When 'Giving Back' Becomes 'Atonement'

As the federal government moves to reform how charities are funded, the 'moral debt' of wealthy philanthropists comes under the microscope.

Two seemingly separate storylines – one of taxing the rich and another of reforming the role of charity – have dominated our national news lately. The first chronicles the ongoing saga of the Occupy movement, which has spread northward from New York City to our own urban centres, and to hundreds of cities around the world. The public spaces around the Vancouver Art Gallery and Victoria Square in Montreal are now as "occupied" as those around Wall Street and St. Paul’s Cathedral, and the movement is generating debate among all quarters.

A second, apparently distinct storyline has emerged from the federal government’s recent proposal to reform the way it funds charitable organizations, and to move Canada closer to a U.K.-inspired "Big Society" model of social service provision. The latter story has expanded into an in-depth Globe and Mail series on philanthropy, which, among other things, sets out BMO Capital Markets advisory board member, Donald Johnson’s argument that the tax benefits available to Canadian philanthropists should be expanded even further at this time.

As of yet, the dots between these two storylines have not been fully connected. However, recent articles in the New York Times and the U.K. Guardian have begun to expose the extent to which the stories are deeply intertwined.

The first point of connection is this: the relative silence with which, many argue, philanthropists have responded to growing issues of domestic economic inequality is becoming more jarring as the noise of the Occupy movement increases. A recent piece by national correspondent Stephanie Strom in the New York Times cites Emmett D. Carson, president and CEO of Silicon Valley Community Foundation: “At a time when America is having a debate about the social contract, philanthropy is silent ... We are silent about the depths of the problems of homelessness, joblessness, foreclosure, hunger, and people are starting to believe that philanthropy is irrelevant to the core needs of their communities.” As a result of this silence on core poverty-related issues, Carson suggests, the Obama administration is going the opposite direction to that being advocated by Johnson, and proposing a reduction in charitable tax deductions available to American philanthropists. The political judgment implicit in the American proposal seems clear: tax dollars will be more effective than charity dollars in addressing the nation’s economic ills.

Second, the Occupy movement and its rallying cry of "the 99 per cent versus the one per cent" may have a lasting impact on public perceptions of philanthropists, their money and their status in the community. In a recent editorial in the Guardian, columnist Timothy Garton Ashargues that the bankers who profited on the road to the financial crisis have accrued a "moral debt" that should be repaid through charitable giving. “Call it what you like,” he says, but the term Ash suggests is “atonement.” Ash’s use of the term "atonement" to rebrand what philanthropists like to call "giving back" is powerful, and may foreshadow a growing public skepticism about philanthropists and their charitable activities. After all, if bankers, businessmen, and businesswomen are once again to be characterized as the “robber barons" of society, why should their wealth not be considered as a stolen good, and the poor as its rightful owner? The potential for a paradigm shift in our understanding of charity seems clear.

At a time when the governing Conservative party has the power to fundamentally alter our social contract, the Globe and Mail should be commended for beginning a discussion about the role of the "third pillar" of our society, and the relative merits of having our social services financed by public or private funds. And it may be, as Johnson suggests, that in a time of government cutbacks, providing additional tax-breaks to philanthropists will mobilize needed private capital and thus, further the public good.

However, in the emotional context of the global Occupy movement, increasing tax benefits for wealthy donors could trigger a backlash, and strengthen the position of those who seek to characterize philanthropy as a system of state subsidies for opera lovers, who occasionally deign to bestow a fraction of their income on the poor. Governments and philanthropists need to tread carefully, therefore, in this brave new world of the "99 per cent versus the one per cent." The common threads in our conceptions of charity and justice seem to be wearing thin.