Political Philanthropists Beware: Know Your Candidate, Use Business Principles!

CHECK YOUR DONOR BEHAVIOR--Last month I attended the Philanthropy Innovation Summit hosted by the Stanford Center on Philanthropy and Civil Society (PACS). The event kicked off with a discussion between entrepreneurs Reid Hoffman and Peter Thiel moderated by PACS chairman Laura Arrillaga-Andreessen, who urged philanthropists to “invest” rather than spend and to seek “differential impact” when making contributions. 

Next up was a panel including Jeff Raikes, former CEO of the Gates Foundation, who noted that many donors engage in insufficient research and asked “what is it about donor behavior that leads most of them to behave with such little due diligence?” He encouraged philanthropists to adopt “business principles” when doling out contributions. It all made great sense to me.

A week later, a philanthropist friend mentioned his recent meeting with a politician seeking a donation in the hope of becoming the next governor of California. My friend said he liked what the politician had to say and planned to support the candidate. When I asked if the politician’s actions matched the politician’s words, my friend — a highly diligent and successful businessman — said he hadn’t checked. That made no sense to me.

My friend is not alone. Most political philanthropists don’t conduct due diligence. Instead — and unlike the diligent behavior they usually exhibit when making other investments — they base decisions on what politicians say or to please friends hosting fundraising events. This is a serious problem, because few donations have greater impact. Over the four years of the next governor’s term, California will spend more than $1 trillion, including more than $400 billion on public education, and the governor and legislature will consider 20,000 bills relating to the education, criminal, environmental, labor, housing, business and professions codes that affect every worker, employer, student and resident.

With diligence, political philanthropists would learn about the all-too-frequent disconnect between what some candidates say and how they act. For example, they would learn about the state’s highest legal officer who says she’s for high-quality public education but acts to keep low-quality teachers in front of the state’s least-advantaged students. Or the Republican state senator who says he opposes crony capitalism but acts to protect particular industries. Or the Democratic state assemblywoman who says she’s for a robust safety net but acts to cut that net in order to boost spending on a special interest.

Political philanthropists have a moral obligation to be diligent. Their children might not attend public schools but the children of the vast majority of their fellow citizens do, and state legislators and governors write all the rules that govern those schools.

Shouldn’t political donors make sure that recipients of their contributions act to improve teacher quality? Likewise, political donors might not ride public transportation, receive welfare, be affected by tuition increases, run a small business, or seek work in a state in which nearly one-quarter of the population lives under the poverty level, but shouldn’t they make sure their political contributions don’t enable politicians to say one thing about those priorities but do another?

You can be sure that special interests know the actions of every candidate. Until political philanthropists engage in similar diligence, clever candidates will exploit the difference by saying one thing to the un-diligent while acting another way for the diligent.

It’s the political season. Candidates are pressing hard for donations. Political philanthropists should be diligent before responding. The lives and livelihoods of millions of others are at stake.

 

(David Crane is a lecturer at Stanford University and co-founder of Govern For California)  -cw

 

 

CityWatch

Vol 13 Issue 87

Pub: Oct 27, 2015