A few weeks ago, Jeff Bezos, the wealthiest individual in the world, donated $98.5 million towards fighting homelessness. Jeremy Corbyn tweeted in response: ‘That’s 0.09% of your net worth. Just pay your taxes.’. As founder and CEO of Amazon, Bezos’ fortune owes as much to his strategy of aggressive tax avoidance as it does to free shipping, the former enabling Amazon to pay little or no corporate income tax. Amazon isn’t alone. Worldwide, CEOs actively pursue means of legally avoiding tax, with tax havens collectively costing governments around $550bn a year. Meanwhile, the same individuals are awarded badges of honour as they commit billions to philanthropic schemes designed to combat social ills. When regarded as a substitute for progressive taxation, big philanthropy can have dangerous consequences.

Big philanthropy is characterised by self-interest. The rich accrue significant tax, commercial and political advantages from giving away their money. Tax-deductible benefits for all kinds of charity are not the only incentives. Philanthropy provides a useful tool for reputation cleansing. Concerned by the rise of populism, CEOs use charitable donations to sway public perceptions of the corporate world. High-profile acts of charity create smokescreens which divert attention away from the injustices on which many corporations build their fortunes. When tobacco giant Philip Morris spent $75 million on its charitable contributions in 1999, the company then launched a $100 million advertising campaign to publicise them. In a similar vein, this year has seen fossil fuel giant Ineos attempt to greenwash its image by sponsoring the Daily Mile, a school fitness initiative. While today Bezos might talk of tackling homelessness in his own backyard of Seattle, just last year Amazon used its influence in the city to kill tax legislation aimed at raising money for homeless services and affordable housing. A recent investigation by the Guardian reveals that the unethical ways in which Amazon is run - on low-wages and poor working conditions - create the very conditions of vulnerability which result in homelessness. Philanthropic image-polishing allows corporate malpractice to be swept under the rug. Far from altruistic, then, elite generosity deserves our scepticism.

"the ways in which the rich donate their money can entrench inequality."

Motivated by self-interest or not, can we really berate the wealthy for giving back? Giving something is better than nothing, you might say. But the ways in which the rich donate their money can entrench inequality. The idea that creators of wealth know best how to dispose of it is misguided. Scarcely a fifth of charitable donations from the wealthiest Americans go to underserved communities. This is because big philanthropy skews support in society towards the personal interests of the CEO. The majority is funnelled into the arts and wealthy public-school districts or private schools, exacerbating inequalities rather than redressing them. Observing philanthropists of Victorian era, Oscar Wilde remarked: ‘they seriously and very sentimentally set themselves to the task of remedying the evils that they see in poverty, but their remedies do not cure the disease: they merely prolong it.’ By focusing on tackling poverty rather than inequality, donors aim to resolve the antimony between charity and capitalism. Big philanthropy thus serves to reinforce rather than restrict the exact political-economic system which enables the world's 26 richest people own as much as the poorest 50% today.

The implications for democracy are alarming when one considers the social composition of the elite. In the UK, charitable foundation boards are 99% white and 2/3rds male. In the US, 85% are white and over ½ are male. The substitution of a system of progressive taxation for a system of philanthropy disenfranchises the majority of non-white, non-male persons from making decisions about how and where money should be invested for the public good. Big philanthropy thus injects plutocratic elements into democratic settings.  

"Acts of simple charity are not to be discouraged, but we cannot build a society which is reliant on the power of wealthy individuals."

Philanthropy removes responsibility from democratic institutions. It places wealth redistribution in the hands of the rich, and social responsibility in the hands of those who have exploited society for personal advantage. A more progressive tax system, on the other hand, would ensure a society shaped with our consent by accountable governments. Rather than fostering a golden age of philanthropy, CEOs need to abandon methods of tax avoidance and look inwards to providing stability and fair wages for their own workers. Historian Rutger Bregman summed it up perfectly at the 2019 World Economic Forum: ‘It feels like I’m at a firefighters conference and no one’s allowed to speak about water. Stop talking about philanthropy and start talking about taxes.’ As we speak, Amazon is fuelling a large bidding war between America’s cities over who will house its second headquarters, with huge tax breaks being the main incentive for brokering a deal. Nice try Bezos, but that’s not quite what Bregman meant. 

The behaviour of Bezos reveals the many misconceptions which govern our understandings of ‘giving back.’ Elite philanthropy is no substitute for global tax justice. Acts of simple charity are not to be discouraged, but we cannot build a society which is reliant on the power of wealthy individuals - mostly white and male – to direct finite pots of private assets for some public influence. Scatter-gun donations triggered by elite interests do not address structural issues. At best, they offer surface-level support to a select few. At worst, they reinforce inequality while providing a social justification for excessive individual wealth.

While we must commend the generosity of those who do well and now strive to do good, we have lost the essential premise of a just society when we substitute private action by ‘change-making’ elites for government policy and fair taxes.