You can’t talk about philanthropy without mentioning Darren Walker. As the president of the Ford Foundation, Walker has been charged with reimagining one of the largest philanthropic endowments in the world. This week he joins Nick and Jessyn in a conversation about transforming philanthropy to meet the challenges of structural inequality.

Darren Walker is president of the Ford Foundation. He chaired the philanthropy committee that brought a resolution to the city of Detroit’s historic bankruptcy and is co-founder and chair of the US Impact Investing Alliance. Before joining Ford, Darren was vice president at the Rockefeller Foundation.

Twitter: @darrenwalker

@FordFoundation

Further reading:

From Generosity to Justice: https://www.fordfoundation.org/ideas/ford-forum/the-future-of-philanthropy/from-generosity-to-justice/

Website: http://pitchforkeconomics.com/

Twitter: @PitchforkEcon

Instagram: @pitchforkeconomics

Nick’s twitter: @NickHanauer

 

Nick:

Is this Darren Walker?

Darren:

Is this Nick Hanauer?

Nick:

How are you buddy?

Darren:

The Radical capitalist?

Nick:

Moving from generosity to justice means going from using a little bit of philanthropy to take the hard edges off the problems of structural racism and inequality.

Darren:

Philanthropy is a product itself of economic injustice.

Nick:

Yeah.

Jessyn:

If we really want to change neo-liberalism, we also have to really change philanthropy.

Nick:

Yeah.

Speaker 4:

From the offices of Civic Ventures in downtown Seattle, this is Pitchfork economics with Nick Hanauer, an honest conversation about how to make capitalism work for everyone.

Nick:

I’m Nick Hanauer, founder of Civic Ventures.

Jessyn:

I’m Jessyn Farrell, and I’m senior vice president at Civic Ventures and a former state legislator.

Nick:

So Jessyn, today we get to talk to our friend Darren Walker, which is a real privilege. Darren is the President of the Ford foundation, which obviously is a very consequential global foundation with 13 billion in assets and 600 million in annual grant making, but Darren is a remarkable force in global philanthropy. He’s a fellow at the Institute of Urban Design, a member of the council on foreign relations, a board member of the Arcus foundation, Rockefeller philanthropy advisors, friends of the Highline, et cetera, et cetera, et cetera.

Nick:

He’s the director at Pepsi Co, but today he’s also the author of a really cool new book called, From Generosity to Justice, a new gospel of wealth.

Jessyn:

And this book really comes out of a letter that he wrote, from the Ford foundation to his fellow philanthropists, really creating this challenge around how is philanthropy going to transform in the face of these major disruptions caused by income inequality and structural racism? And what is going to be a future role of philanthropy if its current role is what it is now?

Nick:

Yeah. And what’s really interesting about the argument that Darren makes in his book is how similar the argument is that we’re making about neo-liberalism. I mean basically, he’ll talk about it more, but moving from generosity to justice means going from, using a little bit of philanthropy to take the hard edges off the problems of structural racism and inequality to actually building a society without those things and maybe having a little less philanthropy, which is sort of the whole point of tearing down neo-liberalism. And anyway, it’ll be super fun to talk to him and have him unpack his ideas and describe how the world used to think about and how it should in the future.

Jessyn:

Right. And I think he’ll get a chance to talk through how philanthropy and neo-liberalism are really tightly intertwined. That neo-liberalism almost needs philanthropy to take off the hard edges of the inevitable income inequality that results and that the founders of modern philanthropy saw it that way.

Nick:

Exactly. Should be interesting.

Darren:

I’m Darren Walker, president of the Ford foundation.

Nick:

And today, we get to talk to you about your new book, From Generosity to Justice. And I’m super excited to talk to you about it because I’ve been reflecting on the argument that you make and it’s such an important and profound argument and there’s so much consilience between the argument you’re making about philanthropy, global philanthropy and the argument that we’re making more broadly about neo-liberalism. But I’d love to start with you just sort of unpacking the basic premise of the book, From Generosity to Justice.

Darren:

The book is rooted in Andrew Carnegie’s 1889 seminal essay called the gospel of wealth, which outlined a set of principles by which philanthropists were instructed, guided to do their work of philanthropy in America. And the idea was based on charity, on generosity, on this notion of root causes. And it was radical for its time. The notion that everyone should be literate, that America would be lifted up by a more knowledgeable populace was something that was not universally held as a value.

Darren:

And so, Carnegie really did inform an entire generation of philanthropists from Rockefeller to Morgan and beyond. The notion of inequality, however, was not an issue for Carnegie. In fact, Carnegie said inequality was a symptom of a healthy capitalist marketplace. And the question for men like him was what could they do with their wealth to ameliorate the inequality, the injustice in society?

Darren:

And so, it was a different idea. An idea that really accepted the sort of hierarchy that put men like him at the top and left vulnerable people, historically marginalized people, African Americans, new immigrants, at the bottom of the society. And the question for him was, what could men like him do to help the situation through charitable objectives, through [inaudible 00:06:16] giving and that sort of thing?

Jessyn:

You made this really interesting comment that inequality was viewed at that time as a symptom of a healthy capitalist society and a healthy marketplace. And that philanthropy therefore, charitable giving, it almost seems like would be not just an act of virtue, but that the philanthropists themselves are then heroes and kind of the core actors. What is wrong with that and why isn’t that working now in terms of alleviating income inequality and changing systems?

Darren:

Well, I believe that Carnegie and Rockefeller wrote extensively about the root causes of the problems they identified, but they articulated a framework for root causes that was far too narrow for today. They did not, for example, consider racism, sexism, prejudice, bias as a problem per se, and certainly as a problem to address through philanthropy.

Darren:

And I believe that today, because democracy has made possible the inclusion of more people, research and knowledge building has given us an understanding of what the real root causes of much of our challenges around poverty and inequality are. And those root causes are not individual choices or are not independent of other challenges. So, what I mean is the core issues of racism, the kind of [inaudible 00:08:05] of white supremacy are notions of hierarchy and normalizing these ideas have become through real, I believe, knowledge and evidence debunked as the real reasons.

Darren:

I mean, the real reasons are because we have excluded people from systems and structures that provide mobility and opportunity and more equality and more justice, that those very systems in our society have been designed in a way that produce more inequality, not less. That produce more unfairness, not less.

Darren:

For example, if you were to take our education system of public schools, because most of the public schools attended by black and brown students have less funding, have less resources, receive less attention, those schools are often lower performing schools because the students who attend those schools are poorer or more likely to be in poverty. Doesn’t surprise me, therefore, that those schools are low performing schools. It shouldn’t surprise us that our criminal justice system houses more black and brown men and women and more poor white people, because we’ve designed the system to deliver that outcome. And so, Carnegie did not think about the problems of society in this kind of systems thinking way.

Nick:

And so, what does it mean to go from generosity to justice?

Darren:

The transition from generosity to justice requires first a reflection on something I believe that was among the most profound things ever said in the 20th century about philanthropy. The words of Dr. Martin Luther King in 1968 when he said about philanthropy the following: “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstance of economic injustice, which makes philanthropy necessary.”

Darren:

And what he was saying was actually, philanthropy is a product itself of economic injustice. That the economic inequality that exists in this country that produces wealth at the cost of a more egalitarian, more equal society is itself a problem. And philanthropists should be examining the economic systems that produce so much economic injustice in the first place.

Nick:

Right.

Darren:

And so, what I believe, moving from this idea of generosity to the idea of justice requires the philanthropists to get uncomfortable. It requires the philanthropists to engage in an analysis of the structural barriers to mobility to opportunity, that prevents people from living with dignity. That prevents people from having a living wage or live in neighborhoods that are not segregated.

Nick:

Absolutely. We’re talking about the structures that create the problems rather than taking the hard edges off the problems with a little bit of generosity at the end. This is the big issue of our time and as I reflected on your book, Darren, I was just so struck by how consilient this argument is with our sort of shared attack on the broader meaning system that is neo-liberalism.

Darren:

Yes.

Nick:

Right? Because neo-liberalism teaches that the existing… All of the attendants of neoliberalism, homo economicus, price equals value, the principle of marginal productivity, Pareto equilibrium systems. All of these systems teach us that the existing arrangement is economically efficient, morally just, and anything we do to change it will harm the welfare of all. And therefore, the most that we can do is use philanthropy or generosity to take the hardest edges off these outcomes.

Nick:

The minimum wage being the canonical example of that, right? The argument goes that any intervention into the current arrangements will kill jobs and harm everyone. And therefore, at most, we should raise the minimum wage by a few cents to take the hardest edges off poverty. And what’s so interesting to me is how embedded the sort of Orthodox theory of philanthropy is in the broader neo-liberal meaning system. And the trick I think that’s so important that you’re leading this fight is to tear down that meaning system and get people to recognize that we wouldn’t have to have so much philanthropy if people were paid adequately. Right?

Darren:

We wouldn’t need to have… I, for example, was recently visited by a governor of a state who wanted to talk about a philanthropic program, but in the context of that, spoke about the growth of the number of people who would need access to this program because the number of people who are now employed, who need this philanthropic supplement to have a decent life.

Nick:

Right.

Darren:

Even though they’re working full time, they still must rely on charity to put a roof over their head. To buy the basic staples for a household. And that to me, is the failure of neo-liberalism that has to be addressed.

Nick:

Right. And the thing, just going back to your schools example, is you need appeal a further layer of the onion, or I’m mixing metaphors now, but it’s not just that we spend less in schools that serve people of color, it’s that we pay the people in those communities so poorly that there isn’t the tax basis or the economic security that makes it likely or possible to create the schools that kids need. Right?

Nick:

It’s not just that we should spend more on the schools, of course we should, but the way to fix it isn’t just a put a little bit more money in the schools or open a charter school. The way to fix it is to pay the folks in those communities enough to lead secure, stable, and dignified lives. And when you do, new schools will emerge automatically.

Darren:

Yeah.

Nick:

Right? And then you don’t need the charter schools or whatever it was. You don’t need the whatever foundation it is to jump in and try to, again, take the hard edges off of a structural problem.

Darren:

Yep.

Jessyn:

How do you as, at the helm of a large and deeply significant philanthropy, start to unwind these systems? How do you then, when a governor comes to promote a program, how are you then shifting your thinking about giving or the systems that you’re investing in, in a way that then really is unwinding structural racism in America or unwinding the deep sexism that exists and still exist in American capitalism? How do you think about that and how do you actually implement this structural change?

Darren:

I think what we can do in philanthropy is to contribute to the knowledge and evidence to inform and change the narrative. It is critically important that the narrative that philanthropy is better at doing things than government. The narrative that self-reliance is all that is needed and that the system is just fine and that this is more about defective people than it is about defective structures and systems.

Darren:

And I think what philanthropy can do is invest in those narratives that lift up the reality of the way average working Americans live their lives and those who are vulnerable and marginalized and may not be able to work, may not be able to function because they have some kind of serious challenge. How do we not otherize those people in a way that makes them the sort of antagonist in our story? And so, that’s what I think the work of philanthropy is.

Nick:

Surely there’s more. I mean, philanthropy can help communities build power, right?

Darren:

Philanthropies can help communities. Philanthropy can support the authentic and organic organizing of communities to articulate their own priorities. Philanthropy can elevate the voice of people who are most harmed by the system. Philanthropy can invest in the idea, the institution and the people who are closest to the problem and resource them to be able to fully realize their aspiration. I mean, that’s what philanthropy can do.

Jessyn:

You hit on this issue of philanthropy and government often being framed as in competition for who is better suited to solve a social problem. And of course, one of the main tenants of neo-liberalism is that government intervention is somehow harmful. And so, what we’ve seen then is this receding of a robust government presence in things like the housing crisis and housing supports for people in support for higher ed. Higher education has gotten increasingly more expensive. So, if it isn’t a competition between government and philanthropy, what is it?

Darren:

Well, I think that unfortunately there’s been a concerted effort to discredit government and to demonize government and people who work in government. I actually believe that it is a noble calling to be a public servant, a civil service. And I think that we have degraded the idea of public service of government and that has harmed us all. While at the same time, we have mythologized this idea of what the [inaudible 00:20:20] sector and philanthropy can do when we know that without policy change and without support and intervention by government, it is hard to achieve anything and sustain it at scale.

Nick:

Yeah, for sure.

Darren:

And so, I think if we truly care about that, then we have to care about government and having a robust and vibrant government.

Nick:

Yeah. I think one of the main projects of neo-liberalism was eliminating countervailing power, right? For the people who led this charge, for the good folks at the American enterprise Institute and heritage foundation and other places. At the end of the day, all economics is is a way human beings rationalize who gets what and why?

Nick:

It instantiates our social and moral preferences about status, privileges and power. And in the neo-liberal world order, the only people who have power are rich, white men running big companies essentially. And by toxifying the role of government, you increase the status of the people who already have status and increase the power. It’s been a relentlessly effective strategy, but it has immeasurably harmed the country and most of the people in it and it’s going to be a long project to fix it.

Darren:

That is our work. Our work is to…

Nick:

That is our work.

Darren:

I mean, I think I believe that the work of philanthropy is also to be in the business of hope. That is what we do.

Nick:

Yeah.

Darren:

We invest in hope and dreams and aspiration, and we invest in ideas that might be marginal when we first hear about them, but with the support of philanthropy and rooted in the work of people in communities and people most affected, are moved to the mainstream from the margin.

Nick:

So Darren, here’s a question conundrum for you. You and I both care a lot about justice and democracy, but I am often pressed when I talk about these things by folks who say, for as much as you talk about these things, it’s pretty clear that you’re a person with immense wealth and power and you kind of throw your weight around in a very undemocratic way and you’re not accountable to anyone.

Nick:

And I think, to a certain extent, the same could be said of you being the head of the Ford foundation. I mean, I do have an answer, which is that if you look at the arc of my work, all of it is aimed at affirmatively decreasing the power of people like me. But it does make me squirm and shift around in my seat a little bit. How about you?

Darren:

Well, it doesn’t make me squirm. I think about the kinds of organizations we support and towards what end, and when I do that, I’m actually comfortable that while we are absolutely a wealthy institution, while we are a privileged institution, many of the things we are advocating for might put at risk and should put at risk some of that wealth and some of that privilege.

Nick:

Yeah.

Darren:

Because I believe that we need less privilege and less power. I think more power needs to be vested in communities and in the aspirations of people who have historically been left out and left behind.

Nick:

Right.

Darren:

And I don’t believe it’s patronizing for institutions like the Ford foundation to believe that and invest in a way. Now, that doesn’t mean that we don’t recognize our own privilege. We have a very nice office here in the middle of New York City. I recognize that there are privileges, but I’m actually reasonably comfortable that we are doing our best to address these fundamental issues that are among the most difficult of our time and for those of us of privilege, one of the things privilege buys is insulation from dealing with the problems of everyday average Americans.

Darren:

And it’s one of the reasons when parents talk about how hard they work so that I could buy my kid the privilege of not having to worry about the things that I had to worry about when I was growing up or the privilege of having access to the best school, that privilege that you’re buying is insulation. Inoculation. And what I’m saying is we’ve got a little too much insulation and inoculation in this country and that if we are to realize our aspirations and our ideals, we are going to have to address the power imbalance that exists, even if that means giving up some of the power that has been amassed.

Nick:

Yeah, for sure.

Jessyn:

You referred to one of the narratives that really needs to be changed around the myth of bootstrapping and that our own self-reliance kind of begets our success. And you have a personal story I think that in part affirms that, but in part, there were probably a lot of barriers that you faced. Tell us a little bit about your personal story and how that relates to why you do this work now.

Darren:

Well, my story is a story of certainly overcoming difficulty. The challenge of poverty and race, growing up in small Texas town, being born in a very poor community in rural Louisiana. There’s no doubt that I experienced hardship. But what I will also say is that I experienced enormous generosity. And I lived at a time when little boys like me felt that our country was cheering us on. The time in America when the country clearly declared that it was committed to ending poverty, to addressing some of these root causes, to making it possible for kids like me to believe. And I always knew that my country was cheering me on.

Darren:

And today, I wonder if poor boys and girls in rural towns like Ames, Texas or in housing projects in East New York believe that their country is cheering them on. I had private philanthropy, I had Pell grants, I had all sorts of public goods, public education, good public library that was all made possible for me. And I just today am concerned that we don’t seem to be giving that message to young people who are increasingly marginalized and incarcerated and ensnared in systems and structures that doom them to failure. I believe that I have to go to a meeting they’re signaling me here.

Nick:

Yes you do.

Darren:

I’m sorry. I hope this is helpful.

Nick:

It’s [crosstalk 00:28:43] absolutely fantastic.

Jessyn:

You were wonderful. Thank you. So great. [crosstalk 00:28:46].

Darren:

Oh, Thank you.

Nick:

Thank you Darren.

Darren:

Thank you. I’m happy to do it. Listen, you guys take care.

Nick:

Okay.

Jessyn:

You too. Thanks so much. Have a great day.

Nick:

Bye bye.

Darren:

You too. Bye.

Jessyn:

So we just had a great conversation with Darren Walker and he really talked about the history of philanthropy and how the robber barons of old really invented this modern philanthropy that [crosstalk 00:29:15] we’ve witnessed in the 20th century.

Nick:

Yeah, the Ford foundation being a beneficiary of it. And the Rockefeller foundation. [crosstalk 00:29:20].

Jessyn:

Carnegie, all the big names that we’ve ever heard of, right? And so, the idea was that you had this new kind of economic system, this American capitalism that opened up these massive [crosstalk 00:29:34] exactly. Focused [crosstalk 00:29:36] all of the orthodoxies that we now talk about. And of course the quote unquote inevitability of these systems and the massive income inequality that opened up in the end of the 19th century and the beginning of the 20th century. And that philanthropy came this way for capitalists to have their cake and eat it too.

Nick:

A little bit, yeah.

Jessyn:

They could benefit from all of this wealth that they were able to amass through these new systems and then not feel so bad about it because they were able to be generous and to contribute to their community in that way.

Nick:

Yeah. One of the things that struck me during this conversation that we didn’t get to with Darren, it’s often been said that Americans are so generous, right? That our philanthropy in the United States is so big. And how other countries like the Swedes and the French and all these other places, they’re not philanthropic. I’d always sort of processed that and I didn’t really know what to make of it. But the more you think about it, the more clear it becomes that the reason we’re so philanthropic is because we have built an economic system and a meaning system that concentrates wealth at the top, that makes generosity both sort of practically necessary, but also morally necessary. That if you live in a society, which is this palpably unequal, where the outcomes are so obviously unequal, the only way you can kind of make it all work is with a lot of philanthropy.

Jessyn:

That’s right.

Nick:

And they don’t have a lot of philanthropy in Norway because you don’t need a lot of philanthropy in Norway. [crosstalk 00:31:14] Everybody’s fine. We should look up the statistics, but I’m sure in places like Finland, people are not that philanthropic, why would you be?

Jessyn:

Right.

Nick:

Everybody’s fine.

Jessyn:

Right. Exactly. And I think the reason, and this came out in our conversation with him is that, it is because in this country we’ve almost pitted philanthropy against government, but that makes a ton of sense. If you look at philanthropy through a neo-liberalist lens, which is that government gets in the way.

Nick:

Yes.

Jessyn:

So of course then we’re going to be biased and create systems that have biases towards the provision of social goods through philanthropy instead of through these more common communal systems. Self-government.

Nick:

Yeah. And one of the things I so often hear from my peers is how much better they are at spending the money than government. This is the ultimately neo-liberal thing to say.

Jessyn:

Right.

Nick:

Which is again, coming back to what you said, is that I want to have my cake and eat it too. I want to operate in a structure where it concentrates enormous amounts of wealth at the top and then, also get to take the hard edges off it. If you look at the numbers, rich people actually aren’t very philanthropic. I mean, really.

Jessyn:

But you get a tax incentive to do it right?

Nick:

Yeah. And at the end of the day, again, have your cake and eat it too. And the truth is that in fact the government does know how to spend the money better. And if we had a tax system which more fairly burdened wealthy people and a wealth tax that kept enormous amounts of wealth down and all businesses were required to pay their workers enough to get by without either philanthropy or the government’s equivalent of philanthropy, which is food stamps and rent assistance and all the other [crosstalk 00:00:33:00]

Jessyn:

Propping up corporations that are not paying their people enough.

Nick:

Exactly. Then, none of this stuff would be necessary.

Jessyn:

Right.

Nick:

Right? Then indefinitely the rich would be not as rich. But it is all part of the same meaning system and it was really interesting to explore the ways in which philanthropy is an essential part of the neo-liberal meaning system.

Jessyn:

Right.

Nick:

Why it props the whole damn thing up when you think about it.

Jessyn:

Yeah. It makes it politically palatable and morally palatable- [crosstalk 00:33:30]

Nick:

And socially palatable.

Jessyn:

… for the people who constantly are the beneficiaries of massive concentration of wealth.

Nick:

Exactly. And this is why probably we don’t have revolutions, is that all the rich people get to stand up and say, “Well, we’re giving away all this money. We’re good people too. Look how generous we are.”

Jessyn:

Right? And this is where Darren’s contribution to this conversation is so important because what he’s getting at then is that philanthropy has to fundamentally transform so that it is actively unwinding these systems of structural racism and sexism and income inequality and the things that are really the root causes of these problems. The moral of this story is that philanthropy is deeply embedded in our system of neo-liberalism. And if we really want to change neo-liberalism, we also have to really change philanthropy.

Nick:

Yeah. And the implications for philanthropy are really, really huge. That philanthropy needs to move from generosity to justice, that the focus of philanthropy should be much less on taking the hard edges off the privations of neo-liberalism, the structural racism, the structural sexism, the inequality, and more focused on rearranging the society so we just don’t have as much of that. And in so doing, both decreasing the amount of money available for fund three in the necessity of it too. In the best of all possible worlds, philanthropy would be a very, very small thing.

Jessyn:

Because power and wealth had been fundamentally rearranged.

Nick:

Yeah.

Jessyn:

And when we get there, that’s what we’re looking for.

Nick:

People didn’t need that much philanthropy. I mean, it will never disappear because good people want to do nice things for other people and that should be encouraged. But we definitely don’t want to live in a society where almost everyone needs a handout.

Jessyn:

Or where we’re relying on private philanthropy to solve communal problems.

Nick:

Correct. So in the next episode of Pitchfork economics, we’re actually going to address a listener question about the future of labor standards. That is to say, after you do portable benefits and some other things, what comes after? And we have, I think, some really cool and exciting answers because some smart people have been hard at work and figuring that out.

Speaker 5:

Pitchfork economics is produced by Civic Ventures. The magic happens in Seattle in partnership with the young Turks network. If you like the show, make sure to subscribe, rate, and review us wherever you get your podcasts. Find us on Twitter and Facebook at Civic Action and Nick Hanauer. Follow our writing on Medium at Civic Skunk Works and peek behind the podcast scenes on Instagram at Pitchfork economics. As always, from our team at Civic Ventures, thanks for listening. See you next week.