A 'Flip' Chat With...David Callahan, Co-Founder, Demos

(This is the thirteenth in our series of conversations with thought leaders in the nonprofit and philanthropic sectors. You can check out other videos in the series here, including our previous chat, with Foundation Center president Brad Smith.)

On a snowy January morning, a dozen people convened at the offices of Philanthropy New York to discuss David Callahan's new book, Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America. During the discussion, the Demos co-founder and senior fellow explored a number of topics covered in the book, including the westward shift of wealth creation as the United States has transitioned from a manufacturing- to a knowledge-based economy. Callahan -- who in 2000 co-founded Demos, a public policy think tank dedicated to pursuing a more equitable economy and vibrant, inclusive democracy -- is the author of several books, most recently The Cheating Culture (2004) and The Moral Center (2007).

Fortunes of Change centers around the shifting demographics of the ultra-wealthy in the United States. As the number of tech billionaires and computer-savvy financiers on the Forbes 400 list continues to grow, the "typical" billionaire, says Callahan, is both more educated -- and more liberal -- than ever before. What's more, because many of the new billionaires have come into wealth at a young age, a growing number are adopting a "giving while living" approach to philanthropy. This, in turn, is having an enormous impact on the amount of money flowing into American politics generally and "liberal" causes more specifically. Indeed, during the 2008 election, "Obama...raised more money than McCain in eight of the ten wealthiest zip codes in the United States and...outraised him in any number of industries, including hedge funds, venture capital, private equity, corporate law, investment banking, and high tech," writes Callahan in Fortunes of Change. "In a first for Democratic presidential candidates, Obama even raised more money than McCain did from commercial bankers."

After the event, we had a chance to sit down with Callahan to discuss how the composition of the country's ultra-rich has changed over the past decade and what the implications are for philanthropy.

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(Running time: 5 minutes, 48 seconds)

What do you think? Does philanthropy give the mega-wealthy outsize influence in a democratic society? Should government do more to regulate the way private dollars are used to create public good? And what, if anything, should we do to ensure that tax-advantaged dollars are used to address issues of fairness and social justice?

-- Regina Mahone and Nick Scott

Comments

[Brad Fallon]

If only the ultra rich will adopt the giving and living approach to philanthropy, this will definitely increase the well-being of mankind. The government should also regulate funds that should be enjoyed by great number of people.

[DJ]

What do you think? Does philanthropy give the mega-wealthy outsize influence in a democratic society?

>>>> Sometimes....maybe. If Bill Gates wants to put his money towards eradicating malaria, or if George Soros wants to fund his various machinations, so be it. It's their money and their right. That doesn't mean the rest of us are at the whims of our rich overlords. Think whatever you want of the Tea Party, but the lesson is that an active, engaged citizenry has plenty of power of it's own.

Should government do more to regulate the way private dollars are used to create public good? And what, if anything, should we do to ensure that tax-advantaged dollars are used to address issues of fairness and social justice?

>>>> Define "fairness" and "social justice" first. Those are two things that are pretty hard to codify into law. I'm sure we can all name foundations who have an agenda that they consider to be for the public good, but others may not share that view. Yes, there has to be some regulation to be sure this money is actually being used for "good" and not going to terrorists, or being used to line someone's pocket, or act as a slush fund etc. But if you start making it difficult to "do good", people won't.