If you want to be the skunk at the garden party, tell people we should be very alarmed about billionaire donations.Michael Bloomberg just gave $1.8 billion to Baltimore's Johns Hopkins University, establishing a fund that will provide financial aid to thousands. While this is an act of visionary generosity, we should be wary of billionaire beneficence.This isn’t about Mr. Bloomberg, who is a smart and strategic giver. It’s about the way extreme wealth inequality is disrupting democracy, philanthropy and the vibrant independent nonprofit sector that we depend on.Such gifts are now routine news events, as donations worth over $50 million now flow regularly to alma maters and other charities, given by those with vastly more money than they could burn through in their lifetimes. This year's Forbes 400 list of billionaires is laced through with such stories of charitable deeds.Such giving is supposed to stimulate a warm glow and a feeling of gratitude for the donor. Instead, these stories should trigger warning signals, as they mask a troubling trend.Philanthropy more and more reflects the inequality infecting the rest of our society. The higher up the wealth ladder one goes, the greater the concentration of wealth gets. The 400 richest billionaires in the U.S., with Mr. Bloomberg at No. 10, now have combined wealth equal to the assets of nearly two-thirds of U.S. households combined.As the economy itself becomes more top heavy, these mega-donors are dominating the philanthropic sector, as my coauthors and I documented in a new report for the Institute for Policy Studies. All the growth in giving now comes from mega-donor gifts like Mr. Bloomberg's.At the same time, we found that as the wealthiest donors give more and more, charitable giving by low and moderate income donors has been in a steady decline for almost two decades.This isn't because the wealthiest givers are simply the most generous. Instead, this trend mirrors a divergence in real measures of economic well-being, such as such the decline in homeownership and stagnation of income among people of ordinary means. Not surprisingly, the less economically secure people feel, the less they give to charity.The independent sector is strongest when it has a wide variety of stakeholders and supporters. Top-heavy giving puts the nonprofit sector at risk of mission drift, as it adapts to the wishes and designations of large donors.And let’s not forget that taxpayers subsidize private billionaire philanthropy, chipping in anywhere from 37 to 57 cents of every dollar that a mega-donor gives to charity in lost tax revenue, depending on how aggressive their tax avoidance planning is. This effectively means that taxpayers provide matching funds for the donation priorities of private donors, whether a scholarships at John Hopkins or the new wing of an art museum.Michael Bloomberg went to Hopkins on a National Defense student loan, paid for by taxpayers — including very wealthy taxpayers — through a considerably more progressive tax system than we have today. It was a good idea then and a good idea now.It would be better if Mr. Bloomberg and other billionaires paid their fair share of income and inheritance taxes — and that we, as a society, invested in making higher education accessible for the next generation.To Mr. Bloomberg’s credit, he understands this. He used his gift announcement to advocate for greater federal and state support to make college more affordable and accessible for all students.Charity does some things very well, such as building hospitals and university buildings. But it doesn't build infrastructure, reduce inequality, protect the environment or make college more affordable at the scale required. There's simply not enough money in the sector to make the huge investments our society actually needs to reduce extreme inequality, especially when the spending is being directed by billionaires.Philanthropy is no substitute for a fair tax system and adequately funded public services at all levels of government.Chuck Collins (chuck@ips-dc.org) directs the Program on Inequality and co-edits Inequality.org for the Institute for Policy Studies. He co-wrote the IPS report Gilded Giving 2018 and is the author of the books “Born on Third Base” (Chelsea Green, 2016) and “Is Inequality In America Irreversible? (Polity, 2018).