When charity comes at a cost to the public good: What we get wrong when we talk about mega-giving
Updated: Sep 3
Mega giving is a long-standing American tradition, ultimately making mega-foundations more powerful now than they were 100 years ago, due to their greater number and the societal context in which they operate. As federal and state budgets continue to shrink social safety nets over recent decades, the public has become increasingly reliant on the nonprofit sector to meet basic human needs.
However, this dynamic raises a fundamental question: When societal well-being relies on the whims of the ultra-wealthy, who truly holds power over our public policy?
The Origins of Unchecked Institutional Power
The architecture of modern mega-giving took root in the early 20th century with the establishment of entities like the Russell Sage Foundation (1907), Carnegie Corporation (1911), and Rockefeller Foundation (1913) were set up with open-ended missions, governed by a self-perpetuating board of trustees, legally and financially structured to last forever, with no public accountability.
This historic model encourages society to celebrate charitable benevolence while ignoring how these fortunes were amassed: through the exploitation of Black, Brown, and working-class labor, tax avoidance, and the concentration of political power in a plutocracy.
Much of the money distributed through mega-gifts is essentially subsidized taxpayer money due to significant tax deductions. Rather than letting public funds address democratically determined priorities, mega-giving allows the ultra-wealthy to direct resources toward personal interests that frequently preserve their own fortunes.
U.S. charitable giving topped $400B for the first time in 2017, more than the gross domestic product of Ireland. According to GivingUSA data, an estimated 53% of all giving is from high-net-worth households, meaning more than half of all giving comes from 10% of households. That’s an increase from 40% just 10 years ago.
As top-tier giving concentrates among a fraction of the population, foundation assets continue to surge, frequently driven by massive family transfers to personal foundations, such as $2B from Mark Zuckerberg and Dr. Priscilla Chan to the Chan Zuckerberg Initiative and $1B from Michael and Susan Dell to the Dell Foundation.
Case Studies: The Patterns of Mega Giving
Tracing major philanthropic efforts over the last century exposes systemic flaws across historical and modern mega-giving:
Andrew Carnegie: Social Control vs. Worker Equity
In 1900, Andrew Carnegie distributed $60M (nearly $2B in today’s dollars), funding a network of 1,689 public libraries nationwide. While celebrated today, Carnegie’s libraries were an insult to communities who were content to fund their own public works. Contemporary workers criticized Carnegie who sought to tame the “unruly lower classes” rather than pay living wages or improve working conditions.
When workers demanded fair pay, Carnegie famously deflected, asserting “If I had raised your wages, you would have spent that money by building a better cut of meat or more drink for your dinner. But what you needed, though you didn’t know it, was my libraries and concert halls.”
John D. Rockefeller & The Billionaire Playbook
John Rockefeller gave away $530,853,632 according to a 1937 article from The New York Times. The vast majority of which went to four foundations established by him: Rockefeller Institute for Medical Research, the Rockefeller Foundation, the Laura Spelman Rockefeller Memorial, and the General Education Board. Significant megagifts included $22M for war work from 1914 to 1919.
When John D. Rockefeller established the $100M Rockefeller Foundation with an open-ended objective to “benefit mankind,” former President Theodore Roosevelt noted: “No amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them.”
Advised to distribute his wealth before its sheer size created backlash, Rockefeller established a playbook inherited directly by modern figures like Bill Gates and Jeff Bezos.
Jeff Bezos: Corporate Exploitation & Greenwashing
While committing $100 million to Feeding America and $10 billion to the Bezos Earth Fund, Jeff Bezos, like the robber barons before him, has systemically harmed Amazon employees. Amazon has faced extensive investigations for shortchanging vulnerable workers on medical or parental leave, enforcing grueling warehouse conditions, and suppressing wage growth. Jeff Bezos’ theory that long-term employees expect raises but are “complacent and lazy” has led to a policy of replacing workers to keep efficiency high and wages low. “After three years on the job, hourly workers no longer received automatic raises, and the company offered bonuses to encourage people to quit. It also offered limited upward mobility for hourly workers, preferring to hire managers from the outside.
It is particularly ironic that Jeff Bezos started a climate fund as Amazon’s carbon footprint is significant. Amazon Web Services (AWS) powers dirty energy infrastructure using renewable energy credits to continue its fossil fuel use. They market cloud services to the oil and gas industry to “accelerate and optimize exploration, drilling, and production,” contradicting their public environmental pledges. While AWS has increased its operations by 59% over the last two years, it hasn’t added any new renewable energy, in direct contradiction to their commitment to utilize 100% renewable energy.
Bill Gates: Privatizing Public Health & Media
Bill Gates’s $50 billion charitable enterprise over the last two decades has been subject to minimal government oversight or public scrutiny. An investigation by The Nation revealed billions in tax-deductible grants flowing to private corporations such as GlaxoSmithKline, Unilever, IBM, and NBC Universal Media. These grants often align with the foundation’s private financial investments or advance corporate interests in the Global South under the banner of charity.
The Gates Foundation made a $19M donation to a Mastercard affiliate in 2014 to “increase usage of digital financial products by poor adults” in Kenya. The credit card company used charitable funds to cultivate new clients from the Global South.
The Gates Foundation “donation” directly benefited their endowment which had substantial financial investments in Mastercard through its holdings in Warren Buffett’s company, Berkshire Hathaway.
Moreover, personal and professional conflicts of interest persist as Bill Gates has long been on Berkshire’s board of directors and Buffett has directly donated to Gates Foundation. Both Bill Gates and the foundation hold billions of dollars of equity stake in Berkshire.
Bill Gates uses his philanthropy to amass political power, allowing an unelected billionaire to shape public policy through charity. While his donations appear to expand vaccine delivery and childhood immunization, in reality, the direct recipients of his charity are the world’s wealthiest organizations and companies who claim to “help the needy.”
James Love, director of Knowledge Ecology International notes “Gates is sort of the right-wing of the public-health movement. He’s always trying to push things in a pro-corporate director. He’s a big defender of the big drug companies. He’s undermining a lot of things that are really necessary to make drugs affordable to people that are really poor. It’s weird because [Gates] gives so much money to [fight] poverty, and yet he’s the biggest obstacle on a lot of reforms.”
Mark Zuckerberg: Top-Down Educational Failure
We rarely hear criticism of failed philanthropic endeavors by billionaires like Mark Zuckerberg. In 2010, Mark Zuckerberg and Dr. Priscilla Chan pledged $100M to reform Newark, NJ public schools through the Foundation for Newark’s Future and with the support of politicians Chris Christie and Cory Booker. Other philanthropists matched Zuckerberg’s $100M bringing the total donation to $200M, which was required to be spent down over five years. At the time, fewer than 40% of students read at grade level and the high school graduation rate hovered at 60%, which is 19% lower than the national average. Of those who graduated, 90% needed to take remedial classes before entering community college.
Despite not completing college nor having the qualifications or work experience in educational reform, Zuckerberg pushed for charter schools based on an understanding of educational reform from his wife’s public-school upbringing partnered with her one year of work with Teach for America.
Rather than investing directly in existing community-led solutions, Zuckerberg suggested Newark close underperforming schools, increase the number of charter schools, and implement a student performance-based pay system for teachers where the best teachers receive bonuses of up to 50% of their salary, an impossible incentive to sustain after the funding ran out. This led to tens of millions being funneled to:
Management consultants who did not fully understand local issues and were unable to devise strategic, community-led solutions ($20M+).
Charter school expansion ($60M+) and buyout contracts for underperforming teachers.
Newark parents and educators were largely excluded in decision-making over their children’s education and destiny. The top-down approach advocated by outsiders and politicians failed to deliver sustainable educational outcomes as it did not address the systemic issues within the already broken school system.
Michael Bloomberg: Philanthropy as Political Leverage
Despite mega giving, Bloomberg remains one of the richest men in the world with more than $50B dollars. Much like Bill Gates, Michael Bloomberg uses his charitable endeavors to gather political power in his quest for the Democratic presidential nomination. While Gates is content to impact public policy from the shadows, Bloomberg used tactical philanthropy to build political capital, quiet potential opposition, and shape institutional agendas.
In advance of his 2020 presidential bid, Bloomberg distributed $3.3B in a single year, nearly five times his previous annual output. What’s more, Bloomberg rose in the presidential primary as experienced public servants ended their campaigns due to lack of funds — including every non-white serious contender for the nomination.
The Double Standard: Micro-Scrutiny of BIPOC Philanthropy
While White male billionaires are routinely praised for top-down, transactional giving, the stories that are not being told are those of Black and Brown philanthropists who are frequently self-made entrepreneurs who reinvest directly into their communities for future generations. These philanthropists face intense public scrutiny and racialized double standards.
Historically and today, leaders of color prioritize community-centered investments:
Madame C.J. Walker was the first Black woman millionaire in the U.S. She donated generously to educational causes and Black charities, funding scholarships for women at Tuskegee Institute and donating to the NAACP, the Black YMCA, and other organizations.
Jimmy Iovine, record executive, and Dr. Dre, hip-hop legend, made a $70M gift to the University of Southern California to establish the USC Academy for Arts, Technology, and the Business of Innovation for undergraduate students whose interests span fields such as marketing, business entrepreneurship, computer science, engineering, audio and visual design, and the arts.
Beyonce has kept most of her philanthropic giving quiet but the Huffington Post reported in 2014 she gave $7M to the Knowles-Temenos Place Apartments in Houston, TX in response to Hurricane Katrina. In 2016, she and Jay Z donated $1.5M to the Black Lives Matter movement and other civil rights organizations. And in 2020, through her BeyGOOD Foundation, she partnered with the NAACP to donate $1M in funds to help Black-owned small businesses during the pandemic.
Robert Smith gave $40M to pay off the student loan debt of Morehouse College’s (HBCU) 2019 graduating class, following his $1.5M gift to the school.
When Oprah Winfrey invested $140M to open and provide continued support for the Oprah Winfrey Leadership Academy, a South African boarding school for teenage girls, critics attacked the school’s perceived “high-quality amenities” (high thread-count sheets for dormitory beds, a beauty salon, an indoor and outdoor theatre, and a yoga classroom) questioning whether under-resourced Black girls “deserved” such surroundings. This paternalistic critique assumes marginalized communities should settle for bare-minimum support and be happy to receive access to basic education, a standard rarely applied to elite institutions funded by billionaire donors.
Oprah continued to receive criticism for not building her school in the U.S., although our country already has a school system where children are guaranteed a free education. What we do not hear about is how, to date, Oprah’s school has graduated more than 750 girls who successfully passed the South African Matrics Level Examinations (the school has a 100% passage rate). Furthermore, the school’s graduates have already gone on to university education and civil service employment.
While the concept of mega giving is inherently problematic, it is not a mistake that the examples of mega giving gone wrong are of women, particularly women of color who prioritize giving to Black, Brown, immigrant, and other non-dominant communities, illustrating how implicit bias seeps into the nonprofit mindset.
Structural Solutions: Reclaiming Accountability in Philanthropy
Fundraisers and sector critics are quick to dismiss mega giving as an unsustainable trend that creates unrealistic expectations for nonprofit staff and boards hoping to land their own transformative mega-gift.
However, this criticism misses a fundamental truth: mega-gifts were never intended for grassroots, social services, or social justice organizations. The vast majority of mega-giving serves as a financial mechanism to multiply ultra-wealthy fortunes while backing large corporations, universities, and institutions that allow donors to shape public policy in their own favor.
It is disheartening to confront the reality that the philanthropic and fundraising systems we navigate every day are fundamentally flawed and deeply entwined with wealth inequality, limited transparency, and a lack of public oversight. While we cannot overhaul these systems overnight, we can begin dismantling the inequities of mega giving and mega philanthropy by advocating for concrete, structural policy reforms:
Progressive Tax Reform & Wealth Caps
Make the ultra-wealthy pay their equal share of taxes back into the public treasury for social safety nets, infrastructure, or medical research. Close structural tax loopholes that allow multibillionaires to enjoy massive tax savings often dodging capital gains tax (20%) and federal estate taxes (40% on fortunes exceeding exemption thresholds).
Cap lifetime deductions and establish a ceiling on the total dollar amount of wealth an individual can shield from state or federal taxation through charitable contributions.
Institute a wealth tax that applies a direct percentage tax on ultra-high-net-worth assets annually to curb dynastic wealth hoarding and redistribute capital to essential public services.
Regulatory Oversight & Governance Standards
Eliminate mission conflicts and self-dealing by prohibiting foundations from holding investments in industries that actively undermine their mission (e.g., private prisons, fossil fuels, arms manufacturing, predatory pharmaceuticals, or companies that rely on child labor).
End self-dealing by prohibiting individuals from making charitable contributions that directly or indirectly benefit them, their business, or industry.
Implement size caps on foundation assets and endowments to prevent permanent capital concentration.
End perpetual foundation lifespans and mandate an independent, non-affiliated public officer to serve on governing boards once assets exceed specific wealth thresholds.
Restricting Corporate Subsidies & Expanding Federal Oversight
Restrict the use of venture philanthropy models to advance deregulatory, public-private partnerships that privatize public goods.
End for-profit tax subsidies. Disallow tax write-offs for charitable contributions routed to for-profit corporations claiming to advance social missions, and ban gifts to groups lobbying for industry-friendly deregulation.
Fund oversight for the Top 1% of foundations. With roughly 100,000 private foundations controlling nearly $1 trillion in assets while paying a nominal tax rate of just 1–2%, public oversight is critically underfunded. We must expand funding for the IRS and state Attorneys General to actively monitor, audit, and regulate private foundation activities and political lobbying.
Reimagining the Future of Giving
Dismantling the inequities of modern philanthropy requires shifting away from billionaire-led directives toward democratic, community-controlled models of care. At Talem Consulting, we partner with movement leaders, foundations, and social impact organizations to build equitable development strategies, shift power dynamics, and foster true institutional accountability. Contact Talem and learn how we can support your organization’s strategy and equity goals.
