“Power concedes nothing without a demand. It never did and it never will.” — Frederick Douglass

There was once a time in American history when billionaires and philanthropic institutions were pilloried, not celebrated.

When the titans of their day, Andrew Carnegie and John D. Rockefeller, sought to set up trusts to spend some of their vast wealth for charitable purposes, they were criticized for having endowments that surpassed what the federal government, in the pre-New Deal era, spent on education and public health. Progressives at the time called for the “democratization of private benevolence” through more progressive taxation.

Following the Second World War, U.S. foundations were publicly derided for doing too little given their tax-exempt status and there was widespread opposition to their lack of accountability and general opaqueness. By 1965, government opposition to foundations was so great that the U.S. Treasury requested that Congress limit their powers through a series of regulations and tax laws intended to increase and uphold accountability.

To help broker a compromise between the U.S. government and foundations, the Commission on Foundations and Private Philanthropy, better known as the “Peterson Commission,” was established to shape the Tax Reform Bill of 1969, resulting in the 5 percent payout of investment earnings foundations are required to spend annually.

Nearly 50 years after the Peterson Commission disbanded, foundations and philanthropists maintain disproportionate influence and power in public life. In numerous ways, private philanthropy has stepped into the leadership and financial void left by government, helping to avert disaster.

In their book Philanthrocapitalism — originally subtitled How the Rich Can Save the World — Matthew Bishop and Michael Green describe multibillionaire philanthropists such as Bill Gates as “individuals who can do what it would otherwise take a social movement to do.”

Philanthrocapitalism is the consequence of a decades long growth in extreme wealth inequality. In truth, while the outsized influence of institutional philanthropy and the rich has skyrocketed alongside an explosion in concentrated wealth — concurrent with the decline of our public sector — we have routinely turned to the wealthy and powerful to solve big problems. At best, this approach to philanthropy leaves underlying systemic and structural causes to societal ills unaddressed, and at worst exacerbates them.

Philanthrocapitalists often use their success in business as their qualification to do effective philanthropy. But solving an intractable social problem or eliminating an injustice is a bit more complex than building a business, even a multi-billion enterprise.

After all, there are 2,043 billionaires in the world — How many of them have solved systemic challenges like anti-black racism or homelessness?

The mere assertion that philanthropy can displace social movements is deeply problematic. Social movements are democratic and forged by grassroots leadership — the opposite of philanthropy. Formal philanthropy — intentional or not — is an exercise in privilege, wealth, and entrenched power.