The US Treasury Department is closed as a result of the government shutdown. (AP aPhoto/Carolyn Kaster)
When the clock ran down on congressional negotiations and the federal government shut down on October 1, preschoolers across the country were locked out of their Head Start centers. But then, Laura and John Arnold, a billionaire couple from Houston, made a personal gift of $10 million to Head Start. The Arnolds, with an estimated net worth of $2.8 billion, amassed their fortune before either spouse turned 40, through careers in the oil industry, particularly John’s energy trading hedge fund, Centaurus Advisors.
Coverage of their gift has typically been celebratory, and any criticism of the circumstances surrounding the gift was directed at the shutdown as the precipitating factor. The Atlantic’s Eleanor Barkhorn lamented, “It’s bad news when the government is in such disarray that it needs… money from a billionaire to keep providing services to the country’s neediest,” before concluding, “The money will keep thousands of children in safe and familiar surroundings. That’s good news.”
Putting low-income children back in the classroom—thereby enabling their parents to go back to work—is a positive outcome. But it is no accident that the 7,195 children whose Head Start programs lost funding, and their families, are dependent on the Arnolds’ largesse to keep their lives running normally. The shutdown has created the perfect testing ground for wealthy benefactors to fill the gaps left by an absent federal government. In this way, the shutdown and Arnolds’ emergency philanthropy provides a snapshot of the very future toward which House Republicans, pressured by the Koch brothers, Grover Norquist, and others, are attempting to steer the country.
The Arnolds’ public announcement of their gift was a refreshingly humble statement about the relationship between philanthropy and government: “We sincerely hope that our government gets back to work in short order, as private dollars cannot in the long term replace government commitments.” If the aim of the Tea Party’s shutdown stalemate is to strip America of its social safety net, it appears instead to have proven that even those who stand to benefit economically from a limited government and lower taxes find it in their interests to maintain government programs.
But there’s a bigger story about philanthropy stepping in to plug holes left by the government. Philanthropy is an under-recognized player in the trends that led to the shutdown in the first place: erosion of legitimacy and trust in public institutions, just as mega philanthropy became an ascendant political force. Though philanthropy is generally associated with symphonies, elite colleges, and hospital wings, the trend in recent years has moved away from more ornamental causes to ones that interfere more aggressively with core public institutions. The most visible example is the widely–criticized efforts by the Broad, Walton and Gates foundations in relentlessly pursuing disruptive, top-down corporate education reform.