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Philanthropy: The Easy Way Out

January 12, 2021 (1,742 words)

Many of our prominent civic institutions rely on generous donations of private wealth for a vital part of their funding stream. While the term “philanthropy” can apply to the hundred bucks you throw at the local library or volunteer fire company as a year-end tax deduction, it’s more often used to describe the systematic dispersal of vast fortunes to any number of worthy causes.

Charitable giving on this sort of grand scale to enhance the common good is certainly commendable. However without wanting to look a gift horse in the mouth, it wouldn’t hurt to occasionally ask just how this enormous wealth gets accumulated in the first place. The question is not meant to imply behind every great fortune lies a great crime. Such a brazen accusation would be far too cynical for this, our civilized and enlightened age.

On the other hand, let’s remember there have always been two kinds of crime in this world: Those of commission that take place out in the open and are therefore easy for everyone to spot, and the subtler ones of omission that frequently escape public notice.

If a crime is committed in a respectable enough manner, the questionable origin of the resulting fortune is papered over and soon forgotten.

There is now an understanding that such prickly analysis belongs to a bygone era of overt “sweatshop” exploitation. Some of the oldest and best-known foundations still dispensing their never-ending bounty have a decidedly checkered past. They are the legacy of Robber Barons who outdid each other in their callous treatment of the working classes.

By way of contrast, our most generous contemporary benefactors don’t have that sort of awkward cultural baggage in their portfolios. Today’s philanthropic heroes are not thought of as having climbed over anybody on their way to the top. The general perception is these folks merely built a better mouse trap, and had the world beat a path to their door.

*

This reassuring narrative explains why reasonable people invoke the “no harm, no foul” rule when confronted by the newly rich. For the most part we are not given to probe too deeply into how the current generation of self-made billionaires came by their cash.

In fact, asking too many questions is frowned upon and considered bad form. It leads to the onerous charge of ‘class envy.’ For it is only mediocre people that always seem to ‘find a reason not to be successful’ who end up outwardly jealous of another’s success.

So determined are we to avoid being tarred with the ‘jealousy’ brush that polite society often errs in the opposite direction, by not exhibiting a healthy dose of circumspection when it is warranted.

This can be chalked up to the pride we feel in getting ahead, and the sense we share about the pursuit and accumulation of wealth being an inherently virtuous activity. It follows that those who make it are to be commended, not criticized.

As to the ways and means of modern wealth-creation, we take comfort in knowing the bad old days when an ogre would inflict unspeakable demands on a subservient workforce are long gone. Then again, it’s not as if today’s wage earners live in the land of milk and honey, without a care in the world.

Yesterday’s ogre has merely been replaced by today’s emotionless bureaucrat, who executes the will of the absentee corporate overseer. These bloodless people are far removed from the legion of workers who must conform to a ream of often counter-productive edicts.

It’s not that the bureaucrats and overseers set out to be bad or mean. (Though it’s not outside the realm of possibility that some of them do.) From a logistical standpoint it’s just real hard for a huge organization to maintain a “feel” for the rank-and-file, or to demonstrate a genuine respect for the dignity of all those in its employ.

There are many ways to show respect and honor human dignity, but among the most important is to pay a living wage to those without a leadership role or an ownership stake.

*

Our national character is an interesting blend of practicality and restlessness. The free-wheeling slogan “all’s fair in love and war” suits our spirit well, even though the claim is patently false on both counts. Neither it is remotely true that all is fair when trying to make a buck, by the way. Yet that is the modus operandi we have come to adopt. A brief look at the world of retail, which we all have extensive first-hand experience with, will prove my point.

As one travels around this great country, it’s easy to identify the pockets of prosperity by the plethora of high-end shopping centers that cluster together in our most fertile valleys. Each center is populated by a variety of upscale retailers with nationwide brand recognition and the cache that comes with it.

These beautifully appointed emporiums may not resemble the sweatshops of old, but almost without exception they are staffed by people who have trouble getting forty hours each week, are often forced to work irregular shifts from one week to the next, receive little or no benefits, and are given a wage that makes it difficult to pay the rent, let alone buy a house.

Home Depot does not necessarily qualify as a beautifully appointed emporium, but it is the largest home improvement retailer in the United States, selling tools and construction products. It’s also one of the few stores I happen to frequent. The story of its founding is an inspirational one, as are so many of these stories. Ken Langone (1935-), one of five original partners, was the Wall Street investment banker who helped arrange the financing that launched the franchise. What started modestly in 1979 with two stores in Atlanta has grown to over 2,200 locations in three countries, employing upwards of 400,000 people.

Along the way Mr. Langone has become a philanthropist of the highest order, with his specialty being the Medical Center affiliated with NYU that displays his name.

*

In August 2018 New York University announced the coup de grace: Free tuition for every current and future student at its medical school. Funding these scholarships is projected to require $600 million, and Langone got the ball rolling by kicking in a $100 million donation. This is a magnificent gesture, and sets a fine example for his fellow billionaires to follow.

But Mr. Langone’s generous nature does not make him an expert on what constitutes “equitable distribution” in a free-market economy.

Since the May 2018 publication of his autobiography Ken has made the rounds, and many of those interviews are easy to find on YouTube. He is regarded as something of iconoclastic entrepreneur, because he is still a salt-of-the earth kind of guy, despite his incredible success. I guess being the son of a plumber and working a series of odd jobs to put oneself through school helps keep a person grounded.

His book is enthusiastically titled I Love Capitalism: An American Story, and conveys a classic tale of rags-to-riches that never fails to bring a tear. Though we should point out Mr. Langone’s outsized affection for capitalism is not unique. Literally everyone who achieves a measure of financial security – to say nothing of enormous wealth – will tell you the very same thing.

The real question is, what about those hundreds of thousands of peons trying to grind out a living as a “sales associate” at the local Home Depot. What do they think of capitalism?

*

Contrary to Langone’s entertaining rendition of conventional wisdom, free enterprise as currently practiced is not the key to giving every single one of us a “leg up.” Simply because not everyone is a hungry kid with big dreams, like he was.

If only our captains of industry would come to the realization that even those without big dreams or incredible drive still deserve just compensation for the talents and work ethic they do contribute. Everyone’s dignity should be respected, even if they’re not a go-getter or a lead dog.

Having started at the bottom and scaled the highest summit, Ken Langone has concluded all is right with the world as it is, and philanthropy is the best way for a free society to redistribute the vast wealth movers and shakers create. Pardon me for saying so, Mr. Langone, but that philosophy strikes me as being more than a little self-serving.

Surely we can do a better job distributing free market capitalism’s remarkable winnings to those on the ground floor of our economy, without having to wait for the benevolence of the high and mighty to trickle a few drops down from above.

Look, this “equitable distribution” thing is a tough nut to crack, no doubt about it. The business model of every success story is based on paying the rank-and-file the “going rate,” and nothing more. Messing with that formula in any meaningful way might jeopardize the success of a fledgling enterprise. I get it.

Then again, citing the challenges to potential success should not be allowed to serve as “cover” for perpetuating a stingy compensation policy once success is achieved, and everything is coming up roses. Publicly traded companies that register millions in profit per quarter could certainly afford to raise the wage rates of line workers. Beyond that, let’s see some creativity.

Let’s ask our entrepreneurial class – so proud of their ability to overcome obstacles and pivot when needed – to apply their dazzling business acumen to this subject. Some form of profit-sharing, perhaps? Some measure of employee stock ownership? And while we’re at it, whatever happened to the once standard practice of providing company-paid medical coverage and a pension?

Whatever is done, it needs to make a real impact in the lives of the recipients. It can’t just be another token gesture for PR purposes. The fact that people continue to apply in droves for these crummy jobs is not a sign they agree to the terms of employment. It’s only a measure of their desperation. Successful employers would be making a real contribution to society if they would stop mistaking those two things.

Many of us admire Ken Langone for the street smarts he brought to his high-profile career on Wall Street, and the outsize generosity he has bestowed on his alma mater. But from a big-picture perspective, Mr. Langone’s legacy is just another example of philanthropy being the easy way out.

Robert J. Cavanaugh, Jr
January 12, 2021

Philanthropy: The Easy Way Out

January 12, 2021 (1,742 words)

Many of our prominent civic institutions rely on generous donations of private wealth for a vital part of their funding stream. While the term “philanthropy” can apply to the hundred bucks you throw at the local library or volunteer fire company as a year-end tax deduction, it’s more often used to describe the systematic dispersal of vast fortunes to any number of worthy causes.

Charitable giving on this sort of grand scale to enhance the common good is certainly commendable. However without wanting to look a gift horse in the mouth, it wouldn’t hurt to occasionally ask just how this enormous wealth gets accumulated in the first place. The question is not meant to imply behind every great fortune lies a great crime. Such a brazen accusation would be far too cynical for this, our civilized and enlightened age.

On the other hand, let’s remember there have always been two kinds of crime in this world: Those of commission that take place out in the open and are therefore easy for everyone to spot, and the subtler ones of omission that frequently escape public notice.

If a crime is committed in a respectable enough manner, the questionable origin of the resulting fortune is papered over and soon forgotten.

There is now an understanding that such prickly analysis belongs to a bygone era of overt “sweatshop” exploitation. Some of the oldest and best-known foundations still dispensing their never-ending bounty have a decidedly checkered past. They are the legacy of Robber Barons who outdid each other in their callous treatment of the working classes.

By way of contrast, our most generous contemporary benefactors don’t have that sort of awkward cultural baggage in their portfolios. Today’s philanthropic heroes are not thought of as having climbed over anybody on their way to the top. The general perception is these folks merely built a better mouse trap, and had the world beat a path to their door.

*

This reassuring narrative explains why reasonable people invoke the “no harm, no foul” rule when confronted by the newly rich. For the most part we are not given to probe too deeply into how the current generation of self-made billionaires came by their cash.

In fact, asking too many questions is frowned upon and considered bad form. It leads to the onerous charge of ‘class envy.’ For it is only mediocre people that always seem to ‘find a reason not to be successful’ who end up outwardly jealous of another’s success.

So determined are we to avoid being tarred with the ‘jealousy’ brush that polite society often errs in the opposite direction, by not exhibiting a healthy dose of circumspection when it is warranted.

This can be chalked up to the pride we feel in getting ahead, and the sense we share about the pursuit and accumulation of wealth being an inherently virtuous activity. It follows that those who make it are to be commended, not criticized.

As to the ways and means of modern wealth-creation, we take comfort in knowing the bad old days when an ogre would inflict unspeakable demands on a subservient workforce are long gone. Then again, it’s not as if today’s wage earners live in the land of milk and honey, without a care in the world.

Yesterday’s ogre has merely been replaced by today’s emotionless bureaucrat, who executes the will of the absentee corporate overseer. These bloodless people are far removed from the legion of workers who must conform to a ream of often counter-productive edicts.

It’s not that the bureaucrats and overseers set out to be bad or mean. (Though it’s not outside the realm of possibility that some of them do.) From a logistical standpoint it’s just real hard for a huge organization to maintain a “feel” for the rank-and-file, or to demonstrate a genuine respect for the dignity of all those in its employ.

There are many ways to show respect and honor human dignity, but among the most important is to pay a living wage to those without a leadership role or an ownership stake.

*

Our national character is an interesting blend of practicality and restlessness. The free-wheeling slogan “all’s fair in love and war” suits our spirit well, even though the claim is patently false on both counts. Neither it is remotely true that all is fair when trying to make a buck, by the way. Yet that is the modus operandi we have come to adopt. A brief look at the world of retail, which we all have extensive first-hand experience with, will prove my point.

As one travels around this great country, it’s easy to identify the pockets of prosperity by the plethora of high-end shopping centers that cluster together in our most fertile valleys. Each center is populated by a variety of upscale retailers with nationwide brand recognition and the cache that comes with it.

These beautifully appointed emporiums may not resemble the sweatshops of old, but almost without exception they are staffed by people who have trouble getting forty hours each week, are often forced to work irregular shifts from one week to the next, receive little or no benefits, and are given a wage that makes it difficult to pay the rent, let alone buy a house.

Home Depot does not necessarily qualify as a beautifully appointed emporium, but it is the largest home improvement retailer in the United States, selling tools and construction products. It’s also one of the few stores I happen to frequent. The story of its founding is an inspirational one, as are so many of these stories. Ken Langone (1935-), one of five original partners, was the Wall Street investment banker who helped arrange the financing that launched the franchise. What started modestly in 1979 with two stores in Atlanta has grown to over 2,200 locations in three countries, employing upwards of 400,000 people.

Along the way Mr. Langone has become a philanthropist of the highest order, with his specialty being the Medical Center affiliated with NYU that displays his name.

*

In August 2018 New York University announced the coup de grace: Free tuition for every current and future student at its medical school. Funding these scholarships is projected to require $600 million, and Langone got the ball rolling by kicking in a $100 million donation. This is a magnificent gesture, and sets a fine example for his fellow billionaires to follow.

But Mr. Langone’s generous nature does not make him an expert on what constitutes “equitable distribution” in a free-market economy.

Since the May 2018 publication of his autobiography Ken has made the rounds, and many of those interviews are easy to find on YouTube. He is regarded as something of iconoclastic entrepreneur, because he is still a salt-of-the earth kind of guy, despite his incredible success. I guess being the son of a plumber and working a series of odd jobs to put oneself through school helps keep a person grounded.

His book is enthusiastically titled I Love Capitalism: An American Story, and conveys a classic tale of rags-to-riches that never fails to bring a tear. Though we should point out Mr. Langone’s outsized affection for capitalism is not unique. Literally everyone who achieves a measure of financial security – to say nothing of enormous wealth – will tell you the very same thing.

The real question is, what about those hundreds of thousands of peons trying to grind out a living as a “sales associate” at the local Home Depot. What do they think of capitalism?

*

Contrary to Langone’s entertaining rendition of conventional wisdom, free enterprise as currently practiced is not the key to giving every single one of us a “leg up.” Simply because not everyone is a hungry kid with big dreams, like he was.

If only our captains of industry would come to the realization that even those without big dreams or incredible drive still deserve just compensation for the talents and work ethic they do contribute. Everyone’s dignity should be respected, even if they’re not a go-getter or a lead dog.

Having started at the bottom and scaled the highest summit, Ken Langone has concluded all is right with the world as it is, and philanthropy is the best way for a free society to redistribute the vast wealth movers and shakers create. Pardon me for saying so, Mr. Langone, but that philosophy strikes me as being more than a little self-serving.

Surely we can do a better job distributing free market capitalism’s remarkable winnings to those on the ground floor of our economy, without having to wait for the benevolence of the high and mighty to trickle a few drops down from above.

Look, this “equitable distribution” thing is a tough nut to crack, no doubt about it. The business model of every success story is based on paying the rank-and-file the “going rate,” and nothing more. Messing with that formula in any meaningful way might jeopardize the success of a fledgling enterprise. I get it.

Then again, citing the challenges to potential success should not be allowed to serve as “cover” for perpetuating a stingy compensation policy once success is achieved, and everything is coming up roses. Publicly traded companies that register millions in profit per quarter could certainly afford to raise the wage rates of line workers. Beyond that, let’s see some creativity.

Let’s ask our entrepreneurial class – so proud of their ability to overcome obstacles and pivot when needed – to apply their dazzling business acumen to this subject. Some form of profit-sharing, perhaps? Some measure of employee stock ownership? And while we’re at it, whatever happened to the once standard practice of providing company-paid medical coverage and a pension?

Whatever is done, it needs to make a real impact in the lives of the recipients. It can’t just be another token gesture for PR purposes. The fact that people continue to apply in droves for these crummy jobs is not a sign they agree to the terms of employment. It’s only a measure of their desperation. Successful employers would be making a real contribution to society if they would stop mistaking those two things.

Many of us admire Ken Lagone for the street smarts he brought to his high-profile career on Wall Street, and the outsize generosity he has bestowed on his alma mater. But from a big-picture perspective, Mr. Langone’s legacy is just another example of philanthropy being the easy way out.

Robert J. Cavanaugh, Jr
January 12, 2021

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