Non-Philanthropy

Someone needs to invent a good Seinfeldian term (along the lines of “unvitation” and “re-gifting”) for “charitable” acts or donations that aren’t what they seem. (Recall my January posting about Reebok.)

Check out this story from yesterday’s NT Times: Billionaire Gives a Big Gift but Still Gets to Invest It

Boone Pickens, the often controversial and always colorful Texas oilman turned investor, took advantage of a temporary tax break to make a gift that propelled him into the ranks of the nation’s top philanthropists last year.

But what Mr. Pickens gave away with one hand he continues to control with the other.

At the end of the year, he gave $165 million to a tiny charity set up to benefit the golf program at Oklahoma State University, reaping Mr. Pickens a tax deduction. Records show that the money spent less than an hour on Dec. 30 in the account of the university’s charity, O.S.U. Cowboy Golf Inc., before it was invested in a hedge fund controlled by Mr. Pickens, BP Capital Management.

“It’s all his money, and he’s on the investment committee” of Cowboy Golf, said Mike Holder, the university’s athletic director and former golf coach, who is on the board. “If a person’s making a gift of that size, he can stipulate what he wants it invested in.”

Asked whether investing in BP Capital had been a condition of Mr. Pickens’s gift, Mr. Holder said no. “That was my decision,” he said.

Is such behaviour unethical? Well, wait: this is a good example of where we should resist asking & answering in those terms. According to the article, Pickens’ ploy is legal (which is not everything, but it’s something). According to an expert cited on conflict of interest, there is “probably” a conflict of interest here. Did Pickens actually donate money to a charity? Yes, and that’s arguably still a good thing (it will likely benefit others, perhaps more than it will benefit Pickens). So, think our ethical analysis needs to be more fine-grained than “is this ethical: yes or no?”

How about these questions:
“Does Pickens deserve our admiration for this donation?” No.
“Is this an example of (legal) tax-evasion, and perhaps a shirking of civic duties?” Probably.
“Should Pickens be listed among those few high-level philanthropists who really want to give something back to their communities?” Nope.
“Is this a good example of real philanthropy?” No.
“How much moral credit should Pickens get?” Not much.

(Thanks to Wayne Norman for pointing me to this story.)

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