English language
Published Oct. 8, 2023 by Oxford University Press, Incorporated.
For-Profit Philanthropy
Elite Power and the Threat of Limited Liability Companies, Donor-Advised Funds, and Strategic Corporate Giving
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Abstract
For-Profit Philanthropy reimagines the history of philanthropy law, revealing it not to be a tool to subsidize private efforts to benefit the public but a strategic arrangement binding ordinary Americans and elites together in a common purpose. Rather than providing for pure private (no tax or regulation) or public (highly progressive taxes or tight regulation) control over the vast resources amassed by the wealthiest Americans, in 1969 Congress struck a Grand Bargain with both sides. That Grand Bargain preserved private autonomy by imposing a regulatory framework that elevated the public’s voice through detailed timing, targeting, and transparency requirements. Philanthropy law uses the private foundation form to ensure that elites must each year spend a small but meaningful portion of their assets pledged to the public. The foundation also imposes prophylactic targeting restrictions on transactions separating a funder’s business and political interests from their philanthropy. Foundations must also disclose to …
Abstract
For-Profit Philanthropy reimagines the history of philanthropy law, revealing it not to be a tool to subsidize private efforts to benefit the public but a strategic arrangement binding ordinary Americans and elites together in a common purpose. Rather than providing for pure private (no tax or regulation) or public (highly progressive taxes or tight regulation) control over the vast resources amassed by the wealthiest Americans, in 1969 Congress struck a Grand Bargain with both sides. That Grand Bargain preserved private autonomy by imposing a regulatory framework that elevated the public’s voice through detailed timing, targeting, and transparency requirements. Philanthropy law uses the private foundation form to ensure that elites must each year spend a small but meaningful portion of their assets pledged to the public. The foundation also imposes prophylactic targeting restrictions on transactions separating a funder’s business and political interests from their philanthropy. Foundations must also disclose to the public more about the sources and uses of their assets than any other business or charity. Far more assertive regulation would have been possible in the absence of the Grand Bargain’s minimum standards of accountability. Today, innovations from commercially affiliated donor-advised funds to strategic corporate philanthropy to philanthropy limited liability companies set that Grand Bargain aside to provide elites with greater autonomy and privacy. Private ordering, targeted regulation, or a new strategic bargain could strike a modern balance, preserving the benefits of this long-standing partnership. For-Profit Philanthropy offers a detailed roadmap to show how it could be accomplished.