How much philanthropy and politics should intersect is once again a major question in the presidential race. As Michael Bloomberg gets ready for his first appearance on the debate stage this evening with other candidates for the Democratic presidential nomination, we see an intense new focus on whether his generosity is to be applauded or a cause for concern. Spoiler alert: We think it’s a great thing, but as philanthropy is under scrutiny, we all need to think hard about where to draw the line between generosity and politics.
It’s no longer novel to see criticism of the philanthropy of presidential candidates injected into the national conversation, of course. Four years ago, the generosity of the two main presidential candidates unexpectedly became an election issue.
Critics claimed that the Donald J. Trump Foundation was a sham, holding little money donated by Trump himself and serving chiefly to promote his business and political interests. The New York state attorney general investigated details brought to light by the Washington Post and agreed. The foundation was closed. Trump paid the state $2 million, to be distributed to court-approved charities. Limits were placed on future participation in nonprofit governance by Trump and three of his adult children who had been Trump Foundation trustees.
But wait, there’s more: From the other side of the partisan divide came charges that the Bill, Hillary and Chelsea Clinton Foundation had also relied mostly on Other People’s Money — that is, donations from third parties, including some who may have been seeking favors from the Clinton family. Moreover, these accusers said, the Clinton Foundation was spending only a small fraction of the sizable sums it was raising.
The Clinton Foundation never was forced to undergo the type of reckoning that befell the Trump Foundation. But gifts to the foundation have declined sharply since Hillary Clinton’s defeat.
Now, although the 2020 presidential campaign has barely begun, giving has again become a political issue — but this time in the completely opposite way. Former New York City Mayor Michael Bloomberg, who entered the race in November, faces accusations not of being a phony philanthropist but of doing too much of the real thing.
Bloomberg, one of the richest men in the world, has already given billions of dollars of his own wealth to a private foundation, Bloomberg Philanthropies, with much more promised in the future.
Critics from many sides have started complaining that he uses his donations to advance his electoral goals. According to a lengthy analysis published in the New York Times over the weekend, Bloomberg’s philanthropic spending has helped him develop “a national infrastructure of influence, image-making and unspoken suasion” that transformed him into “a plausible contender for the Democratic nomination.”
Visibility and Connections
This is not a new charge against Bloomberg. During his time as New York City’s mayor, opponents claimed that he used contributions to many of the city’s nonprofits to build political support — especially for his effort to change the local term-limits law so he could run for a third term (he succeeded). Others found fault with his willingness to sidestep normal budget procedures by using his personal fortune to make large grants to municipal programs.
But the latest round of criticisms goes further. The most recent charge focuses on Bloomberg social-media campaign ads that highlight his concerns about the environment and ask readers to advise “Mike” on where “his next round of climate crisis spending” should go. Bloomberg’s critics see this solicitation of “advice” as a way of using grants from his foundation, or the prospect of grants, to win him political support. This would be illegal, since grant-making foundations are barred from participating in elections.
Bloomberg’s funding also goes toward other presidential campaign issues, like maternal health, reproductive rights, and the opioid crisis. The foundation works closely with mayors, leaders of nonprofit groups, and other people whose support could help the former New York mayor’s run for the White House. As a result, some charity-watchers say, the line between Bloomberg Philanthropies and the Mike Bloomberg 2020 campaign has become very blurry indeed, risking damage to public trust in tax-exempt foundations and potentially stifling criticism from organizations interested in Bloomberg’s financial support.
Bloomberg’s grant making in these areas has certainly given him visibility, as well as numerous connections to potential supporters that his competitors for the Democratic Party’s presidential nomination might envy. It is also true that the chief executive officer of Bloomberg Philanthropies has been Patricia Harris, a veteran of New York politics who served as Bloomberg’s principal deputy when he was mayor. She has now moved over to his campaign staff.
But there’s a sizable “other hand.” At the most literal level, Bloomberg’s environmental social-media ads, which sparked the most recent controversy, carefully avoided saying or even suggesting that the “climate crisis spending” Bloomberg wanted would be related to Bloomberg Philanthropies. More generally, nobody has yet alleged that Bloomberg has misused his foundation in the way the 2016 candidates were accused of doing or that his campaign is breaking laws.
Different From Trump and Clinton
Indeed, the law allows donors to benefit from the activities of their foundations as long as whatever personal benefits they receive are “incidental” to the foundations’ proper grant-making programs. On the basis of Bloomberg Philanthropies’ performance and governance, there can be little doubt that the foundation runs such a program. Bloomberg has long spent parts of his fortune on philanthropy related to policy and politics. Also, his history of philanthropy predates his time as an office-seeker, and some of his largest gifts, like the billions he has donated to his alma mater, Johns Hopkins University, are remote from political ambition. Even critics of “big philanthropy” acknowledge that Bloomberg’s grant making has been impressive.
This is no Trump Foundation problem. It’s not even a Clinton Foundation problem. If it’s a problem, it’s an American problem. The political and ethical ambiguities we see in the operation of Bloomberg Philanthropies are built into the relationship between American politics and American philanthropy. Outside the United States, private donors typically have narrower roles because governments take responsibility for health care, social services, and other efforts to help the public.
But the United States, we ask both government and private groups to take on these duties in the belief that multiple ways of identifying and testing possible solutions to public problems are better than fewer ways. While foundations exist elsewhere, American law is especially encouraging to them, betting that large accumulations of wealth have greater capacity to tackle difficult issues than do smaller, albeit still important, charitable contributions. We have mitigated the hazards of this system by creating numerous rules aimed at making sure foundations are used chiefly to benefit the public and not the business or political interests of their donors.
Michael Bloomberg has begun to run the presidential gauntlet. He will have to talk about stop-and-frisk, redlining, and alleged sexist comments. Although his philanthropy may seem like the least of his worries at the moment, the question of his giving will be a part of his challenges. Yet, we should not lose sight of how much Bloomberg has accomplished philanthropically with his own money. That by itself would be a big change from what we now see in the White House.
