The Art of Selfish Giving

And the list of the top fifty wealthy donors is out and, as usual, the wealthy give large amounts of cash to places that just don’t need it. The worst was today’s story in the Los Angeles Times about Mark Zukerberg and his wife. He gave nearly a billion dollars to……drum roll, please…….the Silicon Valley Community Foundation!!!! Yes, he gave just under a billion to a foundation to upkeep the community that he and his fellow multi-millionaires and billionaires enjoy. Last I checked, Silicon Valley wasn’t knee deep in poverty. Frankly, I don’t call that charity.

Robert Reich wrote a really terrific column a few months back about how the wealthy donate and why. I really suggest everyone read’s it because it’s an eye-opener. Rich people do not give to places that need money. They make vanity donations or they start their own “foundations”, mostly for tax write offs. Or, in Larry Ellison’s case, to avoid massive fines by the SEC. They need to give money for tax purposes but they are loathed to give it without getting major recognition, like a big plaque or a building or a wing with their name on it. They also don’t like to give where they have zero say in how their money is spent. And they certainly don’t want to give to places where their fellow one percenters won’t see the plaque, wing, building, etc.

When you go through rich people’s donations, you see a long list of foundations they created, prestigious museums, prestigious universities, prestigious hospitals, etc. But you see very, very little giving to where the money is truly needed, like poverty programs.

I love looking at the list at the Chronicles of Philanthropy. The top Douchebag Award goes to Steve Schwarzman, who gave a MASSIVE donation this year to a CHINESE University! He gave $103 MILLION dollars to Tsinghua University. Wow, really, Mr. Schwarzman? A lot of AMERICAN students could have used a donation like that to one of our STATE UNIVERSITIES. Not the “MIT of China”. He claims he wants to start a “Rhoades Scholarship” type program that will help bridge the gap between the West and East. The founder of Blackstone? I seriously doubt it. More like he sees a good business opportunity. Mr. Schwarzman also gave to the Catholic organization Inner City Scholarship Fund, which seems less to do with caring about Catholic education and more about “education reform” (translation: smashing the public school system), the New York Library (apparently to get his name engraved into the hundred-year-old marble) and New Yorkers for Children (which looks more like a charity for socialites to show off their couture than anything) and Iraq and Afghanistan Veterans of America (probably the only decent charity he gives to).

If one goes through the list, you see a large amount of wealthy donors donating large amounts of money to foundations in their own name. George Mitchell is listed, even though he and his wife are dead (Mr. Mitchell this July, Mrs. Mitchell in 2009). But, according to this article, Mr. Mitchell’s foundation primarily funds the already well funded Texas A&M, the Houston Symphony and other Houston cultural icons. He also does the requisite, feel-good Boys & Girls Club and the Galveston Historical Society. But, like most of these of these foundations, the giving is more about image than about doing real charity work.

Another foundation is John Arnold’s. He is a wealthy Texas hedge funder. I have to give it his public relations people, they are good at obfuscating. I had to do some major digging to get to the heart of this “foundation”, which is more politically motivated. This foundation is heavily involved with the “education reform”, which should really be called, “privatization and corporatizing” of our public school system. The foundation also seems to be involved in creating laws to destroy state pension funds. I hardly call this “charity”.

Another one on the list is the Omidyar Network. This was created by Ebay founder Pierre Omidyar. This looks like ANYTHING but charity. It’s nothing but funding businesses. How does this even qualify for charitable status? That is called INVESTING. Investing is not charity. When a group funds both for-profit AND non-profit businesses (just the fact that it’s funding businesses in the first place should be a disqualifier), it should not be granted charitable status. He also gave to the Hawiian Community Foundation, which is a very well endowed foundation that looks good on paper but seems to have some serious internal problems. And his wife’s “HopeLab” just seems utterly frivolous when people are suffering from real problems. I am sure Mr. Omidyar thinks that he is one of the “good guys” but, frankly, he’s just another out of touch, “born on third”.

Another Silicon Valley gazillionaire on the list is Sergey Brin, founder of Google. He also gave to his own foundation that he create with his now soon-to-be ex-wife. And, again, it’s a “good on paper” foundation (though maybe I shouldn't bitch too much, as they gave $500K to Wikimedia) but really does very little in the way of “charity”. When you do any digging, the foundation gives here and there to other foundations. Yes, curing Parkingson’s Disease is a nice goal but, one foundation giving to another is just not helpful. In this case, this foundation giving to the Michael J. Fox Foundation, which is already incredibly well-funded because of Mr Fox’s celebrity. And, frankly, there is already a ton of funding going to universities for this type of research.

Here’s the big problem with rich people’s donations to any kind of medical institution. They don’t allow the facility to put the money to use where it’s NEEDED. They want it used in specific ways, even if it’s not the most necessary or efficient use of the funds. And, with the wealthy, they tend to give to prestigious but already extremely well-funded medical facilities and shy away from places that NEED the money. My favorite example is Barbara Streisand’s very large donation to Cedars-Sinai Medical Center here in Los Angeles. If you live in Southern California, everyone knows that Cedars is the Cadillac of hospitals, where the wealthy go to get treated. Trust me, they aren’t hurting for money.

Another example is David Koch’s large donation to New York Presbyterian Hospital/Morgan-Stanley Children’s Hospital. Yes, this is a very well funded hospital (just having the children’s hospital named after the now defunct Morgan-Stanley is kind of a giveaway). But, then again, Mr. Koch is a douchebag philanthropist. He heaps large amounts of money on the richest art museum in the nation, the Metropolitan Museum of Art. Here’s the deal with the Met……since its inception, it’s been a one-percenter’s favorite “charity”. Anyone who’s anyone in that sphere, from Vanderbilts down to Annerberg, have their names plastered all over that museum and have left their vast art collections to the Met. It’s a badge of honor for the wealthy. So, the next time you go to the Met and you see that “recommended donation”….ignore it. That is one museum that does NOT need your money. Just tell them David Koch paid for you. Read “Rogue’s Gallery”. It paints a very greedy and ugly picture of the Met.

But back to Mr. Koch. His “charity” goes to places that either serve his needs or where he can plaster his name where other one percenters can see it. He donates to programs for prostate cancer research because HE suffers from….prostate cancer!! The man has never given a dime to people who truly need it. His favorite “charities” are universities like MIT and John Hopkins, both of which have huge endowments. He also funded the Met, the Smithsonian and American Museum of Natural History (another well funded museum). And, along with New York Presbyterian Hospital (his donation is building a new outpatient building to be named after him), he donated to Mt. Sinai Medical Center, so that it’s Jaffe Food Allergy Institute could be renamed after him. He doesn’t give a dime unless his name is put up. Nice guy.

Another winner in the Douchebag Giver race is Los Angeles’ very own miser, Charles Munger. Mr. Munger is one of Warren Buffet’s partners. And, no, I don’t worship at the altar of the almighty Buffet. Mr. Munger likes to hide his background (it requires some digging) but you find out that Mr. Munger is just another member of the “born on third” club. Dad was an attorney in Omaha, who went on to be a United States District Judge. Munger’s giving is a laundry list of one percent giving. A long time resident of Los Angeles, Mr. Munger donates a lot of his money to his one alma mater, University of Michigan. UofM is THE most well-funded universities in the state of Michigan, thanks to many very wealthy donors. Plus the fact that the University’s football team, the Wolverines, is one of the most winning and a powerhouse team. UofM has a very LARGE endowment. Mr. Munger also donates to Stanford University, one of the wealthiest private universities in the world, to the Marlboro School, a chi-chi private school his wife attended, Harvard-Westlake school, another chi-chi private school where the spoiled brats of the rich and stupid of Los Angeles attend and Polytechnic School, a VERY pricey private prep school in Pasadena that Mr. Munger is an alumna of. He has also given substantial amounts to the Huntington Library and Gardens (the former residence of railroad tycoon Henry Huntington….another very well-funded entity). Another one who thinks that charity begins at home in the mansion.

I know what you are saying, “Why should I care what rich people do with their money?” Well, normally, I wouldn’t give a damn, either. But, like everything else with the wealthy, they like to outsource their donating. In this case, it’s with large tax write-offs. Which means, dear fellow Mr. and Mrs. Taxpayer, we are helping to foot these people’s largess through our taxes that WE PAY. Not only do these people NOT pay their fair share, they are even making us pay for their so-called “charity”. WE get to help them put their names on buildings through our taxes. And they get to be congratulated for their faux-generosity!

Robert Reich, the award-winning Professor of Economics at University of California, Berkeley, who has served in the administrations of Presidents Ford and Carter and was Labor Secretary for President Clinton, explains the tax issue much better than I could ever do it….”In economic terms, a tax deduction is exactly the same as government spending. Which means the government will, in effect, hand out $40 billion this year for “charity” that’s going largely to wealthy people who use much of it to enhance their lifestyles.

To put this in perspective, $40 billion is more than the federal government will spend this year on Temporary Assistance for Needy Families (what’s left of welfare), school lunches for poor kids, and Head Start, put together.”

Do you think it’s right that Ron Lauder (heir to the Estee Lauder fortune) will get to write off the whole amount he spent to purchase the famous Klimt Adele Bloch-Bauer painting ($135 MILLION he spent on the Klimt) because he “donated” the painting to the Neue Gallerie? That’s not charity, friends. That’s a multi-millionaire avoiding taxes and screwing us, the taxpayers. He couldn’t have even donated it to a real museum (even to the greedy Metropolitan Museum), where the great unwashed could enjoy it. It’s to a “museum” that Ron Lauder owns and where the painting currently resides. It’s not a “museum”, it’s a gallery to house Mr. Lauder and his partner’s art collection and get a write-off. Nice.

I am sick of hearing how the rich give more. As you can see, they don’t. There are a few exceptions but for the most part, the wealthy only give to things that benefit them. But, I do have to give a shout out to some of the good guys.

The Motion Picture and Television Fund is a great example of a community that takes care of it’s own, which is actually the MPTF’s motto. You may think that it’s the movie industry paying for other wealthy movie people. But, it’s not. The MPTF is for the whole entertainment community. It helps actors and crew members in times of need. It run health clinics, helps with financial aid and other services. If you have been a member of one of the entertainment industry unions, you are eligible. It’s funded through payroll donations and various fundraisers. The nursing/retirement home is a nice one and has taken care of the entertainment industry’s elderly. You do not have to be a big star to get care. But everyone in the industry gives.

In 2006, the nursing home was threatened to be closed. After much press, many in the industry came together and contributed to keep the home open. And the nursing/retirement home is still open. It shows how when everyone, rich and poor, work together, good things can happen.

There was some other donors on the list who actually gave, it seems, from the heart. Jeffrey Carlton, founder and CEO of Press Forge in Paramount, CA, gave a large donation to Hoag Hospital in Newport Beach, where he had been a patient. Hoag IS in a wealthy area but it treats people from many communities. The foundation that was set up after his death is for three other charities, Impact Drug and Alcohol Treatment Facility in Pasadena, St. Jude’s Research Hospital and Paralyzed Veterans of America, which will each get a quarter of Mr. Carlton’s $212 million. Mr. Carlton died in 2012. And, the nicest part? His donations are all unrestricted. Which means he left the donations to the discretion of the organizations to use as they needed.

The only other person on the list to give to a charity that benefits the others besides the one percent was Seattle lawyer, Jack MacDonald. Mr. MacDonald did not live the life of a multi-millionaire. He wore threadbare clothing and clipped coupons and lived at a not-so-fancy retirement home. When he died at the ripe old age of ninety-eight, very few knew how much money he actually had. Having no children, he left his fortune to Children’s Hospital of Seattle, the Salvation Army and University of Washington’s School of Law. They get to split up $187.6 million dollars.



As with so many of our laws, we need to take a serious look at our charitable giving tax laws. I really don’t care if David Koch wants to give money so that people will build monuments to his over-inflated ego. But, the taxpayers should not be forced to pay for his vanity. We need to look at endowments of universities and tell the public ones that they either need to provide more scholarships with the money or find a way to use the money more efficiently. No public university should be sitting on BILLION or even multi-million dollar endowments. Private universities should be told that they need to start finding better uses for their endowments or get faced with taxes on the money. And we need to start setting up better oversight. If someone wants to make a non-tax deductible donation, that’s their business. But, once you involve the IRS, it becomes ALL our businesses. And, sorry guys, I am just not thrilled with giving more money to the Met, Harvard, Stanford, New York hospitals, Cedars-Sinai or “foundations” set up by rich people to give as they want while we get to pay forty percent. Charitable giving is just another tax dodge for the wealthy. We need to say enough. And when rich people say, “Well, look how much we give!” just tell them that Harvard doesn’t count.