Beware Billionaires Bearing Gifts

There’s a new Koch organization in town. Instead of trying to buy politicians to do the bidding of billionaires, as Charles and David Koch have historically done, this foundation will support community groups trying to cure the miseries of eons—everything from poverty to addiction.

And they’ve got some street cred, having successfully worked with renowned liberal Van Jones to secure legislation to reduce mass incarceration. Billionaire Charles Koch says the mission is this: “We must stand together to help every person rise.”

That is some good stuff, right there. It’s what labor unions have always preached—workers must stand together to gain the collective power essential to pull every one of them up. It works, too. In the middle of the last century, collective bargaining created the great American middle class.

Labor unions are created and controlled by workers. Billionaire-funded organizations are beholden to billionaires.

There’s an important difference, though, between the work of labor unions and billionaire-funded organizations. Labor unions are created and controlled by workers. Billionaire-funded organizations are beholden to billionaires.

What could be so bad, though, about accepting gifts from billionaires? Just last week, billionaire Robert F. Smith promised to pay off the student loans of 396 graduates of Morehouse College. That means these young people get to launch their careers without the burden of debt. Smith granted the loan forgiveness with no stipulations other than urging every member of the class of 2019 to do what they could to pay it forward—that is, help others achieve as well.

This gift is part of Smith’s effort to fulfill his giving pledge. He signed a formal promise in 2017 to donate half of his fortune, estimated at $5 billion. The giving pledge is a project of billionaires Warren Buffett and Bill and Melinda Gates, who are bequeathing at least half of their money and urging other billionaires to do the same.

In 2016, Smith, who graduated from Cornell University and worked as a chemical engineer before he became an investor, committed to donating $50 million to Cornell’s chemical and biomolecular engineering school. A significant portion of the endowment will be dedicated to scholarships and fellowships for African American and female students who are traditionally underrepresented in engineering and technology. Cornell then named the department the Robert Frederick Smith School of Chemical and Biomolecular Engineering.

Not all billionaire gifts are benign, however. Just ask the students at George Mason and Florida State universities. Grants from the Kochs to the schools came with significant strings attached.

In the case of the millions the Kochs gave to Florida State for its economics department, the Kochs demanded the right to approve who was hired, to annually review their work and to withdraw funding if dissatisfied. Outrage erupted when students and the public learned of this infringement on academic freedom.

The Kochs donated approximately $150 million to 300 colleges and universities between 2005 and 2015, gifts they frequently specified must support economics and law schools fostering unfettered free-market capitalism. Of that, at least $50 million went to George Mason, where, like at Florida State, the Kochs got control over faculty and course selections. The libertarian brothers’ money helped convert the college into a center for libertarian study.