Bezos’ $10bn donation should not pitch philanthropy and taxation against each other – that would be a zero-sum game

 

Rhodri Davies

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Amazon founder Jeff Bezos’ recent major foray into philanthropy came with the announcement that he is going to commit $10 billion to combat the global climate crisis. The world’s richest man has previously been criticised for his lacklustre efforts when it comes to charitable giving, so can we assume this news was universally welcomed? Well no, not exactly.

Whilst many have made positive noises about the commitment to make a donation that is (by most experts’ reckoning) the second largest ever (Warren Buffett has donated more than $36 billion since 2006 and pledged $37 billion to the Bill and Melinda Gates Foundation after his death), there are just as many who have viewed it with suspicion and launched attacks on Bezos from many angles.

Some argue that the donation is not actually large enough, as it represents only seven per cent of Bezos’s overall wealth. Others claim that it is an attempt on Bezos’s part to buy good publicity and deflect from concerns about the treatment of Amazon workers, or the lengths the company goes to to avoid paying taxes around the world.

There are also some who argue that even if the gift is in itself laudable, it is inherently anti-democratic to allow an individual to exert such outsize influence, and that the money should instead be directed through taxation and public spending.

The point here is not that all of this criticism is unfair or unjustified, or that giving away large sums of money should make anyone immune from criticism. Rather it is that philanthropy is a remarkably complex topic (as I never hesitate to tell anyone who will listen!). Thus, in considering examples like Bezos, we need to be careful that we don’t end up making sweeping generalisations about philanthropy as a whole that are not just unwarranted, but potentially damaging.

Take, for instance, the relationship between philanthropy and taxation. Should Jeff Bezos pay his fair share of tax? Yes. Should anyone see his charitable donations as a reason not to press for Amazon to stop engaging in tax avoidance practices? No. But should we believe, as some critics suggest, that even were Bezos to pay his taxes, it would still be better for the government to take all of the additional money he then chooses to give philanthropically as well?

This is far more debatable, and tends to betray a world-view in which philanthropy and taxation are pitched against each other in some sort of zero-sum game. But this is not the case. Public spending and charitable giving should serve different purposes in society, so there is a need for both rather than a binary choice between the two.

We also need to be careful about making any assumptions that arguments based on the specifics of Jeff Bezos’s situation (or that of any mega-donor) apply to philanthropy as a whole.

His level of wealth exceeds that of even the conventionally rich to the extent that they cannot be lumped together. Wealth at Bezos’s level should indeed bring additional considerations about democratic legitimacy and the potentially distorting effect on public policy; but for the vast majority of philanthropic donors around the world who do not come from the rarified ranks of the ultra-wealthy these risks are far less pertinent.

We need to take particular care here in the UK that arguments based on US examples are not imported wholesale, discounting our differences. For one thing, we don’t have donors at the scale of Bezos; but even if we did, there are other substantive differences in terms of taxation, politics, and the historical and cultural story of our philanthropy that deserve to be part of the conversation.

Unfortunately this requires nuance. And as in many other areas of debate these days, nuance is not all that fashionable in discussions of philanthropy. Hence commentators skirting over such awkward details in their pursuit of a pithy soundbite.

The reality for philanthropists these days is that they will find themselves facing both scrutiny and criticism. This is not altogether new: in fact if you look back at history, praise for big donors has often been peppered with criticism.

This is no bad thing: by embracing scrutiny, those of us who want to promote and support philanthropy stand a far better chance of ensuring that we get the best version of it. But what we need to guard against are lazy simplifications and broad-brush polemic. The danger is that these do not provide any basis for positive reform, but merely add to a general cynicism about the very notion of people being able to direct their private wealth towards the public good. And we do not know what the lasting effect of that might be.

Rhodri Davies is Head of Policy at Charities Aid Foundation


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