POLITICS, PHILANTHROPY, AND INEQUALITY
Sarah Reckhow
IN MAY 2017, A 3.3-MILE streetcar line opened in downtown Detroit—a city well known for its lack of public transportation. This project emerged from an unusual financing and management model. The largest single funder was not the U.S. Department of Transportation, the State of Michigan, or the City of Detroit—it was the Kresge Foundation, a private philanthropic organization. A nonprofit, M-1 Rail, operates the streetcar system, known as the QLine (a corporate sponsor, Quicken Loans, purchased the naming rights; other corporations and nonprofit institutions have sponsored stops along the route). No elected public officials sit on the M-1 Rail board of directors, but the group does include Quicken founder and billionaire philanthropist Dan Gilbert, as well as Kresge’s CEO and president, Rip Rapson. As a Next City article on the project observes: “The city’s political class . . . has largely been shut out of the streetcar development project” (Smith 2014). Critics argue that the downtown streetcars were designed for the use of wealthier residents and to attract economic development in the city’s core—at the expense of Detroiters from high-poverty neighborhoods who rely on buses.
The debate about the influence of donors on seemingly public-sector projects is much bigger than streetcars in Detroit. The QLine is symptomatic of broader shifts in the role of philanthropy in the provision of public services and public policy. The number of billionaires in the United States has more than doubled since the mid-1990s, and many of these individuals are deeply engaged in philanthropy during their lifetimes. For example, the Giving Pledge, started by Microsoft founder Bill Gates, his wife Melinda, and Berkshire Hathaway CEO Warren Buffett, has inspired 204 high-net-worth individuals or couples to commit to donating the majority of their wealth to philanthropic causes. Meanwhile, as public-sector budgets grow more constrained by legacy costs and concerns about deficits, funders come to the table in ever larger numbers and with substantial resources to engage with the policy process. Sometimes private funders are invited to get involved in supporting public-sector services by public officials seeking aid and support; in other cases, private funders create their own agenda priorities, which may or may not be aligned with the priorities of elected leaders (Lemos and Charles 2018).
I argue that philanthropic efforts in the twenty-first century—particularly those led by the wealthiest individuals and foundations—should be examined not only within their political context but also as an aspect of the political climate. In this regard, my perspective is closely aligned with Aaron Horvath and Walter Powell, who also examine changes in “the institutional environment surround[ing] philanthropy” (2016:89). Only with recognition of this broader context is it possible to fully appreciate the ways that philanthropic power intersects with the political system. As David Callahan explains in his book The Givers, “Big philanthropy is arising in an era when the wealthy already seem to control so much territory in America” (2017:8).
The New Gilded Age
The bold steps taken by philanthropists in recent years—such as the QLine project in Detroit, or the 2016 announcement by the Walton Family Foundation to spend $1 billion on charter schools over five years—are somewhat reminiscent of the Gilded Age philanthropists of the early twentieth century. Among the most visible philanthropic gifts of that earlier era was Andrew Carnegie’s $60 million to support the construction of 1,689 public libraries across the United States. These libraries have persisted for decades, in many cases still treasured by local communities as public goods. Now, one century later, we are entering an era that many scholars view as a New Gilded Age, with enormous fortunes amassed by the wealthiest members of society and stagnant incomes for most of the workforce (Piketty 2013; Krugman 2014). Just as the first Gilded Age was characterized by the development of major legacy foundations, such as the Carnegie Corporation and the Rockefeller Foundation, a new wave of institution building and philanthropic giving is under way among the corporate titans of the New Gilded Age.
New Gilded Age income distributions show a growing share of income accruing among the top 10 percent of earners since the 1980s, sometimes exceeding the levels of inequality seen in the original Gilded Age. Underlying this pattern, however, is further disparity within the top 10 percent. According to Anthony Atkinson, Thomas Piketty, and Emmanuel Saez, “Most of the changes in the top decile are due to dramatic changes in the top percentile, which rose from 8.9 percent [of total income] in 1976 to 23.5 percent in 2007” (2011:6). Moreover, the share of income amassed by the top 0.1 percent was 12.3 percent by 2007, surpassing the highest level reached during the original Gilded Age (Atkinson et al. 2011). Although the highest earners lost income during the Great Recession, wealth concentration increased and the top 1 percent and top 0.1 percent have retained income shares comparable to Gilded Age levels (Saez and Zucman 2014; Zucman 2019). These economic trends have created massive new fortunes and an extraordinarily wealthy class of plutocrats in the United States.
In addition to economic trends, shifts in the political system have created new and different political opportunities for New Gilded Age philanthropists. First, contemporary philanthropists have considerable flexibility and face relatively little public scrutiny when creating an organization to distribute their wealth. In contrast, the early-twentieth-century philanthropists confronted serious public pushback that framed philanthropy as a threat to democracy, even when simply creating their foundations (Reich 2018; McGooey 2016). When Rockefeller took steps in 1909 to create his foundation and seek a federal charter, the concept of the general-purpose charitable foundation was a novelty, and Rockefeller encountered intense scrutiny and skepticism in Congress (Reich 2018). As Rob Reich explains, reaction against Rockefeller’s foundation was so intense, a bill was drafted that would have “limited the size and life span of the foundation and imposed a form of public governance on its operation” (Reich 2018:6). Yet this bill failed, and Rockefeller ultimately turned to the State of New York for a charter, which offered the foundation extensive latitude compared to the oversight and limitations proposed at the federal level. Thus, the general purpose and perpetual private foundation developed in the United States with relatively few restrictions.
According to Reich, the debate over the Rockefeller Foundation “reveals attitudes and reservations about philanthropy virtually never heard in our contemporary era” (2018:136). The private foundation has offered a flexible and advantageous approach for distributing wealth to priorities chosen by the donor—establishing a foundation requires no prior approval from elected officials and comes with favorable tax incentives. Nonetheless, private foundations are increasingly viewed as lacking the flexibility and secrecy that many contemporary donors desire. Many elite donors today route their philanthropic activities through multiple channels; donors are increasingly seeking even more flexible alternatives to the traditional private foundation (such as limited liability corporations and donor-advised funds) and coordinating their philanthropic action with their political giving strategies (Saunders-Hastings 2018).
Second, the rise of think tanks and the interest group explosion of the 1970s has influenced politics, cementing an expansive role for external advocacy groups in the federal policy-making process (Walker 1991; Rich 2004; Grossmann 2012). The growing number of think tanks and interest groups focused on public policy influence has created a target-rich environment for donors seeking grantees with access to policy makers—donors can support organizations that specialize in advocacy, research, and/or specific ideological or issue-oriented perspectives, and even work to coordinate activities across organizations to promote coalitions around specific agenda items (Teles 2008; Medvetz 2012; McDonnell and Weatherford 2013; McDonald 2014).
The most common type of tax status designation among nonprofit organizations is the 501(c)(3) nonprofit, which offers a substantial advantage for fund-raising purposes—tax deductibility for donors (including both individual donors and private foundations). Although 501(c)(3) organizations have some limits on their ability to lobby and are prohibited from electoral campaigning, the (c)(3) status is quite common, particularly among think tanks in the United States. Meanwhile, 501(c)(4) nonprofits, also known as social welfare organizations, are permitted to engage in lobbying and electioneering, and after the 2010 Citizens United Supreme Court cases, these organizations gained even broader latitude for providing independent expenditure funds in state and federal elections. As Daniel Chand explains, the “fastest growing, and consequently most scrutinized, type of tax status for nonprofit interest groups is subsection 501(c)(4)” (2014:245). Alongside the growth in 501(c)(4) organizations is the development of complex organizational structures in which nonprofit interest groups partially integrate the activities of 501(c)(3) nonprofits with their 501(c)(4) cousins, along with political action committees (PACs) (Chand 2014; Kerlin and Reid 2010). As Janelle Kerlin and Elizabeth Reid explain in their study of complex nonprofit structures among environmental groups, “Organizations in this structure legally interrelate through overlapping boards, shared finances, and policy agendas with the overall goal of extending their advocacy reach to the farthest extent possible under nonprofit law” (2010:803). In addition to maximizing capacity of advocacy under the existing legal framework, these complex organizational arrangements also create abundant opportunities for wealthy individuals to distribute funds through multiple channels in attempts to influence the political agenda.
Finally, philanthropy in the New Gilded Age is taking place in a climate of public-sector austerity. The Gilded Age philanthropy in the early twentieth century emerged at the outset of a period of extensive state building in the United States, ahead of the New Deal and the Great Society. Government budgets grew considerably during the twentieth century, and public services were added by every level of government. Thus, philanthropic activity in areas like education and relief for the poor was often engulfed later on by a rapidly expanding public sector. Today, the public sector in many places is undergoing a reverse shift. Many state and local governments have contemplated or implemented austerity measures—sometimes in response to steep declines in revenues, at other times in line with the ideological preferences of conservative politicians attempting to shrink government. When public resources are stagnant or declining, donors may find that public officials are particularly interested in projects that are fully funded by private resources. For example, consider the decision by the Baltimore Police Department, following the 2015 protests after Freddie Gray’s death and a spike in homicides, to accept private funding for an aerial surveillance program that was not disclosed to the public and was funded by grant money from the Laura and John Arnold Foundation. Baltimore police contracted with Persistent Surveillance Solutions for an airplane to fly eight thousand feet over the city and record hundreds of hours of video for the police (Donovan 2016). Baltimore—a city with well-publicized challenges in criminal justice and entrenched local budget difficulties—may have been particularly susceptible to accepting a privately funded initiative for a controversial project. A weakened public sector could impact the balance of power between private funders and public interests.
Building on these themes, this chapter focuses on the intersection of philanthropy and politics in the twenty-first century and the consequences of expanding philanthropic involvement in politics. Through data on giving and detailed examples, I show that philanthropists are highly engaged in politics as contributors, advocates, and patrons of government programs. First, I discuss prior literature and theoretical perspectives that examine the relationship between philanthropy and politics in a democracy. Second, I show how philanthropic giving and political giving by wealthy donors are linked. I use data on campaign contributions by major living philanthropists to show how philanthropists are often outsized participants in traditional forms of political involvement. Third, I discuss the use of LLCs and 501(c)(4)s among major donors. These vehicles enable direct support for lobbying and political campaigns, which traditional private foundations are barred from funding. Within this discussion, I also consider how philanthropists work in coordination to influence politics—both in one-on-one collaborations and by convening groups in joint efforts. Fourth, I consider philanthropic efforts to directly support activities traditionally viewed as public-sector responsibilities (such as infrastructure and government staffing) in light of the decline of public-sector capacity in some of areas of the United States. Focusing on distressed cities, I address the heightened role of philanthropy in places where government has retreated or lost capacity to respond to major challenges. I argue that, in combination, these factors make the political system more permeable to various forms of influence from wealthy individuals.
Good Samaritans or Unconstrained Plutocrats?
New philanthropic investments in public priority areas are frequently noted in the media, often with admiring attention. A recent Wall Street Journal article, announcing Michael Bloomberg’s 2018 pledge of $375 million for education initiatives, follows this playbook. The article notes, “Philanthropists have long sought to improve the country’s educational offerings, both as a tool for social mobility and for the sake of the country’s economic competitiveness,” and concludes by listing other recent major gifts in education philanthropy from Bill and Melinda Gates; Blackstone Group CEO Stephen Schwarzman; and Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan (Korn 2018).
The article approaches philanthropic investments in major areas of public policy (such as education) as supportive and charitable work. We could call this view the “Good Samaritan” perspective: philanthropists seek to improve people’s well-being in areas like education, their motives are admirable, and the amounts they have given are impressive. Yet any philanthropic funding that deals with policy issues must inevitably intersect with the political realm. Philanthropists can use their resources, such as large-scale grantmaking and the power to convene organizations and public officials, to impact the direction of public spending, the services offered by governments, the representation of different groups in the political realm, the development of new programs, the structure of partnerships between government and civil society, and many other features of public policy. Given this intersection of public-sector governance and private-sector resources, several perspectives have emerged around a key question: Is philanthropy good or bad for democracy?
Bloomberg’s $375 million pledge brings up a broad set of issues related to democracy. Bloomberg is a billionaire and former mayor of New York City whose three mayoral terms featured many prominent and controversial initiatives in educational reform, such as expansion of charter schools and efforts to measure teacher effectiveness. He has been forthright about his intentions to use philanthropy to influence government, and he “focuses much of his giving on leveraging changes in public policy” (Callahan 2017:14). Will Bloomberg, through his new philanthropic investments, pursue policies similar to those highly contested ideas he introduced as mayor? How will the power he amassed through his political career and wealth impact the uptake of his ideas by school districts or states? How will other policy priorities and interests intersect with Bloomberg’s initiatives—will other ideas without his financial backing lose out? Moreover, with Bloomberg waging a self-funded campaign for the presidency in 2020, his tangled web of philanthropic and political interests grows even more complex and expansive.
Scholars and journalists focused on philanthropy have considered these types of questions about the role of philanthropists in a democratic society. Often, the concern hinges on whether or how the voice of a philanthropist holds greater sway in a public policy arena compared to the voices of ordinary citizens. In particular, there is some divergence between the perspectives of those who focus on elite philanthropy (billionaire donors and major foundations) and the perspectives of those who look at philanthropy as a broader phenomenon, encompassing ordinary charitable giving by people of more modest means. Since this chapter is focused on elite donors, I primarily discuss those who examine the impact of elite donors in a democracy.
Some proponents of elite philanthropic involvement in policy use the term philanthrocapitalism to describe philanthropy as a way to channel the energies of for-profit enterprise to achieve social good (Bishop and Green 2010). From this perspective, the activities of self-proclaimed venture philanthropists, such as Bill Gates, should be celebrated, because venture philanthropists draw on private-sector strategies to advance innovation and effectiveness in philanthropic giving. Furthermore, this type of giving should be encouraged by society, because more social good can be achieved if society promotes the activities of philanthropists who prioritize efficiency and effectiveness. According to Matthew Bishop and Michael Green: “Philanthrocapitalists have a remarkable opportunity to play a leading role in solving the biggest problems facing our world” (2010:278).
Another positive perspective on the relationship between philanthropy and democracy comes from Olivier Zunz (2012), whose history of philanthropy in the United States concludes with the following: “Americans of all classes have invested enormous energy in philanthropy, and . . . the resulting network of foundations and community institutions has enlarged American democracy” (7). It’s important to note that Zunz is discussing philanthropy broadly, not just elite philanthropy, to argue that philanthropy has enriched civil society—groups that represent an enormous array of causes and interests would not exist without the significant investments of philanthropists. As Ted Lechterman and Rob Reich observe in Chapter 6, “Political Theory and the Nonprofit Sector,” funding civil society can serve a variety of functions that could support a well-functioning democracy, including (1) providing a bulwark for civil liberties against an overreaching state, (2) supporting associational life for the development of public deliberation and preference formation, and (3) providing a training ground for participation in formal democratic institutions. Joel Fleishman, whose book centers on private foundations, offers a similar perspective, arguing that a diverse civil society is the most significant accomplishment of American philanthropy:
The greatest contribution of America’s private foundations, therefore, is in continually empowering widely diverse individuals and groups holding a rainbow of views on every conceivable matter of social policy and civic concern, to organize themselves, to make their views heard, and to transform their ideas and dreams into reality. (Fleishman 2008:50)
Other scholars offer a more conditional set of arguments about philanthropy’s relationship to democracy or emphasize critiques. For example, Reich (2016) acknowledges and critiques the plutocratic interests represented by elite philanthropy. Nonetheless, he observes that elite philanthropy can play a distinct role by investing in public priorities that require a long-term time horizon for payoffs (for instance, efforts to mitigate the consequences of climate change). According to Reich, democratic governments tend to have a bias toward the present, discounting the need to invest in policies that would benefit future generations. Foundations are uniquely positioned to invest in experimental and long-range problem-solving ideas that may be too risky or politically infeasible for governments. As Reich explains, “the peculiar institutional form of the foundation can have an important role in democracy in spite of their plutocratic power” (2016:81).
Delving further into the context and priorities of present-day philanthropy, Horvath and Powell (2016) offer a more pessimistic take, arguing that “philanthropy, especially big-money philanthropy, exists in tension—sometimes contributory, sometimes disruptive—with state provision. It alters public conversation, sets agendas, and provides public goods in the absence of public deliberation” (93). In its disruptive form—in which philanthropic-led solutions are an alternative to the public sector, rather than a partner—Horvath and Powell explain that philanthropy can detract from the legitimacy of the public sector and support policy initiatives that bypass public engagement. Emma Saunders-Hastings (2018:152) also argues that contemporary elite philanthropy can be undemocratic, highlighting the “significant, sustained, and structured” influence that elite donors hold over recipient organizations. Furthermore, as Elisabeth Clemens points out in Chapter 7, “Nonprofits as Boundary Markers,” increasing nonprofit responsibility for public service provision can undermine government accountability and create confusion among citizens about whether services are publicly or privately provided.
Finally, in Dissent magazine, Joanne Barkan offers a full-throated critique of elite philanthropy:
They [philanthropists] may act with good intentions, but they define “good.” The arrangement remains thoroughly plutocratic: it is the exercise of wealth-derived power in the public sphere with minimal democratic controls and civic obligations. . . . Because they are mostly free to do what they want, mega-foundations threaten democratic governance and civil society (defined as the associational life of people outside the market and independent of the state). When a foundation project fails—when, say, high-yield seeds end up forcing farmers off the land or privately operated charter schools displace and then underperform traditional public schools—the subjects of the experiment suffer, as does the general public. Yet the do-gooders can simply move on to their next project. Without countervailing forces, wealth in capitalist societies already translates into political power; big philanthropy reinforces this tendency. Although this plutocratic sector is privately governed, it is publicly subsidized. (Barkan 2013)
As Barkan points out at the end of this passage, an important component of the critique of philanthropic influence in public policy is the fact that it is subsidized by the tax system. In other words, not only can philanthropists fund initiatives that give them a louder voice in policy debates, but their funding choices are publicly incentivized by tax exemptions. Reich (2018) is similarly critical of the charitable tax deduction; as he argues, a tax deduction paired with progressive income tax policy creates “a troubling plutocratic bias in the contours of civil society” (132), since wealthier individuals gain a greater tax benefit for each dollar they donate.
In the remainder of this chapter, I provide further empirical evidence to help the reader weigh the arguments around these varied perspectives. On the whole, I think the evidence aligns more closely with the view that the current shape of democratic governance in the United States gives superwealthy individuals ample opportunity for outsized influence—sometimes in nontransparent ways. Elite philanthropy can be a tool for this influence, and some types of philanthropy are particularly troubling in terms of lack of transparency and use as vehicles for political influence. This is not to say that all philanthropic efforts are antidemocratic, but rather that some forms of elite philanthropy are a means of further concentrating influence and power among the very wealthiest members of society.
Political Benefactors
Political scientists have started to closely examine the relationship between wealth and American politics in the context of growing socioeconomic inequality, often focusing on the behavior, attitudes, and political influence of the affluent (Jacobs and Skocpol 2007; Bartels 2008; Hacker and Pierson 2011; Gilens 2012). Wealthy individuals are known to have high levels of political participation and campaign donation (Schlozman, Verba, and Brady 2012; Gimpel, Lee, and Pearson-Merkowitz 2008). Recent court decisions and Federal Election Commission rulings, most notably Citizens United v. FEC, increased awareness among wealthy individuals of the multiple pathways that were legally available for making unlimited contributions to organizations that engage in political campaigning, including 501(c)(4) organizations (Franz 2013). During recent presidential campaigns, ubiquitous media coverage has focused on money in politics, with particular attention to billionaire Super PAC donors like hotel magnate Sheldon Adelson and Charles and David Koch, majority owners of Koch Industries, the second-largest privately held company in the United States. Super PACs are political action committees that can raise unlimited contributions to spend in elections as independent expenditures (in other words, they are not allowed to coordinate with candidate campaign committees).
In an era of growing wealth inequality in the United States, a small class of extremely wealthy individuals is well positioned to play an outsized role in funding political campaigns. Based on research on federal elections, we know that the role of very wealthy contributors is growing. For example, the percentage of campaign contributions from the top 0.01 percent of the voting-age population grew from under 20 percent in the 1980s to 40 percent by the 2012 election cycle (Bonica et al. 2013). Lee Drutman of the Sunlight Institute analyzed the top federal contributors in the 2012 election and showed that 28 percent of all disclosed contributions in that election cycle came from just over thirty thousand people—an extraordinary concentration of political resources among a small group of individuals making up approximately 0.01 percent of the electorate (Bonica et al. 2013).
Given these trends, what is the relationship between major philanthropy and political giving? Do the same donors play an outsized role in both areas? To examine these questions, I begin with data from Kristin Goss (2016) and her analysis of “policy plutocrats,” whom Goss defined as major philanthropic donors who focus on policy-oriented giving. Goss began with 194 individual and family donors who either (1) committed to the Giving Pledge; (2) were identified in the Philanthropy 50 (a list of the biggest donors in the United States compiled by the Chronicle of Philanthropy annually) for 2012, 2013, or 2014; or (3) led a foundation that made one of the top-100 lists of the Foundation Center (a nonprofit that maintains a comprehensive database on U.S. grantmakers) of largest philanthropies (Goss 2016:444). Goss gathered information about the giving behavior of each individual or family on the list of major donors in order to systematically identify the policy plutocrats. For example, she coded whether the philanthropists had identified policy as one of their stated goals in the Giving Pledge or whether they had given a large grant from their private foundation to support a policy goal (Goss 2016:445). As Goss explained, “These donors are directing not only their money but also their time, ideas, and political leverage toward influencing public policy” (2016:442).
To further extend this line of investigation, I began with Goss’s complete list of major donors (both those coded as policy plutocrats and those who were not) and compiled data from the Center for Responsive Politics on each donor or donor household. I gathered every federal political contribution that these individuals made in the 2016 election cycle, including contributions to presidential and congressional candidates, as well as PACs and committees. I used individual names, place of residence, and occupation to match the individual contribution data to Goss’s list of donors. For members of the same household or family (spouses, for example) I gathered data on campaign contributions from each person. In total, the 194 major philanthropic donor households gave $396.7 million in federal campaign contributions during the 2016 election cycle. Incredibly, this is 6 percent of all individual contribution dollars in the 2016 election.1 Consider this observation in light of Drutman’s already surprising finding that the top 0.01 percent, or thirty thousand individuals, gave 28 percent of individual contribution dollars. In this case, a much smaller group of people—less than 0.0001 percent—gave 6 percent of the 2016 total.
The significant amount of funding from this group is not altogether surprising, given what we know about major campaign donors. Research has shown that very wealthy people are extraordinarily prolific campaign donors. Goss’s list of philanthropists includes some people who are well-known for eye-popping levels of involvement as campaign funders, such as Adelson, David Koch, investor George Soros, and hedge fund manager Tom Steyer. Yet how much overlap exists between the major philanthropists and federal campaign giving? Is campaign funding mostly driven by a handful of individuals giving a lot of money, like Adelson and Steyer, while other philanthropic funders concentrate on philanthropy instead of politics?
The evidence from the campaign finance data that I added to Goss’s dataset suggests the opposite—a large share of philanthropic donors are major political donors as well. Overall, 75 percent of the major philanthropists are also federal campaign donors; the median contribution amount is $26,400 and the average amount is $2 million. Although most people do not follow the George Soros model of giving $22.5 million to political campaigns, many wealthy philanthropists do give very large sums. For example, thirty of the philanthropic donor households gave more than $1 million each in 2016. This group includes both well-known individuals, like billionaire technology entrepreneur Sean Parker (founder of Napster), and people with a lower public profile, such as Seth Klarman, a Boston-based hedge fund CEO.
Although wealthy people make a growing share of political contributions, and many of the same wealthy people are also philanthropists, philanthropists can fall into either an extremely high political donation bracket or a comparatively more modest one. Based on Goss’s coding for policy plutocrats, 108 of the 194 major donors or donor households demonstrated an interest in policy-oriented giving. I combined this information with the campaign contributions data to see whether the policy plutocrats are more active political campaign contributors than the philanthropists who do not focus on policy. Indeed, there is a significant difference between the groups. The 108 policy plutocrat donors and donor households gave an average of $3.5 million in federal campaign contributions in 2016, while the other 86 major philanthropic donors gave a substantially smaller average of $218,000 in campaign funds.2 Furthermore, the higher political giving levels among policy plutocrats is present even when controlling for the donor’s level of wealth.3 Thus, policy-oriented philanthropists are also politically oriented in other areas of giving.
These findings show that political giving and philanthropic giving involve many of the same people. Individuals who pledge to give away their wealth or establish large philanthropic foundations—especially those who focus their philanthropy on public policy—are also likely to be major political donors. As large donors, these individuals rarely give exclusively to their own congressional representative. Many give nationally to out-of-state candidates, party committees, and PACs. A recent study by Jesse Rhodes, Brian Schaffner, and Raymond LaRaja (2018) identifies a distinct category of “nationalized donors.” According to their research, “what really distinguishes extreme big donors is their . . . interest in spreading their contributions over a wide range of targets and, in particular, [focusing] donations on out-of-jurisdiction House and Senate candidates” (2018:504). They argue that these donors are uniquely well positioned to gain “surrogate” representation from elected officials outside their home states and suggest that this relationship is a key source of political inequality resulting from campaign finance. Thus, many major philanthropists exercise a voice in politics that is greatly amplified by their resources and inserted into out-of-state congressional elections and national politics. To the extent that philanthropy is a subsidized form of voice in public policy, that subsidy is being offered to people who are already exceptionally adept at speaking (through money) in politics.
Strategically Joining Philanthropy and Politics
In addition to directly contributing to campaigns, donors are identifying new strategies for influencing policy outside traditional foundation models. Traditional philanthropy relies on the private foundation, officially recognized by the IRS as a tax-exempt 501(c) (3) organization, as an institutional form for giving. Private foundations must annually file the 990-PF tax form, which reports annual giving and demonstrates that the foundation has met the minimum payout requirement: 5 percent of average market value of net investments each year toward charitable purposes. Thus, to ensure that their spending meets the charitability requirement, foundations generally limit most of their giving to 501(c)(3) nonprofit organizations. They are also restricted from certain types of political activity, such as lobbying, and cannot directly fund political campaigns.
In the last twenty years, some philanthropists have started to develop strategies to work around these restrictions and develop new approaches to organize their charitable giving and other funding activities. An early innovator in this area is billionaire Pierre Omidyar, the founder of eBay. In 2004 he and his wife, Pamela, founded the Omidyar Network, the vehicle they established to distribute their wealth. The Omidyar Network website has a document that describes their approach, called “Building a Philanthropic Investment Firm” (Omidyar Network n.d.) The Omidyars created a hybrid model that combines a limited liability corporation (LLC, taxable) with a tax-exempt 501(c)(3) organization. With the LLC component, the Omidyar Network makes investments in for-profit businesses whose social impacts advance its values. The nonprofit arm makes more traditional nonprofit grants. Unlike with a private foundation, donors who form an LLC receive no upfront tax advantage (just standard charitable deductions when they support nonprofits). The document is also explicit about some ways that the Omidyar Network intends to influence public policy—for example, through the formation of new organizations like the Democracy Fund (which funds bipartisan leadership initiatives and local media platforms) as well as a sister 501(c)(4) organization, Democracy Fund Voice. As a 501(c)(4), Democracy Fund Voice can be involved in activities like lobbying and campaign contributions.
Several of Omidyar’s recent investments have involved journalism at both the local and national levels. He founded a nonprofit media organization called First Look Media—in the news arena, the best-known publication associated with First Look is its online news site, The Intercept. One of Omidyar’s collaborators is journalist Glenn Greenwald, best known for his articles based on National Security Agency (NSA) documents disclosed by former CIA employee Edward Snowden. The Intercept describes itself as “adversarial journalism,” and the publication has followed Greenwald’s approach of publishing leaked documents and revealing secret government programs, particularly those related to the military and intelligence. The political orientation of the coverage is liberal. Omidyar’s sizable investment in politically oriented media also underscores the sprawling character of his ventures—some transparent, some less so—which involve traditional nonprofits, political organizations with 501(c)(4) status, and media. At least one report on First Look Media, published by Politico, raises concerns about the management of the organization and Omidyar’s influence:
From top to bottom, the company’s culture centered on Omidyar, an odd reverence that I thought not only undeserved, but outright embarrassing. This is a guy who got rich mostly through good timing in the tech business, not because he has an outstanding track record in journalism. Now that he’s rich, he is surrounded by Yes Men and Women who tell him he’s a genius—and while that might be fine in the business world, it’s not good for journalism. He was good at staying out of the journalism itself, but a cult of personality existed around him internally that disrupted the whole organization. (Silverstein 2015)
Although Omidyar supports and influences left-leaning media and advocacy, it is not hard to find similar investments in nonprofit media on the conservative side. For example, Charles and the late David Koch (widely known as the Koch brothers) have supported the Reason Foundation, the Daily Caller News Foundation, and American Spectator Foundation. However, media is but one small slice of the Koch funding deployed to influence politics, as the New York Times reported: “The Kochs have long tried to shape political discourse through their support of nonprofit organizations, universities, and think tanks” (Ember and Vogel 2017). In a detailed analysis of the organizational strategy of the Koch brothers and their influence on the Republican Party, Theda Skocpol and Alexander Hertel-Fernandez (2016) show how the brothers’ influence extends beyond their own resources and through networks to shape the giving of other like-minded donors:
With Charles in the lead, the brothers have accordingly gone far beyond the tactics of other super-wealthy philanthropists. Not content with scattering donations to disparate institutions and causes run by others, they have moved through phases to build their comprehensive political network—and their latest efforts, the third phase, took shape in the 2000s, when organizations specializing in donor coordination and constituency mobilization were added to the earlier mix of think tanks and advocacy groups. (Skocpol and Hertel-Fernandez 2016:685)
Funding from the Koch brothers and their donor consortium (guided through biannual donor seminars) has supported a wide range of right-leaning organizations, including state and national level think tanks, Americans for Prosperity (a 501(c)(4) organization), and the American Legislative Exchange Council (ALEC) (a 501(c)(3) nonprofit), which drafts model bills for state legislators that reflect donor priorities (Skocpol and Hertel-Fernandez 2016). The donor consortium makes the influence of the Koch brothers’ philanthropic activities far more extensive. According to Skocpol and Hertel-Fernandez, “By 2010, more than 200 wealthy invited donors attended the seminars, often in husband-wife pairs, and by now attendance reportedly exceeds 500” (2016:685). Donor seminar guests are required to pledge a minimum of $100,000 per year. Through this channel, the Kochs are able to mobilize an entire network of wealthy conservative donors to support a common set of organizations.
As with media strategies, the donor consortium strategy for gathering philanthropic resources and channeling them into politics is not limited to one side of the political aisle. This approach was also a factor in a policy victory widely celebrated on the Left—the legalization of gay marriage. The Civil Marriage Collaborative (CMC) raised $153 million in philanthropic funding and distributed many grants to state-level organizations. By coordinating the distribution of funds, the CMC made efforts to provide larger grants to fewer states based on their political opportunity contexts. At the state level, groups worked on different strategies including bringing cases to court and supporting voter referendums for marriage equality. The funding collaborative also facilitated a convening that led to the creation of a working group. This working group developed a road map strategy for achieving marriage equality, known as the Roadmap to Victory, which scholars and activists cite as a key moment in unifying both advocates and funders around shared goals to achieve legalization of gay marriage (Freedom to Marry n.d.).
These examples of multi-institutional approaches to giving—practiced by Omidyar through the LLC model as well as the donor consortia—tend to blur the distinctions between political and charitable goals. As nonprofit scholars know well, it can be challenging to separate charitable activity from the political sphere. For those who support the cause of marriage equality, the political advocacy work funded by the CMC could be something to celebrate. Yet similar funding and strategies are also available to opponents of this or any other political movement—and donors can use these strategies without any legal requirements for transparency.
In adopting the LLC model, Omidyar furthers an emerging trend among major donors in Silicon Valley. Two examples of other LLC creations are the Emerson Collective, an LLC started by Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs, and the Chan Zuckerberg Initiative (CZI), founded by Zuckerberg and Chan. The Emerson Collective was founded in 2004, the same year as the Omidyar Network. Powell Jobs has stated that the minimal transparency requirements for LLCs was part of her reason for structuring Emerson Collective this way: “Doing things anonymously and being nimble and flexible and responsive are all things we value on our team” (Miller 2013). The Emerson Collective is focused on educational policy, environmental issues, and immigration and has started an initiative on economic development in Chicago led by former secretary of education Arne Duncan. Echoing the media-focused activities of other billionaires, Powell Jobs also recently took action through Emerson to become a partial owner of The Atlantic magazine, with the expectation of rapidly transitioning to full ownership (Wemple 2017).
The announcement of the CZI drew attention and scrutiny to the LLC model in philanthropy. The sheer size of the gift—at the time of the announcement, the shares that Zuckerberg committed were estimated to be worth $45 billion—naturally garnered significant interest. The LLC’s major areas of investment are education, criminal justice, science (focused on health), and San Francisco Bay Area giving. The organization plans to give away roughly $1 billion per year, and the CZI website has recently added a searchable database of grants awarded since 2018 from three funding entities: Chan Zuckerberg Advocacy—a 501(c)4, Chan Zuckerberg Foundation—a 501(c)3, and the Chan Zuckerberg Initiative Donor-Advised Fund. Thus, CZI is moving towards a more transparent approach to grant-making, but so far, Emerson Collective has not.”
Even funders who do not adopt the LLC organizational form have strategized ways to align philanthropic giving with more explicitly political forms of involvement. For example, heirs of Walmart founder Sam Walton have created their own 501(c)(4) organization known as the Walton Education Coalition. (It is not clear whether the coalition is supported by any broader membership beyond the Walton family). They hired the former director of another education 501(c)(4), Democrats for Education Reform, to head the coalition. Unlike the Walton Family Foundation, which reports grants on tax returns and maintains a fairly transparent website that profiles their work, the Walton Education Coalition has no website and offers no means of tracking the campaigns and initiatives it supports.
Although the coalition has a low public profile overall, some recent news has emerged that sheds light on its role in educational politics. The Walton Family Foundation is well known for long-standing support of charter schools and school choice. Following the defeat of a high-profile ballot initiative in Massachusetts to expand charter schools in the state, media coverage discussed a report funded by the Walton Education Coalition to explore the reasons that the initiative (known as Question 2) failed (Barnum 2018). As the article explains, the “internal memo was commissioned by the Walton Education Coalition, a political advocacy group that spent heavily in favor of Question 2” (Barnum 2018). The example highlights the ways donor money flows through different vehicles in an attempt to influence issue debates through multiple means. The Walton Family Foundation continues to support new charter schools and associations of charter schools, funding for charter school facilities, and various organizations that provide these schools with teachers and leadership. Meanwhile, the Walton Education Coalition can be involved in political campaigns when charter school issues are at stake. Importantly, the Question 2 example demonstrates how even well-funded initiatives can fail at the ballot box—in this case, likely influenced by heavy union counterspending to defeat the initiative.
Across these organizational forms and strategies, a few patterns emerge. First, as philanthropists engage more directly in politics, they tend to provide less transparent streams of funding. Sometimes, this is the result of the funding vehicle they use, such as an LLC or a 501(c)(4). It is also inherently challenging to trace money that changes hands multiple times through different organizations before arriving at its final destination. Some of the aversion to transparency appears to be intentional—wealthy people are choosing these funding strategies in order to avoid public scrutiny. In other cases, the lack of disclosure could be incidental. After all, 501(c)(4) organizations do not have to disclose their donors, and donors have no reason to disclose contributions that will not provide the benefit of a tax deduction. A lack of transparency does not necessarily imply purposeful secrecy.
A second observation is that donors who are involved in multiple arenas around a policy area often strategize their investments. These are not ad hoc contributions—many very wealthy and politically active donors have an agenda. They support certain policy priorities, certain ideological perspectives, and certain institutional reforms. Their donations wrap around these efforts to put pressure on different aspects of the political system—not only directly through political processes like elections and lobbying, but also by leveraging the more traditional realm of philanthropic policy activity, such as pilot programs, implementation, scaling-up organizations, and funding research, expertise, and human capital.
“A Governmental Vacuum”
In 2016, ten foundations based in Michigan pledged to provide nearly $125 million to Flint’s ongoing water crisis efforts as the city begins a long recovery not only from the effects of lead exposure through drinking water but also from the long-term economic and community disinvestment that has plagued the city for many years. The Flint announcement came just over a year after twelve foundations committed $366 million toward Detroit’s Grand Bargain—a compromise resulting from the city’s bankruptcy proceedings that salvaged the Detroit Institute of Arts and helped fund the city’s pension plans. Many of the foundations that contributed to the Grand Bargain also provide millions of dollars to support ongoing community revitalization efforts in Detroit. In both of these Michigan cities facing devastating economic and governmental crises, the philanthropic and nonprofit sector has stepped in to provide substantial capacity and support (Downey and Reckhow 2017).
Scholars across the social sciences have shown how economic, social, and political changes are weakening local governments and contributing to rising philanthropic and nonprofit activity in urban politics (Pill 2018; Levine 2016; Pacewicz 2016; Stone 2015; Anderson 2014; Marwell 2004). “The New Minimal Cities,” by Michelle Wilde Anderson, lays important groundwork on the topic of local government austerity. Anderson examines the consequences of local government bankruptcy or financial receivership for urban public services based on analysis of twenty-eight cities that have experienced fiscal crises. According to Anderson, “Local government is shrinking in these and other struggling cities. Years, if not decades, of budget cuts and asset sales have left little beyond a stripped-down version of core service functions like irregular police and fire protection, rudimentary sanitation, and water supply” (2014:1122). Although this extreme form of austerity is not currently widespread in U.S. cities, local governments throughout the country have implemented cuts, partly due to declining federal grants and reductions in revenue sharing in many states (Pew Charitable Trusts 2016).
In Detroit, the reach of philanthropic involvement in propping up or even replacing traditionally public-sector activities is not limited to the famous Grand Bargain from the city’s bankruptcy. Redevelopment, land use, and infrastructure in the city have all been shaped by significant philanthropic investments. A 2014 article in Philanthropy possibly overstates the case with the headline “Philanthropy Keeps the Lights on in Detroit” (Whyte 2014). Yet there is some justification for the hyperbole, particularly one year after the city had declared bankruptcy. Getting the city’s streetlights functioning again was one public investment that emergency manager Kevyn Orr insisted on, even as the city was demonstrating its financial insolvency in bankruptcy proceedings.
One organization featured in the Philanthropy article is the nonprofit Midtown Detroit Inc. and its executive director, Sue Mosey. The organization receives broad support from philanthropic funders, mostly based in the Detroit metro area (Reckhow, Downey, and Sapotichne Forthcoming). Mosey is blunt about the ways in which her organization is conducting traditional public functions, including “rezoning the neighborhood, installing streetlights, repaving roads, maintaining parks, picking up trash, planting flowers, paying government salaries, wooing development” (Whyte 2014). In diagnosing the need for this work, Mosey describes a “governmental vacuum”:
“We stepped into a vacuum, especially a governmental vacuum,” [Mosey] says, adding that outsiders are shocked at the types of work her group does. She recounts some recent visitors from an Atlanta foundation. “I don’t think they could ever really get their head around it. But when you’re in a city that has lost so much of its tax base, if you want to move forward you just do what needs to be done.” (Whyte 2014)
While the erosion of major public services is an undeniable reality in bankruptcy-era Detroit, the assertion of a “vacuum”—particularly in the governmental and political realm—has some troubling implications.
In fact, the geographic area where Midtown Detroit Inc. is based was not an empty vacuum but rather a neighborhood that has long been known as the Cass Corridor. Yet Midtown Inc.’s influence has been so extensive that the neighborhood is now widely known as Midtown (except by many native Detroiters who stick by the original name). A column in the Detroit Metro Times by a local minister describes the Cass Corridor:
I used to serve as associate to a congregation in the Cass Corridor, somewhat north of Corktown. That was a neighborhood teeming with life and culture, single room occupancy hotels, streetlife in parks and porches and projects, bars where Sixto Rodriguez regularly played. A place where they use to “kick out the jams.” The church served the neighborhood, which poured daily in and out the front door. (Wylie-Kellerman 2015)
The Cass Corridor was known as a high-poverty neighborhood with a relatively transient population, as well as a rich cultural life: in other words, not a vacuum. Local activists and leaders in Detroit have criticized the assumption of a “vacuum” or “blank slate” by developers and leaders promoting redevelopment. According to Lauren Hood, founder of a Northwest Detroit nonprofit organization, Live6 Alliance, “to characterize a place that has three quarters of a million people in it as ‘blank’ is severely shortsighted. The city as ‘blank slate’ theory negates the cultural contributions and shared life experiences of all of those people” (Hood 2016).
Mosey’s comments highlight a “governmental vacuum,” which has slightly different implications—more focused on the absence of public services and capacity in a place. In Detroit, nonprofits like Mosey’s have risen during a time when government is weakened, taking on authority traditionally reserved for government (such as developing infrastructure). Meanwhile, Detroit’s current leadership sees Midtown as a potential model for other neighborhoods. In December 2018, Detroit mayor Mike Duggan announced $35 million in corporate contributions to the city’s Strategic Neighborhood Fund targeting community development in seven neighborhoods. As Duggan explained when announcing the grants: “With the help of our partners and this record-breaking commitment, we are taking the strategy that worked in Midtown and scaling it citywide to bring more development to neighborhoods across our city” (DeVito 2018). Thus, in Detroit, the local government sees an opportunity to deploy donors and incorporate them directly into public policy in the city. In this case, the mayor is providing leadership, but in other instances, donors have been the leaders in steering public policy.
Cities like Detroit have enormous challenges in providing public-sector services, but the ways in which philanthropy occupies this space merit scrutiny. The power to shape policies emerges in much bolder form when the public sector comes to the table broke and uncoordinated—if they are invited to the table at all. The light rail line in Detroit, introduced at the beginning of this chapter, provides an example of philanthropy taking the reins in local and regional transportation policy in a manner that excluded elected representatives.
In 2007, a group of Detroit civic elites formed the nonprofit organization M-1 Rail with the goal of relying on private funding to swiftly deliver a small-scale light rail project (Lowe and Grengs, forthcoming). However, simultaneously, the city was developing its own plans, including a longer light rail line along the same corridor, which was later abandoned in favor of a regional bus rapid transit system. All of these municipal plans floundered as the city moved toward financial insolvency. Ultimately, M-1 Rail worked with their congressional delegation to secure federal funding. M-1 Rail leaders were explicit in excluding the city from their streetcar project; as Kate Lowe and Joe Grengs explain, “the city was not initially considered an appropriate lead agency for the streetcar, given its lack of technical capacity and [concerns about] corruption.” Meanwhile, decisions related to the planning and construction of the streetcar line tended to put economic development considerations, such as downtown business redevelopment, ahead of plans that would enhance accessibility or integrate the system with the city’s other public transportation systems. According to Lowe and Grengs:
The streetcar does not improve accessibility for transit-dependent populations, who are largely black Detroit residents with needs for connections to regional jobs and opportunities. Not only will it fail to enhance accessibility, it could harm accessibility through displacing some bus service. Even as there could be economic benefits that trickle down to low-income, transit-dependent riders, we contend that transportation public spending should still enhance accessibility for transit-dependent populations and work to address racial and economic disparities in accessibility. (forthcoming)
Financial insolvency created a situation where elected leaders in Detroit had little say in the development of a public transit system. Philanthropic and corporate leaders stepped into this space and designed a transit system along a 3.3-mile route in the downtown core of the city that served the interests of a subset of residents while potentially creating additional barriers to the well-being of others.
Prominent elites stepping forward to reshape a city is not a new phenomenon. Major cities are replete with institutions—hospitals, libraries, museums—that are the product of wealthy donor largesse. Nor is this phenomenon limited to Detroit in the present-day context. The transformation of traditionally public services into partly or wholly nonprofit-delivered activities is visible in many other cases. Among the most prominent recent examples is the conversion of the Orleans Parish public schools (in New Orleans, Louisiana) after Hurricane Katrina into a district composed of nonprofit charter schools. This conversion was heavily supported with a large infusion of philanthropic grant dollars.4 Considerable debate has ensued on issues ranging from the firing of the majority African American teaching force that had previously worked in the traditional public schools to improvements in academic outcomes under the reorganized school system as well as shifts in political power. For example, Howard Fuller—an African American education professor and strong advocate of choice and charter schools—offered some comments about the politics of reform in New Orleans:
We need to be clear that there is nothing like New Orleans in the rest of the country . . . the level of financial resources that have gone into New Orleans—there is no comparable level. . . . There are very positive things [in New Orleans] that you cannot deny. . . . But it has also created—amongst certain sectors of that community—a tremendous amount of animosity that worries me in terms of the ability of this to go forward. . . . There’s some people in New Orleans who see the education reform stuff as a larger part of black disempowerment, you know, politically. . . . We have got to find a way to make sure that people feel more empowered in this process. (Moran 2015)
Fuller’s comments highlight the influence of elites, critiques concerning political empowerment and race, and the far-reaching consequences when overwhelming resources are concentrated on public policy in a single city. New research by Domingo Morel and Sally Nuamah supports Fuller’s assessment using public opinion data showing differences between black and white residents’ perceptions of the schools in New Orleans (Morel and Nuamah forthcoming).
Furthermore, many advocates have questioned whether elite preferences align with the views held in the broader public—for example, arguing that education reforms like the policies implemented in New Orleans did not involve public input. Some recent research suggests that there are important and systematic differences between the political attitudes of the very wealthy and the views of the broader public (Gilens 2012). For example, Benjamin Page, Larry Bartels, and Jason Seawright’s survey of the top 1 percent of earners compares the views of the superwealthy to those of the general public on several aspects of public policy, including education (2013). Their findings show a pattern of greater support for market-oriented education reforms, such as charter schools, among the very rich. The authors conclude:
Our data suggest that the great enthusiasm of wealthy Americans for improving the US educational system mostly focuses on improving effectiveness through relatively low-budget, market-oriented reforms, not on spending the very large sums of money that might be necessary to provide high quality public schools, college scholarships, or worker retraining for all Americans. (Page et al. 2013:60)
Interestingly, the preference gap on the issue of charter schools is not very large—while the very wealthy are extremely supportive (90 percent), charter schools also have majority support in the general public (71 percent) (Page et al. 2013:59). However, the very wealthy are far less likely than the general public to support increased public spending for public schools. For example, Page and colleagues find a 52 percent favorability gap on whether the “federal government should spend whatever is necessary to ensure that all children have really good public schools they can go to” (Page et al. 2013:59). Although 87 percent of the general public supports this view, only 35 percent of the top 1 percent agrees.
The influence of philanthropists and wealthy donors in both Detroit and New Orleans points to an erosion of traditional public services and a rise of nonprofit or alternative provision. The public opinion data suggests that the very wealthy are far more supportive of privatizing public services and reducing government spending than the general public. Certainly, philanthropists are not the only proponents of privatization policies. Yet philanthropic investment can introduce an accelerator for implementing these changes in a way that can bypass public debate (Reckhow 2013; Tompkins-Stange 2016).
Meanwhile, the importance of civil society organizations as a bulwark or counterweight to market influence could be heightened in cities with extensive privatization of services and austerity in government, particularly when wealth inequality is growing. In Detroit, an alliance of community organizations led by the Detroit People’s Platform produced a report responding to philanthropic influence in the city and recommending a changed approach—the report analyzes patterns of existing grantmaking in the city to show that few funds reach grassroots community organizations and provides twelve specific recommendations to funders for the future (Allied Media 2017). The report states:
A just revitalization of Detroit requires holistic solutions that address . . . racial and economic inequality at their roots. Such solutions address structural inequality head-on, foster wider access to resources and opportunity, and empower individuals and communities. Unfortunately, the philanthropic sector in Detroit has largely not embraced this approach. (Allied Media 2017:5–6)
In the short term, the activists in Detroit have gained some traction, with the formation of the Transforming Power Fund to support social justice philanthropy in the city (Allied Media 2018). There are also important questions about the future of philanthropic investments in more traditional urban nonprofits (at the neighborhood and grassroots levels) and the variation in these investments across different cities (as discussed by Brandtner and Dunning, Chapter 11, “Nonprofits as Urban Infrastructure”). In key instances, nonprofits have worked to expand representation for marginalized groups in cities (de Graauw 2016; Warren and Mapp 2011). Although philanthropists have demonstrated a capacity to influence the redesign of public service provision in cities, they are also major supporters of the urban nonprofit sector engaged with underrepresented groups. Will citizens and their organizational representatives have the capacity to hold increasingly privatized service providers accountable for the public good? Will philanthropic funders support these efforts through their own grantmaking, even if it potentially opens up philanthropically funded policy initiatives to scrutiny or criticism?
Conclusion and Implications
Wealthy donors in the New Gilded Age are active philanthropists and political contributors with strong policy preferences and agendas. This chapter explored how these phenomena intersect with a political system that enables extensive involvement from campaign donors, features complex organizational forms that integrate political and philanthropic giving, and is characterized by government austerity that has reduced public-sector capacity in many areas. Many analysts have argued that philanthropy is essential for U.S. democracy because of its rich contributions to a thriving civil society. But what if many philanthropists foster competing ideological agendas and hidden channels for narrow sets of ideas to influence the policy process and exacerbate inequities in influence? What happens to the less affluent voices that are drowned out by overwhelming resources entering politics from multiple directions? Social scientists have many questions to explore across policy areas and levels of government, seeking to disentangle and gauge the effectiveness of multiple methods used by the affluent to assert their influence. Philanthropy needs to be better understood as a significant mechanism for influence among the most affluent citizens in the American political system.