Apra Reviews: ‘The Givers: Wealth Power, and Philanthropy in the New Gilded Age,’ by David Callahan

By Gillian Sciacca, Prospect Management and Research Analyst at Williams College 

What I’m Reviewing:

The Givers: Wealth Power, and Philanthropy in the New Gilded Age,” by David Callahan (Alfred A. Knopf, 2017). Callahan is the founder and editor of Inside Philanthropy, a digital media resource focused on giving by wealthy donors and their associated entities.

How I Learned About It:

I came across the book in my Amazon recommendations. I also read about it on Inside Philanthropy, where the author is founder and editor. 

Where You Can Find It:

Bookstores and online booksellers, notably Amazon and the CASE.org store. 

Summary:

In “The Givers,” Callahan explores recent developments in philanthropy by very wealthy individuals, and not only directed to nonprofits. The wealthiest donors also contribute to political candidates, political action campaigns (PACs), private organizations, and even their own political campaigns, like billionaires Michael Bloomberg and Tom Steyer. These developments are occurring in a time of "demosclerosis," a reduced ability and inclination of our local and federal governments to act nimbly to address societal and economic responsibilities and concerns, such as primary education and climate change. 

The author presents donor case studies and interviews to illustrate how recent, large-scale domestic giving affects systemic change. Especially in the past 20 years, these donors are no longer confined to the metropolises of New York, Boston and Chicago. They're spread throughout the United States in new wealth hubs such as the West Coast and Colorado, which is home to five billionaires as of 2017. 

The author groups modern philanthropists into the following categories, with some overlap, and provides advice for working with their differing philanthropic goals and behaviors. 

  • Grandmasters: Those engaged in funding political causes, candidates and think tanks.
  • Super-Citizens: Philanthropists who shape the geography of our physical environment.
  • Disrupters: Those with a proclivity to questioning and disturbing conventional philanthropic models.
  • Leverage Points: Giving directed to legal methods of addressing flaws in large social systems, such as education policy and LGBTQ rights.
  • Advocates: Donors committed to standard models of steady and high-level giving to encourage policy change.
  • Networkers: Philanthropists who create greater impact by pooling their resources with other similarly motivated donors.
  • Heirs to Influence: Typically children and grandchildren of wealth who have undertaken a focused and strategic process regarding philanthropy derived from inherited wealth.
  • The New Medicis: Philanthropists who want to effect dynamic change in fields previously funded by government, especially science, the arts, and education.
  • Agents of Wealth: Donors who establish traditional foundations to direct impact giving, and the skilled leaders they employ to lead their giving vehicles. 

Callahan concludes that nonprofits soliciting gifts from the ultra-wealthy must be prepared to operate in a new paradigm of donor expectations of accountability, communication and progress. Those working in prospect development may find this categorization of donor behavior helpful for forming cultivation, solicitation and stewardship strategies. 


Interested in reading more book reviews? Read Gillian Sciacca’s last book review on "Generation Impact: How Next Gen Donors are Revolutionizing Giving" by Sharna Goldseker and Michael Moody.


Key Takeaways:

Not all wealthy philanthropists behave similarly regarding giving trends. Disrupters, for example, tend toward giving away all of their fortunes during their lifetime for large-scale, hopefully maximum-impact donations, while others prefer the more formalized structure of a foundation, museum or other institution to be managed in perpetuity. 

Callahan does well to indicate that philanthropic behaviors aren't limited to age or industry, either. Eli Broad, the only individual who created two Fortune 500 companies in different industries (KB Home and SunAmerica), is classified as a Disrupter. While he was born in 1933, long before the internet ushered in the economy of disruptive technological innovation, he displays the character of a Disrupter, according to Callahan — philanthropists who display minimal interest in following established American conventions of philanthropy. Eli Broad used $600 million to establish the Broad Institute, an independent nonprofit entity studying biomedical and genomic medicine in partnership with Harvard and MIT. 

Researchers need to diversify their range of sources when considering a wealthy prospect's philanthropy. This can be directed not only toward foundations and nonprofits, but to PACs, 501(c)(4)s and private concerns, such as charter schools. Not all donors are searching for a tax write-off: consider Michael Bloomberg, who donates via his private foundation but also effects societal change by funding his own political campaigns as a three-term mayor of New York City and potential Democratic Presidential candidate in the 2020 election.

The overall influence of philanthropy from the very wealthy is nascent yet increasing, and has the power to shape society in dramatic and all-encompassing manners, such as ongoing reform of the public school system. The author notes that large gifts by wealthy donors have the potential to hobble governmental interventions and bypass regulation, and that increasing instances of radical change by the wealthy can disaffect the average citizen from civic participation. As mega-donors give on a profound scale, how can the average citizen be effectively represented and strive to cause meaningful change? As a prospect development professional, I learned about the importance of mindfulness in fundraising research and strategy: securing the gift is not the goal. Securing a purposeful, well-intentioned and community-oriented gift that will impact my constituencies in equitable and positive ways is the goal.

Philanthropy has been used to enfranchise marginalized groups, such as the Ford Foundation's early support of LGBTQ rights, but it can also work against the greater good by amplifying the voices, ideals and agendas of a select few. 

If I could interview the author, I would ask…

The Givers” indicates that the very wealthy in society give to a variety of causes for myriad reasons.

They are not a single organism, but their behaviors can be studied as best-case scenarios (or cautionary tales) for our work with passionate donors of smaller gifts. As a researcher, I'm always interested in finding elusive assets and gifts — wealth hidden via shell companies and tricky non-disclosed gifts to foundations and lobbying firms, for example. To that end, I'm interested in the author’s methodology and research techniques: what information he thinks we’re overlooking, and what data points he finds unobtainable. 

Callahan indicates several times throughout the book that large donations by individuals with certain societal goals have the potential to change society, not always for the benefit of all. Through his research, I’d like to know more about instances in which a gift was drastically modified due to community resistance. I'm interested in strategies to counter the more nefarious forms of giving that may undermine social constructs, such as when private donors purchase and develop land. 

One example given in “The Givers” is that of Barry Diller's development of Pier 54, off the west side of Manhattan, into a public park. Recently branded Little Island, the project is expected to cost $170 million, with $40 million of that coming from public funds, but with minimal public outreach or input. Critics worry that the neighboring areas will experience immense levels of gentrification. Clearly, the best of intentions can lead to negative outcomes. How can we as fundraising professionals thoughtfully strive to mitigate negative outcomes? 

Finally, the author advises that we look to public-private partnerships as a method to both harness large-scale philanthropy and increase the effectiveness of our admittedly slow-to-change federal, state and municipal democratic institutions. As a researcher in higher education, I'd like to further investigate strategies for effecting positive outcomes for the many stakeholders in my constituencies — the institution, student body, and faculty and staff; local community members and residents; our local government and municipal services; and well-intentioned mega-donors.

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