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About
Carnegie Corporation
Some
Reflections on the Historic Roots, Evolution and Future of American
Philanthropy
President's
Essay — From the 2000 Annual Report
by Vartan Gregorian
In
its 1919 obituary for Andrew Carnegie, the New York Sun called
him the “personification of Triumphant Democracy,”
referring to Carnegie’s own book on America. Written in 1886,
it gloated over statistical evidence of the young democracy’s
success, and in deference to European readers, Carnegie coated “the
wholesome medicine of facts in the sweetest and purest sugar of
fancy at my command.” As the Sun noted, the book was
quintessential Carnegie: an ebullient, over-the-top, unrelentingly
optimistic, 509-page love song, dedicated by the Scottish immigrant
to his new homeland: “To the Beloved Republic under whose equal
laws I am made the peer of any man, although denied political equality
by my native land, I dedicate this book with an intense gratitude
and admiration which the native-born citizen can neither feel nor
understand.”
A book critic asked rhetorically, “Where are the shadows?”
Carnegie swiftly replied, “The book was written at high noon
when the sun casts no shadows.”
Carnegie’s story is an original. He grew up in poverty just
north of Edinburgh with slogans like “death to privilege”
ringing in his ears. His father was a weaver and his grandfather
was a shoemaker, and both were politically active in organizing
trade unions and demanding democratic reforms including the common
man’s right to vote. In the “Hungry Forties,” with
borrowed money, the family emigrated to Pennsylvania. There, Carnegie
began work in a factory at the age of 12, cashed his first dividend
check at 21 and, at 33, was wealthy, privileged and torn by conflicting
values.
“The amassing of wealth is one of the worst species of idolatry,”
the rich young man wrote. “Whatever I engage in I must push
inordinately; therefore should I be careful to choose that life
which will be the most elevating in its character.” He made
a creative compromise. Proclaiming himself a trustee of public wealth,
he justified his zeal for making money by passionately reinvesting
it in education, science and culture to “benefit humanity for
generations untold.”
A hundred years have now passed since March 2, 1901, the day when
Carnegie completed one of the most significant financial transactions
in American history by selling the steel empire he had built, and
which was the source of his wealth, to J.P. Morgan for $480 million.
It was one of the world’s largest fortunes, acquired before
income taxes or antitrust laws. That day in March, Carnegie also
retired from business and, with the proceeds from the sale of the
Carnegie Company (which included Carnegie’s steel holdings)
and his accumulated wealth, he expanded the range and scope of his
giving. In the last 18 years of his life, Carnegie made the vast
majority of his philanthropic gifts, which ultimately exceeded $350
million.
A social reformer to the end, Carnegie bequeathed pensions to one
retired U.S. president and the widows of two other Presidents, hoping
that the example of his private generosity would promote public
responsibility in this area. Down to his last million dollars, in
his will, he supported knowledge and its diffusion with generous
gifts to several colleges and the “relief of needy writers”
through the Authors Club of New York. Carnegie himself wrote a dozen
books, including six collections of essays, and he included many
writers among his friends and correspondents. (Feigning need, Mark
Twain once wrote to Carnegie: “You seem to be in prosperity.
Could you lend an admirer a dollar & a half to buy a hymn book with?...
P.S. Don’t send the hymn book, send the money. I want to make
the selection myself.”)
A century later, the occasion of the anniversary of Andrew Carnegie’s
transfer of wealth from business to philanthropy provides an opportunity
to reflect on Carnegie’s role in philanthropy as well as role,
responsibilities and challenges in the nation. As Americans, we
tend to be impatient with history, preferring to figure out things
ourselves rather than figuring out what others have done before
us. But taking a retrospective glance at American philanthropy can
be inspirational and instructive. After all, citizen philanthropy
is an important component of our participatory democracy, as most
Americans share their time and money for public causes. Yet this
public generosity—unrivaled in the world for its diversity,
depth and scope—is also one of the nation’s least appreciated
strengths since it has become taken for granted. Knowledge of the
role of American philanthropy gives a better understanding of the
critical importance of public-private partnerships as well as citizen
participation in our polity.
Philanthropic Society: Once a Radical Idea
Over time, the words for humanitarian acts—including volunteerism,
mutual assistance, charity and philanthropy—have blurred together,
blurring, as well, important distinctions. Charity and philanthropy,
for example, have been used interchangeably, but they are really
different sides of the same coin. Charity, which is derived from
the Latin word carus, meaning dear, has a long religious
history; for Christians, Jews and Muslims, for example, it has meant
giving immediate relief to human suffering without passing judgment
on those who suffer. Philanthropy has a more secular history and
comes from the Greek word philanthropos, meaning love of
mankind. The Greek meaning carried over to English and, for the
longest time, philanthropy referred only to a caring disposition
toward one’s fellow man. Now the word is used to describe generosity
that promotes human progress in any field. While the term philanthropist
may conjure up generous millionaires and billionaires, the vast
majority of gifts of time and money come from average American families.
This modern definition evolved slowly, starting in Europe at the
turn of the 17th century. At that time, there was a burst of philanthropic
activity, mostly associated with forming mutual-aid societies and
promoting humanitarian reform. But as social problems festered,
citizens’ efforts were considered inadequate and states took
greater responsibility for providing relief. England, for example,
enacted its landmark Statue of Charitable Uses in 1601. The law
codified the state’s responsibility for assisting the poor,
aged and orphaned—as well as for providing hospitals, schools
and universities. Other nations, in Europe and elsewhere, followed
this model, dampening the growth of civil society—a term that
refers to all the voluntary entities that operate apart from government
and business.
Still, the revolutionary idea of philanthropic citizens working
together for societal benefits persisted and it crossed the Atlantic
with some idealistic colonists who believed in mutual-aid and voluntary
associations. Preaching from the deck of the Arbella as it sailed
toward New England in 1630, the Puritan leader John Winthrop spoke
passionately about the interdependence of the community: “We
must delight in each other, make others’ conditions our own,
rejoice together, mourn together, labor and suffer together.”
A half century later, in 1682, William Penn led his Quaker followers
to Pennsylvania, where they intended to establish a society based
on wider freedoms than they had enjoyed in the Old World. This “holy
experiment,” as Penn called it, included good will towards
one’s fellow members of society as a deeply rooted principle.
“True Godliness,” he said, “doesn’t turn men
out of the world, but enables them to live better in it, and excites
endeavors to mend it.”
Idealism aside, the colonists faced the stark choice of either going
without societal amenities and necessities or providing them through
cooperative effort. In this organic way, then, voluntary associations
formed to fill every void in the community, from fighting fires
to lighting street lamps. These voluntary associations became the
backbone of civil society. Inevitably, wealthy civic leaders became
philanthropists and often lent their names to important institutions.
In 1638, John Harvard gave his library and half of his estate to
a new school in Cambridge. Following his example over the centuries
were the likes of Elihu Yale, Thomas Gallaudet, John Hopkins and
Leland Stanford. Chiseled in stone above the entrance to the main
building of the New York Public Library are the names Astor, Lenox
and Tilden. Other names grace many great institutions—the Guggenheim
Museum, the Mayo Clinic, The Rockefeller University, the Morgan
Library, the Huntington Library, the Newbury Library, the Field
Museum, The Frick Collection, the Smithsonian Institution—and
remind us of philanthropists’ role in educating the young,
preserving our culture and improving our civil society.
Benjamin Franklin, of course, was the genius of mutual-aid societies.
In 1727, at the age of 21, he formed a club named Junto for the
mutual improvement of its members and the community. Over the years,
one thing led to another: the founding of Philadelphia’s first
library; a volunteer fire company; plans for paving, cleaning, lighting
and policing the streets; a mutual insurance company; a hospital
and an academy, which subsequently became the University of Pennsylvania.
Benjamin Franklin was reflecting the ideas of the 18th century Enlightenment
and the moral philosophy of Adam Smith. Today, Smith is best known
for advocating laissez-faire capitalism in his second book The
Wealth of Nations, but he based his economic theories upon his
view of human nature, which he described in his first book, The
Theory of Moral Sentiments, published in 1759. There, he theorized
that man is driven by passionate self-interests, but moderates them
with his intellect and innate sympathy for others. In this book,
Smith first made the famous statement that, when people are left
to follow their self-interests, they are “led by an invisible
hand, without knowing it, without intending it, to advance the interest
of the society.”
Indeed, in the British Isles alone, the 18th century saw significant
growth of voluntary associations and mutual-aid societies. Some
examples suggest their range of interests: the Dublin Society for
the Improvement of Husbandry; the Lunar Society of Birmingham, for
members to exchange technical and scientific information; and the
London Society of Arts, which encouraged “trade and manufactures.”
Across the Atlantic, the nation saw a “baby boom” of voluntary
organizations in the years following the American Revolution. In
September 1787, for example, the Pennsylvania Herald carried
laudatory letters to the editor about the large number of new associations.
They included a society for the “gradual abolition of slavery,”
a society for the “promotion of political inquiries,”
a society devoted to the “medical relief of paupers” and
a society for “alleviating the miseries of public prisons.”
It is also worth noting that some of our founding fathers did not
welcome the phenomenal growth of associations. They cited the fact
that associations had no specific legal basis for existence, apart
from the citizen’s right of free assembly. George Washington
was among those who feared that nongovernment organizations would
become too powerful—after all, voluntary associations like
the Sons of Liberty had helped the colonies defeat England, then
the world’s mightiest power. In his farewell address to Congress
in 1796, Washington warned that “cunning, ambitious and unprincipled
men” could use these associations to “subvert the power
of the people, and to usurp for themselves the reins of government.”
Throughout American history, in fact, the practice of sharing great
wealth for public benefit has periodically rubbed our democratic
principles the wrong way, especially since the variety of philanthropic
causes ensured their involvement in political controversies. The
historian Robert Bremner adroitly captures our mixed feelings: “We
expect rich men to be generous with their wealth, and criticize
them when they are not—but when they make benefactions, we
question their motives, deplore the methods by which they obtained
their abundance and wonder whether their gifts will not do more
harm than good.”
Nevertheless, 19th century America captured the world’s imagination
with the way its extensive network of voluntary associations, mutual
aid societies and citizen philanthropists—both rich and poor—were
building the institutions of civil society. This was a radical idea
in a world where the State was almost synonymous with society. In
1835, an international best-selling book spread the news. The book,
of course, was Democracy in America, written by the 30-year-old
French aristocrat Alexis de Tocqueville.
He explained how citizens’ associations played a critical role
in preserving and strengthening the modern world’s first nation
that did not have a ruling class. He coined the word “individualism”
to describe the self-reliant character of Americans, who reveled
in their freedom from aristocracies. While noting that this unrestrained
freedom might well have turned into anarchy, he also observed that
the excesses and negative aspects of individualism were held in
check by citizens’ benevolent associations, which were organized
to influence politics and address societal concerns.
He also pointed out that the United States was that rarest of places,
a nation that actually belonged to its citizens, and this sense
of ownership fostered a communal, barn-raising spirit. “Americans
of all ages, all conditions and all dispositions constantly form
associations,” he marveled. Tocqueville attributed this generosity
to a widespread sense of obligation to repay the country for providing
the benefits of freedom and a free market. Citizens, he observed,
seemed to have an “enlightened regard for themselves,”
which spurred them to “willingly sacrifice a portion of their
time and property to the welfare of the state.” At its best,
Tocqueville believed that “enlightened self-interest”
would help citizens distinguish between integrity and compromise,
justice and injustice, personal gain and public interest, means
and ends, good and evil.
By 1854, there was so much philanthropic activity in America that
Henry David Thoreau wrote, “As for doing good, that is one
of the professions which are full.”
The 19th century saw the birth of the National Council of YMCAs
in 1851, the Salvation Army in 1865, the American Red Cross in 1881,
the National Benevolent Association in 1887 and the Volunteers of
America in 1896—all of which are among the nation’s 50
largest charities today.
Doing good was also gaining in sophistication. A central concern
of late 19th century philanthropies was that misguided charity promoted
dependence among the poor. Reformers called for replacing charity
with what they called “scientific philanthropy.” It was
not scientific, but it was a deliberate effort to consider the root
causes of poverty and develop preventive measures and self-help
programs to eradicate the problem. By raising the hopeful prospect
of actually solving entrenched social problems, the reformers energized
philanthropy and contributed to its phenomenal growth in the 20th
century. In addition, the concept of taking carefully planned steps
to reach goals became central to what is now called strategic philanthropy.
Near the turn of the 20th century, the New York Tribune estimated
that the Industrial Revolution had created more than 4,000 millionaires—a
staggering number for the times. The newly rich had three basic
choices for handling their wealth: They could spend the money on
themselves and their families. They could share the wealth with
charitable causes. Or—if they were pioneers in philanthropy—they
could invest their wealth for society’s long-term benefit.
Andrew Carnegie, John D. Rockefeller, J.P. Morgan, Andrew W. Mellon,
J. Howard Pew and Henry Ford were among the pioneers who ushered
in the modern age of philanthropy. They created a new type of institution:
the foundation, which had a broad mission to benefit mankind in
perpetuity.1 In these new, independent organizations,
decision making and management were delegated to boards of directors.
At the time there were few boards of directors and even the word
“management” itself was a novelty. Interestingly, the
term was first used not by businesses, but by government agencies,
nonprofit organizations and “scientific philanthropies”
that created efficient organizations for setting priorities and
taking steps to reach goals. In 1922, seven years before becoming
president, Herbert Hoover organized the world’s first “management
conference.” The same year, he wrote a book, entitled American
Individualism, that described the healthy growth of the “associative
state.” The book publicized and promoted two parallel trends:
first, the increasing rate at which privately owned companies were
becoming publicly owned and, thus, more accountable through their
boards of directors; and second, the growing number of nonprofit
organizations that were pioneering professional management practices,
including making decisions more publicly through their boards.
Philanthropies were not confined to building monuments such as universities,
hospitals and museums. Many were doing the less visible but vitally
important work of helping nonprofit organizations perform public
services. Some notable examples: the Russell Sage Foundation, established
in 1907 by Mrs. Russell Sage, a financier’s widow, focused
on “social betterment,” which initially included research
on tuberculosis and provided for children’s recreation. The
Rosenwald Fund, established in 1917 with money Julius Rosenwald
made at Sears, Roebuck and Company, provided matching grants for
African-Americans to build more than 3,200 public and private schools
in the South and supported black scholarship and the National Association
for the Advancement of Colored People. The Century Foundation, formerly
the Twentieth Century Fund, established in 1919 by Edward A. Filene,
the department-store magnate, helped establish trade and credit
unions in an effort to redistribute income. Foundations, all taking
a role in improving society, sprang up all over the country: Rockefeller
Brothers Fund, Rockefeller Foundation, the Charles A. Dana Foundation
and the Horace W. Goldsmith Foundation in New York; Kresge Foundation,
W. K. Kellogg Foundation and Charles Stewart
Mott Foundation in Michigan; the Meadows Foundation in Texas; the
Spencer Foundation and Joyce Foundation in Chicago; the John S.
and James L. Knight Foundation in Florida; the Annie E. Casey Foundation
in Maryland; the William Penn Foundation in Pennsylvania; the Ahmanson
Foundation in California; the Meyer Memorial Trust in Oregon and
the list goes on.
In his essay, “Foundations in the American Polity,” David
C. Hammack summed up the growing role of these organizations in
building a democratic civil society: “From their appearance
shortly after 1900, foundations have played their most important
role as reinventors of the nonprofit sector, as reshapers of nonprofit
institutions, as organizers of new nonprofit institutions.”
Andrew Carnegie: “Trustee” of Public Wealth
When it comes to reinventors and reshapers of American society,
Andrew Carnegie personifies the difference an individual with an
altruistic vision can make. Although he is still best known for
building 2,500 public libraries—which are enjoyed by 35 million
people a day—two less well-known examples of his philanthropic
work show how he wove his idealism into public policy:
• After his retirement from business, Carnegie became a tireless
promoter of ways to further the cause of peace. In a 1907 speech—which
was ultimately translated into 13 languages, with more than three
million copies in print—Carnegie attacked the evils of war,
calling it “the foulest fiend ever vomited forth from the mouth
of Hell.” With equal passion, he argued that war might be eliminated
if a global organization, which he later proposed calling a “league
of nations,” were established with authority to settle international
disputes through arbitration and the use of economic sanctions.
After World War I, President Woodrow Wilson’s proposal for
the League of Nations had much in common with Carnegie’s ideas,
as did subsequent proposals for the United Nations.
• While serving as a trustee at Cornell University, Carnegie
was shocked to discover that teachers, “one of the highest
professions,” earned less than his clerks and lacked retirement
benefits. In 1905, he established a $10 million endowment to provide
free pensions to college and university teachers. But there were
strings attached, and one requirement was that participating institutions
had to have the highest academic admission standards of the day.
Of the first 421 applications, only 52 institutions were deemed
eligible for the free pension program. Faced with the ensuing professorial
revolt, colleges and universities across the nation raised their
academic standards in order to join the pension system. Carnegie’s
biographer, Joseph Frazier Wall wrote, “With his pension plan,
[he] had done more in a year to advance the standards of higher
education within the United States than probably any carefully conceived
program to accomplish that goal could ever have done.” There’s
an interesting footnote to this story: As more and more colleges
raised standards in order to join the free pension system, Carnegie
realized that his personal wealth could not support its growth.
So in 1918, with a $1 million gift, he established the Teachers
Insurance and Annuity Association of America. The association managed
retirement accounts, which were jointly funded by teachers and their
employers. Now called TIAA-CREF, it is one of the world’s largest
insurance companies, with about $300 billion in assets.
Carnegie’s fortune became the nation’s good fortune. In
his 1899 essay, The Gospel of Wealth, he explained how he
had come to terms with being both a capitalist and a social reformer,
and he encouraged others to follow his path. He wrote that while
it was inevitable that some people became rich in a capitalist society,
the rich should realize that they were merely trustees of a democracy’s
public wealth. As such, they were morally obliged to reinvest it
as wisely as they could for the public good. As Carnegie put it,
“Not until the dollars are transmitted into service for others,
in one of the many forms best calculated to appeal to and develop
the higher things of the moral, intellectual, and esthetic life,
has wealth completely justified its existence.”
The publication of Gospel created an international stir,
praised by many, denounced by others. Some objected to Carnegie’s
assumption that the problem of wealth was its administration—not
its concentration—and that the rich knew better than the people
themselves how to spend it. In his book, The Greatest Good Fortune:
Andrew Carnegie’s Gift for Today, Simon Goodenough concluded,
“It is possible to forgive his conceit because he made provision
for others, not himself, to determine how his money should be spent
after his death.” At the time, some religious leaders said
Carnegie’s gospel, though novel in its statement, varied little
from Judeo-Christian tradition. But many objected to his philanthropic
advice to would-be philanthropists: On a suggested gift list, he
ranked gifts to churches dead last, below swimming baths, meeting
halls, parks, hospitals, libraries and universities, which he considered
the most important.
In addition to spreading his gospel of generosity, Carnegie was
an innovative philanthropist. He was a prime advocate of so-called
scientific philanthropy, and he favored planned, long-term investments
that provided communities “the ladders upon which the aspiring
can rise.” As mentioned earlier, Carnegie was among the small
group of philanthropists who invented the modern day foundation,
with its professional managers and broad missions to provide societal
benefits in perpetuity.
It took Wall, Carnegie’s biographer, more than 1,000 pages
to define Carnegie’s place in history, but it is possible to
get a sense of his impact by just mentioning the institutions that
he built and then endowed for the public’s perpetual benefit,
both in the United States and the British Isles. In chronological
order of their creation, the 11 Carnegie trusts and institutions
are:
1895. Carnegie Institute in Pittsburgh, endowed with $6 million,
with the purpose of celebrating art, science, music and literature.
Built at a cost of about $20 million, the institute has a library,
art gallery, music hall and museum of natural history. Among other
natural wonders, the museum displays two dinosaurs, Diplodocus carnegie
and Apatosaruus louisae, named after his wife. The museum helped
preserve famous dinosaur quarries in northeastern Utah, which are
now part of the Dinosaur National Monument.
1900. Technical Schools, endowed with $2 million, offered
technical training at the secondary level in Pittsburgh. The school
quickly evolved into the Carnegie Institute of Technology, a college
that received an additional endowment of more than $7 million. In
1967, the Carnegie Institute merged with the Mellon Institute to
become Carnegie-Mellon University. The university has colleges in
engineering, fine arts, science, industrial administration, humanities
and social science.
1901. Carnegie Trust for the Universities of Scotland, endowed
with $10 million, was created “for improving and extending
the opportunities for scientific study and research” as well
as providing scholarships for needy students—a provision that
was then attacked as radical, based on the fear that admitting the
poor would lower standards.
1902. Carnegie Institution of Washington, endowed with $22
million, was the nation’s first nonprofit research institution.
It has operated five centers for basic research, including the Mount
Wilson and Las Campanas Observatories. Two of its scientists have
won Nobel Prizes for their work in genetics.
1903. Carnegie Dunfermline Trust, endowed with about $4 million,
was created to benefit the 26,000 residents of Carnegie’s birthplace
in Scotland. As he put it, “to bring into the monotonous lives
of the toiling masses of Dunfermline more of sweetness and light.”
The trust has provided village residents with social, educational
and recreational opportunities.
1904. Carnegie Hero Fund Commission, endowed with about $6
million, “to honour civilians who risk their lives saving or
attempting to save the lives of other persons, and to provide financial
assistance to disabled heroes and to the dependents of heroes who
lose their lives in the performance of the rescue acts.” Helping
heroes was Carnegie’s favorite charity and, by 1911, he had
created 10 other hero funds in Europe. All together, the 11 hero
funds had a total endowment of $10.5 million.
1905. Carnegie Foundation for the Advancement of Teaching, endowed
with $16 million, was initially established to provide free pensions
to college and university teachers. After 1931, the foundation concentrated
on research to improve education.
1910. Carnegie Endowment for International Peace, endowed
with $10 million. Its purpose was to “hasten the abolition
of international war, the foulest blot upon our civilization.”
The organization’s agenda has included research by resident
scholars, publications such as Foreign Policy, conferences and improvements
to education in international relations.
1911. Carnegie Corporation of New York, endowed with $135
million and, thus, the largest permanent philanthropic trust ever
recorded at that time. Its mission was “to promote the advancement
and diffusion of knowledge and understanding.” The Corporation’s
assets have grown to about $1.9 billion, and the foundation annually
invests about $75 million in long-term efforts to promote peace
and education, largely through research.
1913. Carnegie United Kingdom Trust, endowed with $10 million,
for the “well-being of the masses of the people of Great Britain
and Ireland.” The trust has provided support for a wide variety
of community services, ranging from child welfare programs to community
theaters.
1914. Church Peace Union, renamed the Carnegie Council on
Ethics and International Affairs in 1986, was endowed with about
$2 million. Its mission was to “promote peace, through the
rallying of men of all religions to supplant war by justice and
international brotherhood.” Through its publications, forums
and research, the organization has promoted the application of ethics
to key international problems and helped refugees displaced by war
and natural disasters.
In designing institutions that would perpetually promote the public
welfare, Carnegie realized the need to give trustees flexibility
to adjust their humanitarian agenda “as the needs and expectations
of society changed.” He was so farsighted, and so optimistic,
that his instructions to the peace foundations encouraged them to
move on to other concerns “when war is discarded.”
What is amazing, and a testament to the strength of Carnegie’s
vision, is that all 11 institutions continue their missions in science,
culture, education and peace. This is the case also with us, here
at Carnegie Corporation of New York, where we continue programs
in education, democracy, international development, and international
peace and security.2
In addition to endowing the above institutions, Carnegie spread
countless other gifts. In New York alone, he built 66 free libraries
throughout the five boroughs of New York, created the nation’s
first medical research laboratory, at Bellevue Hospital, and supported
the New York Zoological Society and the New York Association for
the Blind. He also spent $2 million building Carnegie Hall, but
that was as much a business undertaking as a cultural investment.
Shortly after his death, Carnegie Corporation sold the hall to private
interests.
In his Gospel, Carnegie declared that “the man who dies
rich, dies disgraced.” In 1919, he died gracefully. He had
already provided for his daughter and wife “beyond her desires,”
as he wrote in his will, which completed the disposition of nearly
all of his wealth to mankind’s future. His home, the mansion
on East 92nd Street in Manhattan, was ultimately donated to the
Smithsonian, becoming home to the Cooper-Hewitt Museum. And his
crenelated castle in Scotland was ultimately sold to benefit the
United Kingdom Trust. (Above one of the castle’s fireplaces,
Carnegie had his favorite saying carved into the woodwork: “He
that cannot reason is a fool; He that will not is a bigot; He that
dare not is a slave.”)
Triumphant Philanthropy
More than a century after Carnegie extolled the American way in
Triumphant Democracy and 165 years after Tocqueville coined
the term individualism, the American character remains unique in
the world—and something of a mystery, both at home and abroad.
The historian Arthur M. Schlesinger has helped clarify the idea
of individualism. “It is not the individual’s independence
from other individuals, but his and their freedom from government
restraint,” he wrote. “Traditionally, the people have
tended to minimize collective organization as represented by the
state while exercising the largest possible liberty in forming their
own voluntary associations.”
This ingrained self-reliance, rather than reliance on government,
is still an American trademark. Americans participate in more civic
organizations and give more generously of their time and money to
public causes than citizens in other major nations, according to
international studies done in the 1990s. “Nothing sets this
country as much apart from the rest of the Western World as its
almost instinctive reliance on voluntary, and often spontaneous,
group action for the most important social purposes,” Peter
F. Drucker wrote in his 1993 book, The Ecological Vision: Reflections
on the American Condition.
In some parts of the world, such as the former Soviet Union, voluntary
associations were banned and charities nationalized during the Communist
period. Now, we’re seeing these countries make efforts to create
civil societies and philanthropic enterprises. Though currently
small, these efforts are stimulating citizen participation and strengthening
their communities and democracies. In other developed nations, voluntary
associations and philanthropy are growing rapidly despite lingering
cultural barriers. Many Europeans, for example, are still accustomed
to the state providing most of the services and amenities of a modern
society—and, in return, collecting very high taxes. “People
first ask, what can the state do; and only secondly do they ask,
what they can do themselves,” Winfried Ripp, head of Dresden’s
Community Foundation, recently told the Christian Science Monitor.
According to a German study in 1997, American citizens gave, on
a per capita basis, nearly seven times as much as their German counterparts
and about six times as many Americans as Germans did volunteer work,
after accounting for differences in population size.
Nonetheless, all over the world citizens are taking greater responsibility,
fueling an explosive growth of nonprofit organizations in recent
decades. In their 1999 book, Global Civil Society: Dimensions
of the Nonprofit Sector, Lester M. Salamon, Helmut K. Anheier
and their co-authors say that a “global associational revolution”
appears to be underway. All over Europe, for example, citizens’
associations have grown rapidly in the last three decades. Even
Hungary had more than 13,000 associations within two years after
Communism collapsed. The authors also note the paradox that new
nonprofits in Central and Eastern Europe actually receive more support
from philanthropy, on a percentage basis, than do American nonprofits,
presumably because the new nonprofit organizations in these countries
have not yet learned how to generate more income from charging fees,
which is the primary source of income for U.S. nonprofits. Interestingly,
four nations—the Netherlands, Ireland, Belgium and Israel—had
such well-developed civil societies in 1995 that they actually had
a higher percentage of their citizens employed by nonprofit organizations
than did the United States, which had 7.8 percent of its citizens
employed by nonprofits (almost 1 in 12, either as an employee or
a volunteer). The authors attributed the growth of nonprofits around
the world to increasing doubts about the exclusive capability of
a state to cope with societal problems, the communications revolution
and the expansion of a middle class that is frustrated by slow economic
and political progress.
In Britain, there are also signs of a growing philanthropic ethic.
In an effort to promote American-style philanthropy, the government
recently launched a publicity campaign called Get Britain Giving
and enacted a tax law that encourages donations. Universities such
as Oxford, Cambridge and the London School of Economics have also
begun efforts to create a tradition of giving by graduates, corporations
and foundations. “We in Britain do indeed have a long way to
go before we can match the culture of giving in America,” D.
Duncan Rice, principal of the 500-year-old University of Aberdeen,
Scotland, wrote in a recent essay. Referring to the university’s
campaign to raise about $215 million by 2010, he added: “Seen
through American eyes it may seem trivial, but it is regarded by
many in this country as being ambitious to the point of frivolity.
The same is true of all sorts of other civilizing institutions from
which the welfare state is retreating, but which private philanthropy
must move to support.”
In America today, philanthropy is woven almost invisibly into the
cultural fabric. Of course, we see some spectacular displays of
generosity from donors like Mrs. Vincent Astor, Paul Mellon, Walter
Annenberg, David and Laurence Rockefeller, J. Paul Getty, George
Soros, Bill Gates, Ted Turner, David Packard, William Hewlett, Mrs.
Irene Diamond, Agnes Gund, Teresa Heinz and Dorothy and Lewis Cullman.
The honor role of major benefactors is far too long to include here,
but some exemplary members are Michael Bloomberg, Bob and Larry
Tisch, Elaine and Jim Wolfenshon, Sandra Priest Rose and the late
Fred Rose, John Loeb, Maurice Greenberg, Jack and Lewis Rudin, John
Whitehead, Ken Dayton, Henry Kravis, Ronald and Leonard Lauder,
Leon Levy, Alan C. Greenberg, Harold W. McGraw, Jr., John Huntsman,
William E. Simon, Sandy Weill, Edith and Henry Everett, Thomas Watson,
Jr., the late Richard Salomon, Artemis Joukowsky, the Gottesman
family and Joseph J. Jacobs. (In 1996, Jacobs, founder of a global
construction company, wrote an influential book about using conservative
means to reach liberal goals in education, the environment and other
areas. The book’s title? The Compassionate Conservative.) And
last, but not least, are the Chicago families of Crown and Pritzker.
Recently, this roster of philanthropy was joined by Claudia Coleman
and William T. Coleman III, founder of BEA Systems (who gave $250
million to the University of Colorado); Leonard Riggio, founder
and chairman of Barnes & Noble, Inc. ($25 million to the Dia Center
for the Arts); Margaret McDermott, the widow of Texas Instruments’
founder ($32 million to the University of Texas at Dallas); John
Kluge, Metromedia’s founder ($60 million to the Library of
Congress); and Kenneth Behring, the real estate developer ($80 million
to the National Museum of American History).
Yet philanthropy in America is not only about big names and big
fortunes, it is about individuals and their endless surprises.
There is Oseola McCarty, the 87-year-old laundress, who gave her
life savings of $150,0000 to the University of Mississippi for scholarships.
In 1995, she said, “I’m giving it away so the children
won’t have to work so hard, like I did.” There is Karen
Pittelman, a 25-year-old poet who recently used most of her $3 million
inheritance to start a Boston foundation that helps low-income women
pull their lives together. At the time, she said, “Turning
my inheritance into this foundation was the way I claimed my responsibility
to this community.” And there is Aubyn Burnside, who was 10
years old in 1995 when she learned that foster children tend to
live nomadic lives, moving from one home to another, toting their
belongings in black garbage bags. Six years after Aubyn’s first
collection drive for suitcases in North Carolina, her charity—called
Suitcases for Kids—has chapters in every state and nine foreign
countries. “I thought it was horrible that the children had
nothing to carry their things in as they moved so many times,”
said Aubyn. “I wanted to make them feel special by giving them
something of their own to keep.”
Such beneficence often snowballs across the continent, as inspirational
stories inspire Americans to get involved themselves. Generosity
is even an organizing principle of the way we socialize, frequently
combining fun and glamour with good deeds. Literally millions of
benefits take place annually, and they range from school fairs to
fund field trips to celebrity galas for AIDS charities.
Hollywood is better known for lending celebrity names to public
causes than it is for celebrities’ parting with their fortunes.
But there are shining exceptions and the list is growing. Paul Newman,
of course, created Newman’s Own food label and has given away
the company’s profits of more than $100 million since 1982.
Among the contributions Bill and Camille Cosby have made to educational
institutions is a $20 million gift to Spelman College. Steven Spielberg’s
generosity includes establishing the Righteous Persons Foundation,
which has distributed $37 million in profits from “Schindler’s
List” to promote and support Jewish causes and cultural and
historic activities. Now, we are seeing the beginning of philanthropic
giving by many other celebrities; among those who have established
foundations, albeit on a much smaller scale, are Kirk Douglas, Richard
Gere, Johnny Carson and Rosie O’Donnell. Hopefully, they are
setting enduring examples.
The number of people establishing foundations has reached the point
that the pros and cons of doing so are covered by magazines and
newspapers in their year-end tax guides. (“In fact, private
foundations can work well for families who want to donate assets
of at least $1 million for a foundation in their name with a specific
charitable mission,” Forbes magazine advised this year.)
There is also a whole cottage industry of companies and nonprofits
that have emerged to simplify the process.
Giving is so mainstream in America that even politicians are expected
to be generous—and they are taken to task if their giving to
charity and philanthropy represents an insignificant percentage
of their incomes. Whether running for president or mayor, candidates’
giving has become an indicator of character, publicly discussed
and often ranked.
Businesses are also discovering that giving is good for business
and public relations as well as good for making them part of the
community of responsible citizens. Many companies have, of course,
been generous for a very long time. In Worth magazine this
year, Nelson W. Aldrich, Jr., wrote about trends in corporate generosity.
In the magazine’s ranking, created jointly with the Council
on Economic Priorities, the four most generous companies in 1998
were: 1) the Bank of America, which gave charities $91 million in
cash gifts and, among other things, gave its employees a day off
to do volunteer work in communities around the world, 2) General
Motors, with contributions totaling $74 million, mostly in support
of scholarship funds and educational programs, 3) Johnson & Johnson,
which awarded $67 million, largely to programs in minority neighborhoods,
and 4) Philip Morris, giving away $60 million, including substantial
sums for anti-hunger campaigns. Aldrich noted that Philip Morris
has been simultaneously spending about $100 million a year to advertise
its philanthropic work, but he concluded, “Regardless of the
motive, the results still have value.”
While more companies are giving, and their total giving has risen,
their generosity has not kept pace with the growth of their profits.
Their gifts climbed past 1 percent of pre-tax income in 1970, peaked
at 2.3 percent in the early 1980s and then leveled off to the current
rate of just over 1 percent, according to estimates by the Council
for Aid to Education. In view of this decline, Worth magazine created
another honor role that ranked companies by the proportion of income
they gave to charity and philanthropy. Champion International, the
paper and forest products company, was the top “profit sharer,”
giving $8 million in gifts, or 6.6 percent of its average pretax
earnings. Humana, the managed-care company, ranked second and Owens
Corning, the building-materials manufacturer, ranked third. Remarkably,
Owens had given more than a million dollars a year for three years,
including two years when the company had losses.
While the business world is still trying to compute the costs and
benefits of corporate citizenship, the bottom line is looking good.
As an analysis by The Economist magazine concluded in 1999: “Companies
with an eye on their triple bottom line—economic, environmental
and social—outperform their less fastidious peers on the stock
market.” Indeed, more and more companies are seeing profit
in philanthropic principles, according to Rosabeth Moss Kanter,
a professor of business administration at the Harvard Business School.
In a 1999 Harvard Business Review article, entitled: “From
Spare Change to Real Change: The Social Sector as Beta Site for
Business Innovation,” she wrote:
“Today, leading companies are beginning to find inspiration
in an unexpected place: the social sector—in public schools,
welfare-to-work programs and the inner city. These companies have
discovered that social problems are economic problems, whether it
is the need for a trained workforce or the search for new markets
in neglected parts of cities. They have learned that applying their
energies to solving the chronic problems of the social sector powerfully
stimulates their own business development...Tackling social sector
problems forces companies to stretch their capabilities to produce
innovations that have business as well as community payoffs...This
is not charity; it’s R & D—a strategic business investment.”
If philanthropy is good for the bottom line, so much the better
for humankind. There are many indications that giving is becoming
part of the business culture, further nationalizing American philanthropy.
Many companies pay nonprofits for the right to use their name—like
Johnson & Johnson’s use of the World Wildlife Fund’s logo—as
a way to make their products more appealing to consumers. Cause-related
marketing works, too, according to business studies that have found
that most consumers will switch to a brand that supports a good
cause, if other things like price and quality are equal. Citibank
is building its customer base in another innovative way: by generously
funding a nonprofit organization that provides loans and financial
advice to low-income people.
The shortage of skilled workers has also quickened corporate interest
in education. As a result, middle-schoolers in Warren, Ohio, sharpen
math skills by solving real-world engineering problems in a nationally
recognized curriculum developed by General Motors. An executive
from Verizon chairs the board of Delaware’s top performing
public high school, a charter school in Wilmington.
Some business executives have become exemplary leaders in school
reform. Eli Broad, chairman of SunAmerica Inc., the financial services
company, donated $100 million in 1999 for a nationwide campaign
to improve urban school management. Two other executives have each
raised millions of dollars to improve schools, worked closely on
national efforts to improve schools and written extensively on education.
They are IBM’s chairman and chief executive officer Louis V.
Gerstner, Jr., and David T. Kearns, formerly chairman and chief
executive officer of the Xerox Corporation and Deputy U.S. Secretary
of Education in President George Bush’s administration.
Gerstner gained insight into school reform when, as chairman and
chief executive officer of RJR Nabisco in the early 1990s, he oversaw
the corporate foundation’s investment of $30 million in improving
43 schools across the country. In 1994, he co-authored a book, Reinventing
Education: Entrepreneurship in America’s Public Schools,
that makes the case that the core problem is that “schools
as institutions have lacked the mechanism for self-renewal.”
The RJR Nabisco Foundation was also an early investor in New American
Schools, a nonprofit organization founded in 1991 by Kearns with,
ultimately, more than $140 million in corporate contributions. The
nonprofit school reform organization has become a potent force behind
the comprehensive school reform movement in nearly 10 percent of
all public schools today. Kearns, now chairman emeritus of New American
Schools has just co-authored his second book on school reform, entitled
A Legacy of Learning: Your Stake in Standards and New Kinds of
Public Schools. The book argues that standards are not sufficiently
clear or high.
In the final analysis, though, what really makes American philanthropy
triumphant is its grassroots nature. Whether rich or poor, most
Americans participate in philanthropy by volunteering their time
and money to causes ranging from highway litter patrols to Amnesty
International. In 1998 alone, 56 percent of adults volunteered and
70 percent of households made contributions, according to a recent
study by the Independent Sector. The voluntary effort that year
translated into $138 billion in individual gifts and nearly 20 billion
hours of volunteer work. The United Way, alone, received more than
$3 billion in gifts that year for its member nonprofit organizations
and countless millions of hours of volunteer work.
And, contrary to conventional wisdom about who makes the most sacrifice,
the study revealed that low-income people donate a disproportionately
larger percentage of their income than do the wealthy. Breaking
down demographics still further, single women are more likely to
give than single men, African Americans are more likely to give
than whites and older Americans are more likely to give than any
other age group, according to a recent report by the Council of
Economic Advisers.
As for young, hopefully budding philanthropists, a 1998 New York
Times/CBS survey found that 58 percent of teenagers reported
doing volunteer work in the prior year. On college applications
and resumes, young people reflect the values of our culture by routinely
including these volunteer experiences as evidence of their good
character. In a similar vein, the Girl Scouts of the USA this year
introduced a new honor patch—called “Strength and Sharing”—to
recognize girls’ efforts in community philanthropy. In Michigan,
public schools are introducing a curriculum for children in grades
KŒ12 that teaches the powerful history and impact of philanthropy.
In California, KŒ8 teachers in Santa Barbara can receive grants
for programs and projects that instill the ethic of service and
philanthropy. The new program, supported by the Santa Barbara Foundation,
was recently launched with a preview of the film, "Pay It
Forward," staring Kevin Spacey, Helen Hunt and Haley Joel
Osment. The school program and the film’s plot have much in
common: in both, children are urged to dream up philanthropic projects
to improve their communities.
With all these manifestations of generosity, it is not surprising
that philanthropy and charity are now at record-breaking levels.
According to estimates published in Giving USA, the total amount
of giving from all sources in 1998 was $174.5 billion. That included
about $9 billion from corporations and corporate foundations, nearly
$14 billion from bequests, about $17 billion from independent and
community foundations and the remainder from individual gifts. Overall,
there was an 11 percent increase, and it was the third year in a
row with a double-digit increase. In 1998, nearly 44 percent of
all this giving went to religious institutions for sacramental purposes,
charity and education.
Philanthropy’s support for the nonprofit sector has strengthened
as foundations themselves have grown stronger. Giving USA
reports that foundation expenditures increased by nearly 250 percent,
after adjusting for inflation, between 1975 and 1998, and this far
outpaced the growth in giving from other private sources. The increase
reflects a boom in new foundations: About 1,000 new foundations
are created every year, adding to the 54,000 private foundations
that already operate in the United States. In addition, gifts have
flooded into the new charitable trust funds managed by Wall Street
firms during the last decade. Fidelity, alone, manages over $2.3
billion for 22,000 donors, making it the nation’s 10th largest
charity.
The societal benefits of all this philanthropy are beyond measure—and
statistics, while impressive, can only give hints. American generosity
toward higher education, for example, is unrivaled in the world.
In 1999, college and university endowments exceeded $195 billion,
according to a study conducted by the National Association of College
and University Business Officers of 503 major public and private
institutions of higher education. Philanthropy also provides significant
support to the nation’s nonprofit sector, which includes approximately:
• 1,500 international human rights and relief organizations
• 4,400 environmental organizations
• 17,000 arts and culture organizations — including 2,000
museums
• 23,500 education institutions
• 28,000 health organizations, including 3,200 hospitals
• 55,000 human service organizations
All told, there are about 1.4 million nonprofit organizations, not
including religious institutions. This sector provides a significant
share of the nation’s low-income housing, a substantial amount
of its higher education and research institutions and a critical
component of KŒ12 education, as well. Our nonprofits provide half
of the nation’s health care, most of its human services and
almost all of the arts. Nonprofits address the needs of under-served
and disadvantaged populations by providing billions of dollars in
services and programs. This sector tackles complex social problems
that other sectors are either unwilling or unable to address. In
all of these areas, philanthropies help nonprofit organizations
develop innovative programs. It has been said that philanthropies
and their nonprofit partners are the research and development arm
of our society.
New Philanthropies, New Perspectives
Here, at the turn of the century, America has witnessed unprecedented
prosperity. In 1999, there were an estimated 7.2 million millionaires,
more than double the number five years earlier. In 2000, American
households held more than $50 trillion in assets, up from just over
$30 trillion in 1990 and $20 trillion in 1980, according to Hudson
Institute estimates.
With this instant wealth, we have witnessed growing demand for instant
philanthropy, as well. We live in an impatient culture that celebrates
fads, quick fixes and instant fame. This instant culture is at odds
with a world where there are so many chronic needs and entrenched
problems. There are, of course, many pressing concerns that can
be addressed immediately. But we need to differentiate between problems—minor
or major, simple or complex, temporary or enduring, actual or potential—and
use different strategies to deal with them all. Philanthropies must
not fall prey to demands for instant solutions, hurriedly “solving”
problems and moving on.
Difficult problems, by definition, resist quick and easy solutions.
Searching for cures for cancer, trying to reduce racism or deterring
ethnic violence abroad are the kinds of problems that require long-term,
patient attention, multiple approaches and risk taking that may
result in failure. As urgent as such problems are, we must be patient
because progress is not always readily measured. Philanthropies
have to make long-term investments in the creation of knowledge,
both theoretical and applied. Our impatient society might like to
skip the “theoretical stuff,” but theory often precedes
practical knowledge. And big ideas generally evolve from small ideas,
and small ideas, from smaller ones, still. So there really is no
such thing as useless knowledge, as the legendary educator Abraham
Flexner argued in his essay, appropriately entitled, “The Usefulness
of Useless Knowledge.”
Foundations are in the business of investing in social capital;
hence, the necessity of taking risks. Therefore, we must be fearless
about risks, even failure. Unanticipated failure is often to be
expected as an inevitable part of the discovery process, part of
learning what not to do again and, thus, part of making progress.
In his instructions to trustees almost a century ago, Carnegie exhorted
them to be iconoclastic: “Remember you are pioneers, and do
not be afraid of making mistakes; those who never make mistakes
never make anything. Try many things freely, but discard just as
freely.”
In this discovery process, philanthropies must often invest in countless
efforts, experiments and model programs before anything can be attempted
on a larger scale. In 1959, John Gardner, a former president of
Carnegie Corporation, described the often torturous path the search
for knowledge takes: “The bright new idea may prove to have
more novelty than validity; the ‘pioneering’ venture may
bog down; the research program may yield negative results, but foundations
which engage in support of such efforts must be prepared to take
these chances. It is in this sense that they regard their funds
as ‘venture capital.’”
Today, some newcomers to philanthropy actually come from venture
capital firms and are applying their business acumen to what they
call venture philanthropy. Although new to philanthropy, they are
following in the footsteps of Carnegie, Rockefeller, Ford and Morgan,
who also infused their philanthropic enterprises with the expertise,
energy and imagination that served them so well in business.
Venture philanthropy brings a welcome new set of strategies to grantmaking.
Unlike traditional philanthropies, which make grants to a great
many capable organizations with promising proposals, the new philanthropists
work intensely with relatively few nonprofit organizations. Traditional
foundations fund projects and give free rein to the experts to develop
their ideas independently; new foundations often join the boards
of directors and may provide day-to-day financial and management
support. And while established foundations commonly invest in creating
knowledge that may not pay dividends for years or even decades,
venture philanthropies tend to restrict their investments to worthy
causes with outcomes that can be readily measured.
One of the pioneers in venture philanthropy is the Roberts Foundation,
which was established by the leveraged-buyout expert George R. Roberts
and his wife Leanne in 1986. A recent profile of the foundation
in The New York Times described some of the innovative business
practices the foundation uses to stretch the value of each philanthropic
dollar. In one program, the foundation has helped develop 23 nonprofit
businesses that employ people who are homeless, have mental illnesses,
or are recovering drug addicts. To determine which philanthropic
investments are the most promising, Jed Emerson, a program officer
with an M.B.A., analyzes each organization’s financial information,
social service results and participants’ responses on questionnaires.
From this analysis comes a bottom line number, called the “social
return on investment,” that can add efficiency to the foundation’s
management and investment activities. Emerson told the Times
that the management model might take a decade to refine, and distanced
himself from overblown rhetoric about venture philanthropy: “We’re
certainly not saying this is God’s gift to philanthropy.”
As Emerson’s comment suggests, some of the excitement surrounding
venture philanthropy has boiled over, creating unrealistic expectations
for it and setting up a false competition between “new”
and “old” philanthropies. But in philanthropy, as in all
fields, solutions of one size do not fit all problems. At the same
time, both new and old philanthropies have much to learn from each
other. Rather than allowing themselves to be pushed into a competition,
they should initiate cooperative and collaborative relationships.
Such interplay encourages renewal in all institutions and prevents
them from becoming ossified—today’s new philanthropy,
after all, is tomorrow’s old establishment. Philanthropies,
new and old, have an obligation to share information about where
they have succeeded and where they have failed so others can avoid
waste and invest more wisely.
Speaking of “old philanthropy” as though it were a monolithic
enterprise is, of course, simplistic. American philanthropy’s
strength, after all, does not lie in its uniformity, but in its
diversity. This diversity has regional, ethnic, racial and gender
components. Philanthropies approach causes galore, and see problems
from many different perspectives, ideologies, methodologies and
strategies. Such differences are necessary and healthy, especially
since they all reach for the same goals: namely, they all want to
advance knowledge, promote understanding and improve the human condition.
They all want results, short term or long term. They all want to
make a difference. They all believe in accountability. They all
believe in revitalizing their communities, engaging their communities,
and participating in their communities’ future. All of this
strengthens our democracy.
As Robert Louis Stevenson wrote, “Don’t judge each day
by the harvest you reap, but by the seeds you plant.”
Challenges and Responsibilities
Having served at the helm of four nonprofit organizations, I have
seen the impact of American philanthropy from many angles. I am
awed by its scope, its range and its depth. But I am also cognizant
of the challenges and responsibilities it faces, and I would like
to mention two of them in closing.
As Andrew Carnegie saw himself as a trustee of public wealth, I
see foundations as stewards of public trusts. After all, philanthropies
have historical, legal and moral obligations to society as well
as to their founders. They are entrusted with the administration
of considerable wealth—totaling some $385 billion in 1999.
This wealth was given to them for specific purposes and time periods.
That means they must remain faithful to their missions and be as
open as possible in their work. Or, as a former Carnegie Corporation
trustee put it, philanthropies “should have glass pockets.”
That is necessary because donors enjoy favorable tax policies, and
philanthropies enjoy tax exemptions, thanks to the unique American
compact between public and private sectors. This compact is very
strong, but it cannot be taken for granted. It is based on philanthropies’
performance in carrying out their responsibilities.
Philanthropies bear heavy societal responsibilities by virtue of
their wealth, their central role in our civil society and their
power to help or, unintentionally, to harm. They have a moral responsibility
to see that this power is used openly, wisely and responsibly in
upholding society’s values rather than subverting them. Philanthropies’
responsibilities will increase in the coming years as their wealth
increases. It is estimated that as much as $2.7 trillion more will
be entrusted to the nonprofit sector in general, and philanthropies
in particular, during the next twenty years when about $18 trillion
will pass from one generation to the next.
In recent years, estate tax regulations have encouraged this transfer
of money to transfer again: from the heirs of those who create the
wealth to the public arena where nonprofit organizations and foundations
have nurtured and created opportunities in the social, cultural,
scientific, medical, artistic and intellectual lives of communities
across the nation. Though Americans have never needed tax incentives
alone to cultivate their philanthropic yearnings, public policy
has had a direct impact on the growth of the civil sector. Tax regulations
have served as incentives by encouraging those of great wealth to
establish family foundations, donate money to projects that address
great public needs and support local and national institutions central
to the educational and cultural soul of America.
When Andrew Carnegie published The Gospel of Wealth, there
was a major national and even international debate about wealth
and inheritance and the impact of these on society’s welfare.
Some 100 years later, I’m delighted that once again the nation
is discussing the same issues openly and honestly. Such a debate
can help to dispel the public cynicism that people of wealth are
self centered and concerned only with their own welfare.
One hopes, no matter what the outcome of the current debate, that
our public officials will act in the context of a full understanding
of a rich tradition of American philanthropy and its benevolent
impact on our society. One equally hopes that centuries of American
philanthropy will continue to serve as a guide and inspiration to
our current and future generations of benefactors and elected representatives.
Our International Role
A final concern is a global one. We cannot remain an island of prosperity
in the ocean of scarcity. We live in an interdependent world with
more than 6 billion people and we share global obligations. According
to World Bank estimates, 1.2 billion people live on less than $1
a day and an equal number do not have access to clean water; 3 billion
people do not have access to sanitation or adequate housing, and
4.2 billion people cannot read. Less than 1 percent go to college.
It is also evident that epidemics do not recognize frontiers. Neither
does poverty, nor repression, nor natural disaster. Sooner or later,
they become political issues, reaching all of us. We cannot live
in “splendid isolation.”
The fact is, Americans never really have. As a land of immigrants,
the United States has had close ties to other countries and newcomers
have customarily sent portions of their paychecks home to help families
and communities. Citizens’ charity and philanthropy have always
had an international component, as well. In the 1820s, for example,
Americans held charity balls, auctions and fairs to support Greek
independence. In 1846, the citizens of Massachusetts sent six ships
laden with food to help relieve the Irish famine.
Andrew Carnegie was also a pioneer in international philanthropy.
He made his first gift in 1873: $25,000 for “swimming baths”
for his Scottish birthplace, Dunfermline. In later years, Carnegie
strengthened Scottish universities and supported community organizations
throughout Britain. To bring more “sweetness and light”
into the world, he sent 7,634 organs to churches in 13 countries,
including some in Africa and the British West Indies. His grants
supported Madame Curie’s medical research on radium in Paris
and Robert Koch’s studies about tuberculosis in Berlin. His
greatest international concern, of course, was peace. In addition
to promoting international peacekeeping organizations and endowing
four foundations to work indefinitely toward peace, he built three
“temples of peace,” as he called them. They are the Peace
Palace at The Hague, in the Netherlands, the Central American Court
of Justice in San Jose, Costa Rica, and the Pan American Union Building
in Washington, D.C., built to encourage “the union of all the
republics in this hemisphere.” The Pan American Union subsequently
became the Organization of American States.
America was his base, but the world was his range. If I may paraphrase
the saying, “think globally and act locally,” Carnegie
thought globally and acted locally, and he also thought locally
and acted globally.
Throughout our history, in times of war and national disasters,
Americans have risen to the occasion, not confining their charity
to our land alone but to the world at large. During and after World
War I, for example, an American organization called Near East Relief
fed, clothed, housed and provided medical care for some 12 million
refugees, including Armenians, Assyrians, Greeks, Kurds and Turks.
In its charitable and philanthropic work, the foundation became
a prototype for the Peace Corps. Today, we also have CARE, Catholic
Charities, the U.S. Fund for UNICEF, Human Rights Watch, Amnesty
International, International Rescue Committee and scores of other
organizations that are conduits of American generosity to the rest
of the world.
Commerce, technology, media and immigration are increasingly opening
our eyes and hearts to the needs of other peoples, and America is
well on its way to becoming a truly global nation, and a globally
philanthropic one, as well. This is natural, because as decent,
moral and spiritual beings, we have an obligation, whenever possible,
to assist our fellow human beings and help them claim their autonomy
and preserve their dignity. And while our tradition in international
giving has been strong, it cannot but strengthen still more, for
needs grow exponentially.
In this regard, philanthropists like Bill Gates, George Soros and
Ted Turner are providing new models for others to combine national
commitments and international commitments—much in the way Andrew
Carnegie did a century ago. For like Carnegie, they have global
concerns about preventing disease, promoting peace, eliminating
injustices and providing education and learning.
So, as we celebrate the centennial of Andrew Carnegie’s philanthropy,
I’d like to take the occasion to remind us all that while charity
begins at home, it does not stay at home.
In surveying American philanthropy I am reminded of two biblical
injunctions: to whom much is given, much is expected; and another,
favored by Saint Francis of Assisi, that it is in the giving that
we receive. After all, altruism is a form of social cement for communities,
locally, nationally and globally, and it doesn’t matter whether
the giving is in the form of charity or philanthropy. One cannot
but witness how philanthropy ennobles us, brings out our best nature
and allows us to transcend the limits of space, time, class, race,
ethnicity and gender to become part of the larger community and
of humankind. Philanthropy marks our place in history and, hence,
ties us to the future. It saves us from becoming captives of a self-serving
present. And let us not forget there is a joy in giving. As Victor
Hugo once wrote, “As the purse is emptied, the heart is filled.”
ENDNOTES
1 Actually, by the time Andrew Carnegie placed the bulk
of his fortune in one philanthropic organization—Carnegie Corporation
of New York—he had created so many other institutions that
he had used up all the conventional labels (foundation, endowment,
trust, etc.), which meant that the Corporation received a name that
is not really indicative of its mission or activities.
2 I have discussed details of our program in other essays:
“Some Preliminary Thoughts,” 1997; “Libraries and
Andrew Carnegie’s Challenge,” 1998, and “Strengthening
Scholarship and Research in the Former Soviet Union,” 1999.
SOURCES
BOOKS
Andrew Carnegie, Triumphant Democracy; or, Fifty Years' March of
the Republic. New York, Scribner, 1886.
Andrew Carnegie, “Memorandum of 1868” in Wall, p. 224-25
Robert H. Bremner, American philanthropy. 2nd ed. Chicago: University
of Chicago Press, 1988.
Robert H. Bremner, Giving : Charity and Philanthropy in History.
New Brunswick, NJ,: Transaction Publishers, 1996.
A Carnegie Anthology, arranged by Margaret Barclay Wilson. New York,
Privately Printed, 1915.
M.J. Cohen, The Penguin Thesaurus of Quotations. New York: Penguin
Books, 2000
Hugh Cunningham and Joanna Innes (editors), Charity Philanthropy
& Reform: From the 1690s to 1850 . New York, NY: St. Martin's Press,
1998.
Alexis de Tocqueville, Democracy in America. New York: Vintage Books,
1990.
Peter F. Drucker, The Ecological Vision: Reflections on the American
Condition. New Brunswick, NJ: Transaction Publishers, 1993.
Louis V. Gerstner, Jr. et al., Reinventing Education: Entrepreneurship
in America's Public Schools. New York: Dutton, 1994.
Giving USA. 2000. New York, NY: American Association of Fund-Raising
Counsel Trust for Philanthropy.
Simon Goodenough, The Greatest Good Fortune: Andrew Carnegie's Gift
for Today. Edinburgh, Scotland: Macdonald, 1985.
Joseph J. Jacobs, The Compassionate Conservative: Seeking Responsibility
and Human Dignity Lafayette, LA: Huntington House Publishers, 1996
Peter Kemp (ed.), The Oxford dictionary of literary quotations .
New York: Oxford University Press, 1997
David T. Kearns and James Harvey, A legacy of learning : your stake
in standards and new kinds of public schools. Washington, DC: Brookings
Institution Press, 2000.
Everett Carll Ladd, The Ladd Report. New York, NY: Free Press, 1999.
Ellen Condliffe Lagemann (ed.), Philanthropic Foundations : New
Scholarship, New Possibilities . Bloomington, Ind.: Indiana University
Press, 1999.
Nonprofit Almanac: Dimensions of the Independent Sector. 1996-97.
San Francisco, CA: Jossey-Bass, 1996 Lester M. Salamon, Helmut K.
Anheier, Regina List, Stefan Toepler, S. Wojciech Sokolowski and
Associates. Global Civil Society: Dimensions of the Nonprofit Sector.
Baltimore, MD: Johns Hopkins Comparative Nonprofit Sector Project,
1999.
Adam Smith, The Theory of Moral Sentiments. Amherst, NY: Prometheus
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Joseph Frazier Wall, Andrew Carnegie. New York, Oxford University
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ARTICLES
“The 50 Largest US Charities Ranked by Total Income,”
The Christian Science Monitor, December 4, 2000, p. 16
“Business This Week,” Economist September 11, 1999, p.
24
“Democracy in the World: Tocqueville Reconsidered” special
issue of Journal of Democracy Vol. 11, No. 1 (January 2000)
“No Scrooges Here,” Business Week, December 18, 2000,
p. 12
Nelson W. Aldrich, Jr. “America’s Most Generous Companies,”
Worth December/January 2000, p. 148
Rebecca Carr and Steve Bennish, “Some 'Nonprofits' Outearn
Businesses,” Dayton Daily News, October 8, 2000, Pg. 1A.
Bill Cirone, “A Community of Caring and Sharing,” Santa
Barbara News-Press, October 1, 2000.
Natasha Clerihue, “The Philanthropy of the Celebrity Left:
Entertainers Embrace New Legal Rights, Faddish Causes” Foundation
Watch, January 2000
Ashlea Ebeling, “Keeping Up With The Gateses,” Forbes
December 11, 2000, p. 274
Rosabeth Moss Kanter, “From Spare Change to Real Change: The
Social Sector as Beta Site for Business Innovation, ” Harvard
Business Review, May - June 1999.
Omar Sacirbey, “Charities pick up where German state left off,”
The Christian Science Monitor Dec. 7, 1999, p. 7
Silja J.A. Talvi, “The New Face of Philanthropy,” Christian
Science Monitor, July 31, 2000, p. 13.
Jay Tokasz, “Putting a Cold, Hard Number on the Value of Good
Works,” The New York Times, November 20, 2000, Section F; Page
30.
WEB SITES
Kenneth Behring see http://www.americanhistory.si.edu/media/pr000919.htm
The Board Foundation http://www.broadfoundation.org/
Aubyn Burnside see http://www.suitcasesforkids.org/history.htm
The Century Foundation.The Fund's First 75 Years (1919-94) http://www.tcf.org/About_TCF/History.html
“A Double Digit Decade for College and University Endowments:
Institutions Hold More Than $195 Billion” NACUBO press release
February 11, 2000. Endowment Study with preliminary results in PDF
format. http://www.nacubo.org/accounting_finance/endowment_study/content.html
Encyclopædia Britannica on-line http://www.britannica.com/
Abraham Flexner, “The Usefulness of Useless Knowledge”
http://www.admin.ias.edu/pr/newsletter/spring98content.htm
“Foundations’ Share of Private Philanthropy, 1998”
http://fdncenter.org/research/trends_analysis/pdf/fy_ch1.pdf
“Fundraising for a better Britian” in Donating Shares
(2000) University of Aberdeen. http://www.abdn.ac.uk/devtrust
“GM Skilled Trades and Engineering: Explore the Possibilities”
http://www.cae.org/leadersforchange/lfcentrants.html#General
Motors Corporation (1994)
History of Gallaudethttp://pr.gallaudet.edu/VisitorsCenter/GallaudetHistory/index.html
Giving and Volunteering in the United States: Findings from a National
Survey. 1999 Edition. Executive Summary, Washington, DC.: Independent
Sector, p. 1. Online: http://www.independentsector.org/GandV/s_keyf.htm
“Giving Through United Way Soars to $3.77 Billion” Press
Release August 8, 2000. and “The Future of United Way, Part
I” http://nonprofit.about.com/careers/nonprofit/library/weekly/aa010598.htm
Harvard University "Quick Facts" http://www.news.harvard.edu/glance/
John Kluge see http://www.loc.gov/today/pr/2000/00-155.html
Paul Newman see http://www.newmansown.com/2-home.html
“Near East Relief and the Armenian Genocide” http://www.armenian-genocide.org/encyclopedia/ner.htm
New York Public Library. General Information. http://www.nypl.org/admin/pro/nypl.info.html
“Oseola McCarty's Life to be Celebrated” http://www.pr.usm.edu/OOLAFUN.HTM
About Penn: A Historical Perspective http://www.upenn.edu/about_penn/history.html
Leonard Riggio see http://www.state.ny.us/governor/press/year00/june2_00.htm
and http://www.diacenter.org/dia/funding/
Roberts Foundation see http://www.pacificfoundationservices.com/roberts/
Russell Sage Foundation http://www.russellsage.org/about/about_us.htm
Stanford University History http://www.stanford.edu/home/stanford/history/
Statistical Summary of Yale University http://www.yale.edu/oir/factsheet.html
Teachers Insurance and Annuity Association of America-College Retirement
Equities Fund (TIAACREF) http://www.tiaacref.org/
“Sunamerica Chairman Eli Broad Announces New Role: Broad to
Expand Focus on Philanthropic and Civic Activities” Press Release.
September 14, 2000. http://www.sunamerica.com/InFocus/News/2000PressReleases/000914.htm
The White House Conference on Philanthropy , October 22, 1999, p.
12. Online: http://clinton4.nara.gov/media/pdf/philanthropyreport.pdf
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