When Occupy Wall Street made headlines last fall, I thought it would be just another a publicity stunt. Instead, the “leaderless resistance movement” that claims that “the 99% that will no longer tolerate the greed and corruption of the 1%” has spread across the world. In fact, it has raised the profile of financial industry practices and government regulations. If you did not know what predatory lending, sub-prime mortgages, financial derivatives or even credit default swaps were, you know now.
In addition to journalists and citizens paying attention, leaders in the non-profit industry are following, too. For example, Bradford Smith, president of Foundation Center wrote, “Steve Jobs and Occupy Wall Street: Two Ways to Disrupt Philanthropy.” Initially, I thought the post would be another homage to Steve Jobs, instead he connected philanthropy to the Occupy Wall Street movement:
No matter how you slice it, philanthropy is driven by asset-based wealth; indeed, large organized philanthropy of the foundation variety is fueled by the top 1 percent of the population that holds 23.5 percent of national income — and whose “greed and corruption” the Occupy Wall Street movement is protesting. For foundations, Wall Street is not some distant exotic land, given that their investments are often entrusted to some of the biggest financial firms; nor is it unheard of for foundation presidents and executives from some of those firms to sit on each other’s boards.
Smith’s statement highlights how connected and dependent charitable giving is to wealth. Additionally, the U.S. giving philosophy is based upon principles that those with immense means should contribute to those without. Without this ethos, Warren Buffet’s Giving Pledge would honestly be irrelevant. In the past, ‘giving’ was traditionally considered charity but today it has morphed into the buzz word ‘philanthropy’ which ties grant making to creating social impact. It makes me wonder, if the Occupy Wall St. movement is successful in getting large financial institutions to stop taking risky positions in the financial markets, what would that mean for the future of philanthropy.
This debate leaves me with a multitude of questions. Will wealthy individuals would stop giving? Or will their charitable giving patterns change? I could be wrong, but what incentive would wealthy people have to make gifts of stocks, participate in planned giving or even endow universities, foundations and support other not-for-profit organizations if they would no longer be able to recieve some residual income or tax benefit off from their investment donation? However, one must wonder if the staid world of philanthropy will eventually become more transparent about its dependency on the financial services industry?