account for about 2% of the R&D investment in the life sciences, it is an invaluable piece of the funding pie. We hope our efforts to inform charitable investment, build collaborations, and promote knowledge-sharing across sectors keep philanthropy from going to the dogs for its true value is the cat’s meow.