We all have status anxiety. In the must-read book, Inner Level, by Richard Wilkinson and Kate Pickett, the authors lay out the case that wealth inequality significantly exacerbates people’s status anxiety, which explains the near-perfect correlation between unequal societies and what are called negative social indicators. The U.S., the most unequal country, has the worst scores on infant mortality, health and education outcomes, incarceration rates, opioid use, and trust in our fellow citizens.
There have been two big philanthropy stories recently, both intersecting with status anxiety: the President’s status-enhancing ballroom might not have happened if it weren’t for rewarding the ultra-rich with generous charitable deductions; and OpenAI’s greed (a status anxiety by-product) that puts profits over people.
The Ballroom Big Lie. David Callahan’s recent Toplines provides a broader critique of the intersection of philanthropy and politics, but if one ever needed a reason to put an end to big-money philanthropy, or at least end the charitable tax deduction for the ultra-rich, look at the East Wing of the White House (of course, you can’t). With this White-House-becomes-Versailles conversion, philanthropic abuse and corruption have risen to an unprecedented level. It is nothing short of bribery when the White House puts the squeeze on 37 ultra-rich donors and corporations to pay for the golden shrine’s $300 million price tag, who are all too eager to participate in what should be an illegal act.
What is surprising to me is that no one seems to be talking about the Big Lie: Trump’s claim that “the government is paying absolutely nothing” for his shrine. The White House released the list of donors, 21 corporations and 16 private and family foundations. All the contributions go to Trust for the National Mall, a 501(c)(3) (tax-deductible) entity. Ultra-rich donors, whether contributing directly or through a private foundation, receive anywhere from a 40-to-90% tax benefit that is a direct cost to the government (i.e., taxpayer, public). In other words, for every million dollars used to bribe the President for private gain, we taxpayers foot as much as $900,000 of the bill!
The end result is not much different when corporations ante up. Although the charitable deduction is only worth about 20% to the corporation, the bigger question for all of their shareholders, putting aside the ethical and legal questions, is whether currying favor with the President is a good business decision. It certainly will get you a place at the 999-seat table, a number that happens to equate to the number of U.S. billionaires. Unfortunately, if we don’t start reining in extreme wealth, we’ll have to double the size of the ballroom in ten years.
OpenAI Greed. OpenAI Group PBC (Open AI), probably best known for its ChatGPT, was launched ten years ago as a nonprofit, but in its most recent–and complicated– changeover (see Mike Scutari’s dissection in Inside Philanthropy), it is a for profit with the OpenAI Foundation holding a 26% stake. If the so-called Public Benefit Corporation is valued at $500 billion, the foundation is worth $125 billion, making it not only the largest private foundation but larger than the next five largest foundations combined. If the PBC reaches a $1 trillion valuation (as an aside, can we agree that every trillion-dollar corporation is a policy failure?), the foundation’s value doubles, making it worth about 12% of all private foundation assets.
Originally created to ensure that artificial intelligence benefits all humanity, and not be constrained by the need to make a profit, it is now extremely likely that profit will take over as the driving force at OpenAI. And the billions of philanthropic dollars pocketed by OpenAI Foundation will be used not to protect the public from the dangers of AI but rather to shore up the flagging image of its brother OpenAI’s “PBC.”
There has been much reporting that CEO Sam Altman has made the atmosphere at the company toxic for the employees. Most importantly, as Wired reported, OpenAI’s “superalignment” team, created to address the problem that “we don’t have a solution for steering or controlling a potentially superintelligent AI and preventing it from going rogue,” was disbanded (and many employees resigned).
As noted by Mike Kaput for Marketing Artificial Intelligence Institute, “the [AI] we use daily follows guidelines and guardrails because human researchers and engineers have built those capabilities into them. If these humans don’t do that job effectively, we could see more instances of technology that can be used in seriously harmful ways.” Microsoft has a 27% stake in OpenAI. There is no evidence they have weighed in on AI safety vs. profit.
The Thanksgiving Antidote. If status anxiety is getting you down this holiday season, there is a simple, albeit temporary, fix: give time or money to a charitable organization. There is extensive evidence that connects giving to others with happiness and personal satisfaction. And if you are a major donor or private foundation, join the norm-busting Crisis Charitable Commitment. It is better to give than to hoard. If you are interested in joining or learning more, contact me directly: alan@extremewealth.org.
Alan publishes his blog on the last Tuesday of every month. Go figure. The letter reflects the personal views of its author and not of any organization.