As the polls had been predicting, the Democrat Bill de Blasio was elected as the new mayor of New York this week with an overwhelming 49-points majority. This marks a notable shift for New York, which has been controlled by right-wing mayors for the last 20 years since Rudy Giuliani was elected in 1994, and was followed in 2002 by Michael Bloomberg. De Blasio’s election has generate a huge amount of interest in the UK because he managed to win convincingly despite running on a left-leaning platform of the sort that would be surprising here, let alone in the generally more right-of-centre US. However, De Blasio’s core campaign issues of combating rising inequality and challenging the policing policies in the city (which have usually been credited with the remarkable reduction in crime seen in New York in recent times) have obviously resonated with voters.
This is all extremely interesting, but this blog isn’t the place for an attempt to analyse the political lessons that can be drawn from de Blasio’s election. Instead I want to look briefly at what it might mean for philanthropy in New York and beyond.
The main point is that de Blasio’s anti-inequality stance is likely to put him in opposition to philanthropy. Whilst philanthropy almost certainly doesn’t cause inequality, inequality is a necessary precondition of philanthropy (at least in the major donor sense) and some might argue that it plays a role in perpetuating inequality. If you want to read some interesting arguments on the uneasy relationship between philanthropy and inequality I recommend this and this. Personally I subscribe to the view that there is no inherent reason that philanthropy cannot be used as a tool to address inequality (and potentially a very powerful one). And pragmatically, given that inequality does in fact exist, this seems like a better option than simply gnashing our teeth from the sidelines. Of course, whether much philanthropy in the US is actually focused on combating inequality, given that 45% of donations go to religious organisations or to higher education establishments, is another question…
An article (or possibly polemic) in Forbes this week made it clear that Bill De Blasio having a negative attitude towards philanthropy is more than just a theoretical concern. As part of his mayoral campaign he made clear his support for a policy of forced redistribution of private donations to the nonprofit conservancies which manage a number of New York’s main parks. These conservancies are almost entirely funded by public donations, including major gifts such as the gigantic $100m dollar donation made in 2012 by hedge fund manager John A. Paulson. However, de Blasio argues that this has resulted in inconsistency in the funding of the city’s parks, and that it would be better for a portion of all private donations to be redirected to a centralised, citywide park conservancy that would spread the money to areas currently less well served.
Whilst de Blasio’s analysis of the problem may be right, his proposed solution – to my mind – betrays a mistaken view of the nature and role of philanthropy. Yes, philanthropy is by its nature patchy: more money will go to some causes than others because they are more popular with donors or because the organsiations working on them are more effective at fundraising. However, this is only a failing if you assume that philanthropy has to meet the same standards of equity and fairness in distribution that public spending does. And this is exacerbated if you also assume that the purpose of philanthropy is to fund through private donations things that the State would otherwise fund through taxation and spending. I do not think this is the right way to understand philanthropy though, and such a view is always going to lead to dissatisfaction and anger.
If you consider a program of work that happens to be philanthropically funded, but which is also the sort of thing that it might be reasonable to expect the State to deliver itself, then you might well get angry if you find that program is not meeting your standards of universality and fairness. But then the proper response is to argue that the program should be delivered by the State and funded through taxation, not to propose some sort of ugly hybrid in which the money is raised through voluntary donations but then controlled by public bodies. This looks precisely like trying to have your cake and eat it, by maintaining control over distribution without having to raise the money in the first place.
Apart from the underlying philosophical reasons to be uncomfortable about de Blasio’s proposal, there is also a much more pragmatic reason to worry: mandating government control over charitable donations is likely to provide about the most effective disincentive for giving that one could imagine. By betraying the charitable motivations of donors, especially the wealthier ones whose concerns are likely to be more acute, de Blasio might end up stifling donations and finding himself with a net loss in terms of the money available to maintain New York’s parks. This is surely not a desirable outcome.