comscore Notre Dame donation backlash raises debate: What’s worthy of philanthropy? | Honolulu Star-Advertiser

Notre Dame donation backlash raises debate: What’s worthy of philanthropy?

  • NEW YORK TIMES / 2018

    Nicolas Berggruen, a billionaire philanthropist, at the 2018 Ellis Island Medals of Honor ceremony on Ellis Island in New York. The charitable response to the fire that ravaged Notre Dame has met resistance as critics wondered why other tragedies did not receive the same degree of support. But philanthropic experts and advisers said they were not shocked by what seemed like an ungrateful response. Berggruen said he wasn’t surprised by the backlash. “In the age of anxiety, people will look to accuse lots of different groups for all of the evil or some of the evil,” he said. “Rich people for sure fall into this.”

As flames engulfed Notre Dame, people from around the world opened their wallets and began making donations. Within two days, nearly $1 billion was raised to help pay for the restoration of the 856-year-old cathedral in Paris.

The charitable response to the fire that ravaged Notre Dame was a reflection of the cathedral’s stature as a cherished monument of French cultural heritage. Some benefactors pledged more than $100 million each, including Francois-Henri Pinault, whose wealth comes from luxury brands like Gucci and Yves Saint Laurent, and Bernard Arnault, the richest person in Europe and chief executive of luxury goods conglomerate LVMH.

But the outpouring met with resistance as critics wondered why tragedies like the incineration of the National Museum of Brazil in Rio de Janeiro in September did not receive the same degree of support. And it rekindled class resentment in a city already racked by the yellow vest movement, a populist response to economic inequality in France that tapped into a rising global movement against the concentration of wealth.

Some criticism was aimed at donors for not paying their fair share in taxes and thus depriving the French government of the revenue to repair Notre Dame itself. Others decried the reputational boost bestowed on philanthropists at a time of national tragedy. And some attacked the premise of giving so much to a damaged cathedral when that money could better benefit social service organizations that could provide food, shelter or a better education to needy citizens.

But philanthropic experts and advisers said they were not shocked by what seemed like an ungrateful response.

“It’s not surprising,” said Nicolas Berggruen, a billionaire philanthropist who founded the Berggruen Institute, which aims to reshape political and social institutions to develop long-term solutions to society’s challenges. “In the age of anxiety, people will look to accuse lots of different groups for all of the evil or some of the evil. Rich people for sure fall into this. Philanthropists are an extension of that.”

Others took a less philosophical approach, saying that for society to be most effective, philanthropists needed to work with government and the private sector, not alone or in opposition to them.

“Instead of praising the act of philanthropy itself, people are saying it’s not the highest and best use of that capital,” said Nick Tedesco, senior philanthropic adviser at J.P. Morgan Private Bank. “When did we get to a place where we feel comfortable criticizing other people’s altruism?”

If such critical responses toward prominent donations becomes a trend, donors could be forced to rethink big gifts. Some are worried that could have a chilling effect on giving, while others hope it forces people to think differently about what their money supports.

Those who are worried about the backlash think anger over unequal distribution of wealth is bleeding into the wrong areas.

“There’s a lot of understandable concern about wealth inequality and a lot of concern about the bad behavior of some,” said Phil Buchanan, chief executive of the Center for Effective Philanthropy and author of “Giving Done Right.”

“But I worry that we’re conflating concerns over our approach to taxation with a critique of philanthropy, and I don’t actually follow the logic,” he added.

“I don’t believe most big philanthropists are motivated by a desire to maintain the status quo via their giving or to protect themselves from higher taxation.”

He said private philanthropic organizations like the Robert Wood Johnson Foundation supported ideas that had become part of the social fabric, like the 911 emergency system and the field of nurse practitioners. And the Libra Foundation, which is backed by a part of the Pritzker family, supplied $350,000 in grants to organizations addressing the needs of families being separated at the U.S.-Mexico border.

Buchanan said that to solve social problems, all three sectors of society — public, private and philanthropic — needed to do the jobs they were meant to do at a high level, not be sidetracked by a backlash.

“What I’m more concerned about is the broad-brush critique of the whole concept of giving and the under-appreciation of all the good giving has done,” he said. “We need a healthy civil society doing different things.”

Tedesco had a different concern, that already too much money earmarked for philanthropy was not being put to use.

“With Notre Dame, you were able to tap into otherwise dormant philanthropic capital,” he said. “But that leads to the question: Why is philanthropic capital lying idle? The nonprofit organizations don’t know how to compel donors to give.”

Instead of shying from criticism, philanthropists should accept it as the cost of trying out new things that may not work, Tedesco said. “You should be more willing to own that criticism because it shows you’re attempting to find solutions or approaches that will ultimately get to success.”

But for those who would rather avoid backlash, anonymity is always an option. Caroline W. Hodkinson, director of philanthropic advisory at Bessemer Trust, said some of the firm’s wealthiest clients were opting to use limited liability companies to hold money earmarked for philanthropy but that could also be used for impact investing. The investment vehicles give donors greater flexibility over how the money is managed, but they also provide near-total anonymity.

“A private foundation is about the least private thing you can have,” she said. By meeting IRS reporting requirements, “you’re opening up your affairs to the world,” she said.

Anonymity on large gifts is also fairly easy to arrange. “It’s a business negotiation,” said Jared Feldman, who, as the partner in charge of the private client group at accounting firm Anchin, has worked on four gifts of more than $100 million each.

But anonymity presents a problem because of its inherent lack of transparency.

“I’m concerned about the anonymity issue,” said Lawson Bader, chief executive of DonorsTrust, a donor-advised fund. Knowing who a benefactor is helps build trust, he said, whereas anonymity can hide potential conflicts. For instance, museums are re-examining gifts from the Sackler family, a prominent donor in the art world, after its involvement in the opioid crisis became known. Had the donations been made anonymously, they would not be under scrutiny now.

Some critics hope that the backlash goes beyond assessing the merits of certain donors and donations and instead forces a wholesale re-evaluation of philanthropy.

Anand Giridharadas, author of “Winners Take All: The Elite Charade of Changing the World,” said he found the criticism of the donations to Notre Dame healthy and wanted to see more of it. “I’ve been advocating for exactly that kind of reaction,” he said. “It is not hostility to giving. It’s simply an injection of skepticism about this kind of exertion of power.”

When philanthropists, particularly in the tech world, make sweeping pronouncements like Mark Zuckerberg’s $3 billion plan to cure all disease, Giridharadas said society needed to tone down its adulation and be skeptical.

Giridharadas said he would like to see philanthropists make gifts instead to organizations that shake up the social order. “The kind of giving I advocate is ‘being a traitor to your class’ giving,” he said.

Unlike Giridharadas, who supports shaking up norms, Berggruen is focused on helping democracies work better by drawing on the best philanthropic traditions.

“What philanthropists have done in America is much more to put their money to use in society,” he said. “The state has a role, but Bill Gates can take more risk than the private sector can and take different kinds of risk than the state can take. In America, on the whole, that’s been beneficial.”

Aside from the backlash, the debate stirred by the donations to Notre Dame has also raised hope.

“The takeaway form Notre Dame is, if that can happen in 24 hours, the resources are there to take on major issues,” said Rob Hansen, founder of Goodnation, which measures the effect of donations. “Imagine instead of redirecting that billion dollars, we raise another billion dollars to other causes.”

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