6: The Democracy Deficit

While Chapter 5 examined private wealth’s public benefits, this chapter systematically analyses democratic deficits in contemporary philanthropic practice. These deficits are not incidental flaws but structural features of private wealth governance requiring institutional reform. The analysis is organised around five interrelated problems: transparency failures, accountability gaps, participation exclusion, ideology over evidence and dependency traps.

Democratic accountability requires that power be visible: citizens must know who exercises authority, how decisions are made, what resources are deployed and what outcomes result. Philanthropic practice systematically fails these transparency requirements.

US foundations face minimal disclosure obligations. IRS Form 990 requires reporting of total revenues, expenses, assets and compensation for key employees, plus identification of grants exceeding $5,000. However, this leaves vast information gaps: