The Economic Context: Growing Disparities of Income and Wealth

In the last few years, poverty rates have remained constant in the New England states. The effort to reduce poverty in New England and the United States has been thwarted by trends of growing income and wealth inequality. Since the late 1970s, the real incomes for the majority of U.S. households have remained stagnant or fallen. During the same time, asset ownership has become dramatically more unequal, and the concentration of wealth in the hands of a few has increased. The causes of this accelerated inequality are complex, but underlying the picture are a series of rule changes, both public policies and private corporate practices. These include public policies governing taxation, global trade, labor rules, and government spending priorities.These rules have favored asset owners at the expense of wage earners

The Economic Context: Growing Disparities of Income and Wealth

In the last few years, poverty rates have remained constant in the New England states. The effort to reduce poverty in New England and the United States has been thwarted by trends of growing income and wealth inequality. Since the late 1970s, the real incomes for the majority of U.S. households have remained stagnant or fallen. During the same time, asset ownership has become dramatically more unequal, and the concentration of wealth in the hands of a few has increased. The causes of this accelerated inequality are complex, but underlying the picture are a series of rule changes, both public policies and private corporate practices. These include public policies governing taxation, global trade, labor rules, and government spending priorities.These rules have favored asset owners at the expense of wage earners. This article originally appeared in a 2004 issue of the New England Journal of Public Policy (Volume 20, Issue 1): http://scholarworks.umb.edu/nejpp/vol20/iss1. For this reprint, the author has prepared an update, which is included after the conclusion of the original article

Spending Millions to Save Billions: The Campaign of the Super Wealthy to Kill the Estate Tax

The multimillion-dollar lobbying effort to repeal the federal estate tax has been aggressively led by 18 super-wealthy families, according this report by Public Citizen and United for a Fair Economy. The report details for the first time the vast money, influence and deceptive marketing techniques behind the rhetoric in the campaign to repeal the tax.It reveals how 18 families worth a total of $185.5 billion have financed and coordinated a 10-year effort to repeal the estate tax, a move that would collectively net them a windfall of$71.6 billion.The report profiles the families and their businesses, which include the families behind Wal-Mart, Gallo wine, Campbell's soup, and Mars Inc., maker of M&Ms. Collectively, the list includes the first- and third-largest privately held companies in the United States, the richest family in Alabama and the world's largest retailer.These families have sought to keep their activities anonymous by using associations to represent them and by forming a massive coalition of business and trade associations dedicated to pushing for estate tax repeal. The report details the groups they have hidden behind -- the trade associations they have used, the lobbyists they have hired, and the anti-estate tax political action committees, 527s and organizations to which they have donated heavily.In a massive public relations campaign, the families have also misled the country by giving the mistaken impression that the estate tax affects most Americans. In particular, they have used small businesses and family farms as poster children for repeal, saying that the estate tax destroys both of these groups. But just more than one-fourth of one percent of all estates will owe any estate taxes in 2006. And the American Farm Bureau, a member of the anti-estate tax coalition, was unable when asked by The New York Times to cite a single example of a family being forced to sell its farm because of estate tax liability

Gilded Giving 2020: How Wealth Inequality Distorts Philanthropy and Imperils Democracy

Ten years ago, in August 2010, several dozen U.S. billionaires led by Bill Gates and Warren Buffett pledged to give away at least half of their wealth before their death. Many have donated considerable sums to charities and foundations since then. But as a group, these billionaires have seen their fortunes skyrocket in the decade since the so-called Giving Pledge was launched.The wealth of the billionaire class is growing so fast, it's simply outstripped their capacity to give it away. But in a time of acute charitable need, there's another growing concern in the broader charitable sector: Most of these funds may end up in family foundations and donor-advised funds that could legally exist in perpetuity — without ever supporting real, on-the-ground charitable work.Over the last two decades, charitable giving has been on a steady upward trajectory. But this growth has masked a troubling trend: Charity is becoming increasingly undemocratic, with organizations relying more on larger donations from a smaller number of wealthy donors, while receiving shrinking amounts of revenue from donors at lower-and middle-income levels.What's more, a growing share of these high-end donations go not to the organizations that actually perform charitable work, but to tax-privileged private foundations and donor-advised funds that pay only a small percentage of their assets to support working charities. These vehicles offer substantial tax benefits to donors, but may then hoard most or all of these donations in their endowments, drastically limiting what's available to on-the-ground nonprofits.This poses a growing risk to the independence of the nonprofit sector, the integrity of the tax system, and the health of our democracy — and that was before two new existential threats to the nonprofit sector: the GOP tax cut package that passed in 2017, and the COVID-19 pandemic and recession, both of which are likely to concentrate more wealth at the top while hurting the ability of people of ordinary means to give.Diminished giving threatens to exacerbate philanthropic inequity even further at a time when the demand on charities is increasing. This is not the time to discourage broad philanthropic participation, or to hoard charitable revenue in wealth-preservation vehicles. Gilded Giving 2020 examines several possible implications of these conditions and suggests some solutions

Private Foundation Giving to Commercial DAFs

Private foundations are currently allowed to make grants to DAFs and to count those grants toward their annual charitable distribution requirement. We examined the 2016-2018 tax returns of private foundations filing electronically to see how many of their contributions went to the 45 largest national commercial DAF sponsors in the U.S, including those affiliated with wealth management firms such as Fidelity Investments and Goldman Sachs. We discovered that private foundation grants to commercial DAFs averaged $737 million per year from 2016 to 2018, and more than$934 million in 2018 alone

Gilded Giving 2022: How Wealth Inequality Distorts Philanthropy and Imperils Democracy

As inequality has grown in the United States, our nation's charitable system is in danger of becoming a taxpayer-subsidized platform of private power for the ultra-wealthy. This poses risks to the independent nonprofit sector and our society as a whole.Since our first edition of Gilded Giving 2016: Top Heavy Philanthropy in Age of Extreme Inequality, we have shown that charities are receiving shrinking amounts of revenue from donors at lower- and middle-income levels, and that they are more reliant on larger donations from smaller numbers of wealthy donors. And we have shown that wealthy donors tend to pour their dollars into foundations and donor-advised funds — charitable intermediary vehicles they control — rather than into public operating charities (i.e. active nonprofits on the ground).This updated edition of Gilded Giving describes the extent of the capture of our charitable sector by the wealthy, the risks this poses, and how it has been exacerbated by the pandemic and other external factors. We also propose strong reforms that would reverse these trends and realign our charitable system to serve the public interest

Class Lives: Stories From Across our Economic Divide

[Excerpt] Class is the last great taboo in the United States. It is, according to Noam Chomsky, “the unmentionable five-letter word.” Even in this period of growing economic inequality, we hardly ever talk about class. We hear daily, in the mainstream media, about unemployment, bailouts, proposed tax cuts or tax hikes, Congress regulating one industry and deregulating another, budget cuts, recession, recovery, roller-coaster markets, CEO bonuses, and more. Given all the attention to economics, it is interesting that talk about social class has been so skimpy. Sometimes I think of class as our collective, national family secret. And, as any therapist will tell you, family secrets are problematic. With rare exceptions, we just don’t talk about class in the United States. Most of us believe that the United States is a classless society, one that is basically middle class (except for a few unfortu­nate poor people and some lucky rich ones). Sometimes talk about class is really about race. We have no shared language about class. We have been taught from childhood myths and misconceptions around class mobility and the American dream. Many of us are confused about class and don’t tend to think about it as consciously as we might our race, ethnicity, gender, religion, age, or sexual orientation. Nonetheless, our class identity has a huge impact on every aspect of our lives: from parenting style to how we speak, from what we dare to dream to the likelihood we will spend time in prison, from how we spend our days to how many days we have. We are living in a period of extraordinary economic insecurity and inequality. It is an inequality that crushes the poor, drains the working class, eliminates the middle class, simultaneously aggrandizes and dehumanizes the rich, and disembowels democracy

Gilded Giving: Top-Heavy Philanthropy in an Age of Extreme Inequality

Unprecedented levels of charitable giving in recent years mask a troubling trend. This report shows that charities are increasingly relying on larger and larger donations from smaller numbers of high-income, high-wealth donors. Meanwhile, they are receiving shrinking amounts of revenue from the vast population of donors at lower and middle-income levels. This trend mirrors the increasing concentration of wealth in larger society.The report finds that this has significant implications for the practice of fundraising, the role of the independent nonprofit sector, and the health of our larger democratic civil society. The increasing power of a small number of donors also increases the potential for mission distortion.This study tracks significant changes in philanthropic giving in recent years, puts forward a number of possible implications of these changes, and offers some solutions

Gilded Giving 2018: Top-Heavy Philanthropy and Its Risks to the Independent Sector

What are the risks to the autonomy of the independent nonprofit sector—not to mention our democracy—when a growing amount of philanthropic power is held in fewer hands?This report takes a close look at the impact of increasing economic inequality on the philanthropic sector. It finds that our charitable sector is currently experiencing a transition from broad-based support across a wide range of donors to top-heavy philanthropy increasingly dominated by a small number of very wealthy individuals and foundations.As we reported in 2016, growing inequity in charitable giving continues to hold risks not only for nonprofits themselves, but also for the nation. This is truer now than ever, as ever-greater proportions of charitable dollars technically qualifying as tax-deductible donations are diverted into wealth-warehousing vehicles such as private foundations and donor-advised funds, and away from direct nonprofits serving immediate needs.This updated edition of Gilded Giving focuses on the impact of increasing financial inequality on the philanthropic sector, highlights trends that have either arisen or increased in intensity since the initial publication of our report, puts forward several possible implications of these changes, and suggests some solutions