When is giving really taking? Ask the Koch brothers!

by Jonathan Reis

When we flyer for Don’t Do Koch, people sometimes say things like “David Koch gives to the ballet, hospitals and museums. He’s not so bad.” These people are falling for Koch’s cynical use of philanthropy. The David Koch’s “philanthropy” is making use of his money, and ours, to add to his power and influence.

First of all, much, perhaps most, of it is not his money. It’s ours. Say he donates $10 million to the ballet. He immediately takes $3 million off of his taxes. He’s probably donating what’s called ‘appreciated property’ which allows him to avoid an additional $3 million in taxes.1 So, he is effectively leveraging $4 million of his money with $6 million from public funds. If his family foundation is making the gift, he is not getting tax benefits now, but he got them when he gave the money to the foundation and on all of its investment gains since then.

What does he get for his, and our, money? When he gives to the ballet, he gets great PR (as the comments we hear show), connections to other wealthy New Yorkers, and honor from and influence in a great public institution.

Even worse, Koch’s donations are part of his plan to influence the public conversation on important issues. Koch Industries is in the business of dirty oil, and so the Koch brothers have an interest in slowing down efforts to address global warming. They fund “public interest” groups such as Americans for Prosperity, which openly argue for inaction. At the same time, David Koch is a major donor to the Smithsonian and the American Museum of Natural History and on the board of both. The Smithsonian even put his name on their Hall of Human Origins—and he uses his influence to affect how these issues are portrayed.

Contributions can buy direct political influence, too. This can operate on two levels. He supports conservative candidates directly and through the super PACs he funds. But, we also doubt that liberal politicians are immune to his influence. You would need to be quite naïve not to suspect ulterior motives when David Koch makes a major grant to the United Negro College Fund at the same time as he supports lobbyists against increases to Head Start funding.

We applaud public sector union AFSCME’s decision to withdraw from partnerships with UNCF in response to Koch’s donation. We support calls for UNCF to return the gifts. Similarly, we would even urge hospitals to refuse the Kochs’ contributions since their business activities are literally making people sick. Their gifts enable this kind of cynical exploitation.

Theodore Roosevelt was talking about an earlier oil baron, John D. Rockefeller, when he said  “no amount of charity in spending such fortunes can compensate in any way for the misconduct in acquiring them.” But the Koch brothers’ giving shouldn’t even be called charity. It is part of a larger strategy to influence public opinion and government policy for their own interests. And we, as U.S. taxpayers, are subsidizing it.

1 We are assuming that all of his taxable income receives preferential treatment such as capital gains or qualified dividends. To the extent it is “ordinary” income, his tax benefits would be larger. We are assuming that his tax domicile is New York City.

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