‘Washington Monthly’: the New Rich

The newly rich technology entrepreneurs who have sought to experiment with philanthropy come in for a harsh attack in The Washington Monthly (January-February).

“Despite its clever co-optation of rhetoric befitting a Sally Struthers infomercial, the dot-com set’s spotty philanthropic track record makes them an easy mark,” writes Brendan I. Koerner, who is a fellow at the New America Foundation, in Washington. “The flurry of press releases trumpeting e-philanthropy and a Golden Age of giving belies a disturbing stinginess among the New Economy’s young aristocracy. Their forays into charity are frequently marred by hubris or naivete, laying bare the techno-elite’s substantial disconnect from the world beyond IPO’s and Pentium chips.”

The article attributes the rise in interest in so-called venture philanthropy to the fact that “the vogue among the New Rich is to dismiss the nonprofit sector as bloated and arcane, a black hole where contributions are frittered away on inefficient administration and expensive frills.” He says many business leaders assume that applying business skills to nonprofit work is all that is needed. But, he writes, “dot-commers err in assuming that instant NASDAQ success qualifies them as nonprofit geniuses. Through certainly justified in being picky about how their money is spent — no one wants to fund a crooked nonprofit czar’s Jaguar repairs and Maui trysts — the New Rich interfere far too much.”

Mr. Koerner says the businesses that have sprung up to help wealthy donors should be interpreted as a bad omen.

“The desire to create synergy between philanthropy and the bottom line is indicative of the softness of the dot-com set’s commitment to charity,” he writes. “The philanthropic cluelessness is evinced by the apparatus that has arisen to manage their donations. There are philanthropic consultants, who are retained to cajole their guilt-ridden clients into writing checks. There are philanthropic mutual funds, like the Schwab Fund for Charitable Giving, that are designed to make charity as palatable as playing the market. And there are social organizations that lure the New Rich into philanthropy with the sirens’ call of free booze.”

He adds: “The prodding is necessary because the dot-com set has no grand designs on a selfless second act. Cloistered from the non-networked world, their energy challenged into 100-hour-a-week quests for instant wealth, they have little natural impetus to tackle the planet’s myriad social ills. The current vogue for giving, spurred by a mix of shame and competitive desire, seems like a fad.”