ABSTRACT
Rousseau’s insight regarding the importance of trust explains why social enterprises have struggled to gain access to capital even as impact investing grows in popularity. His notion of a stag hunt applies equally well to wealthy philanthropists hoping to retain access to theirs. A restive public could, of course, abandon the partnership with elites the foundation represents by laying claim to their wealth through steeply progressive taxation. This chapter tells the story of the last half century of U.S. philanthropy from the perspective of Stanley Surrey, revealing how distrust between the public and wealthy philanthropists in the 1950s and 1960s fueled the rise of his tax expenditure budget. Recent years have seen foundations begin to give way to philanthropic limited liability companies, commercially affiliated donor-advised funds and strategic corporate philanthropy. The resulting calls for both a return to the high marginal income tax rates Surrey knew and the creation of a wealth tax reveal trust to be yet again in short supply and suggest that his tax expenditure budget may be partly to blame.
