Throughout history, excess wealth has been used to salve society’s problems, funding hospitals, food banks, and building libraries to develop minds and cathedrals to lift the spirits. But increasingly, the charitable urge has shifted away from such worthy causes and, increasingly, reflects a distinct progressive agenda that seeks, ultimately, to transform lives through the expansion of state power.
This reflects, in part, the shift in the nature of wealth in America. In the past, rich people tended to be employers of middle- and working-class people and frequently identified primarily with their local regions. But in an increasingly nationalized and globalized era, the charitable impulses are increasingly wide and diffused, less focused on personal improvement but in service to a distinct ideology, usually far to the left, but also on the libertarian right.
The predilections of the ultra-rich will likely loom over politics and policy debates for decades to come. In the U.S., nonprofits’ assets have grown nine-fold since 1980. In 2020, nonprofits brought in $2.62 trillion in revenues, constituting more than 5.6% of the U.S. economy. And this process is just beginning, as the boomers begin to leave behind their riches. The consulting firm Accenture projects that the Silent Generation and baby boomers will gift their heirs up to $30 trillion by 2030, and up to $75 trillion by 2060.
Yet this bounty will be highly limited due to the rapid concentration of assets in ever fewer hands, with the top 1% in the U.S. increasing their share by roughly 50% since 2002. The class implications of this process are profound. The winners clearly will be the small pool of big inheritors, as we already see in Jeff Bezos’ ex-wife, MacKenzie Scott; Bill Gates’ now-discarded wife, Melinda French Gates; and Laurene Powell Jobs, the left-leaning publisher of The Atlantic and the widow of Apple’s founder.
New and old money
The new money is strikingly different and much younger in contrast to more-conservative funders like Charles Koch, Oracle founder Larry Ellison, Rupert Murdoch, and the Irvine Company chairman Don Bren, all well into their 70s or 80s. They are increasingly outdone by the more-youthful “enlightened” rich, who have consistently outraised and outspent the political “right” in recent years by a margin of nearly 2 to 1.
The progressive elite are for the most part connected with firms with oligopolistic market control. Controlling 90% of markets like search engines (Google) and operating-system software (Microsoft), and dominating the cloud and online retail (Amazon) or 90% of phones (Google and Apple) does not turn executives into risk-takers, but acquirers. As well, three tech firms now account for two-thirds of all online-advertising revenues, which now represent the vast majority of all ad sales.
Finance, the other pillar of progressive philanthropy, has also become markedly more concentrated, with the number of banks down a full third since 2000 in the U.S., while Europe experienced a slower, but similar consolidation. The five largest banks control over 45% of all assets in the U.S., up from under 30% about 20 years ago. The five largest investment banks control roughly one third of investment funds; the top 10 control an absolute majority. These firms have tended to embrace progressive dogma as well, most notably in the adoption of ESG (Environmental, Social, and Governance) rules.
Read the rest of this piece at Philanthropy Daily.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
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