Political scientist Rob Reich shows Miami students that philanthropy isn't always what it seems

Written by Jack Schmelzinger, CAS communications intern

Rob Reich, a professor of political science at Stanford University and the author of Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better, spoke to Miami University students virtually October 19 about philanthropy and how it could better serve the public.

Reich opened his talk by explaining his path to becoming interested in philanthropy. He then went on to talk about the tax breaks that wealthy people receive for making charitable donations, including to colleges like Miami and Stanford.

He told a story about Phil Knight, the founder of Nike. In 2016, Knight gave Stanford University $400 million to create a new scholarship, which was supposed to be similar to the Rhodes Scholarship. By donating, he saved between $30 and $40 million on his taxes.

Reich brought up a thought experiment that he read about in an article in which the writer opined.

“And so the question this writer asked is, what do you think is going to be more important for the world to make it a better place,” Reich said. “$300 million to Stanford to create a set of Rhodes-like scholarships for people who are already probably on a rocket ship trajectory to success, or $30 or $40 million to the Treasury distributed in the ordinary broken ineffective way that the Congress distributes money. The writer of this article said, I'll put my money on the 30 or $40 million into the US Treasury.”

He also talked about how the wealthy exercise power and influence over society for donations. An example is Bill Gates, who donates millions to public education in America.

“Bill Gates is the nation’s unelected superintendent,” Reich said.

He talked about how it is cheaper for the wealthy to donate. Since the wealthy pay a higher percentage of their income in taxes, each donation is more worthwhile for them. This also means that each donation a wealthy person makes takes more away from the United States’ tax revenue.

Engaging with the audience

After giving some more information on philanthropy in the United States, Reich opened up the lecture for questions.

One came from senior Speech Pathology and Audiology major Sasha Fennimore asked, “What is the purpose of tax breaks, other than to save rich people money?

“The purpose of tax breaks, from a standpoint of Congress or a theory of democracy, is to give incentives to certain kinds of behavior, and then in the form of taxation disincentives for certain kinds of behavior,” Reich answered.

Jacqueline Daugherty, the acting director of the Western Center for Social Impact and Innovation, found the lecture insightful, and she said that it fit well with her class’s curriculum.

“My service learning class's work has been all about exploring the nonprofit/philanthropy ecosystem and how it fits into different theories of social change,” Daugherty said. “Rob Reich's critique of traditional US philanthropy—and his commitment to working with philanthropists to improve it—pushes us to reimagine how foundations can and should be more responsive to community needs.”

Logan Iams, a sophomore Individualized Studies major, said that he learned more about how wealthy people gain from making charitable donations.

“I enjoyed the insight Rob brought in about the way donations work and how the rich use charities and donations to become richer,” Iams said.