To start narrowing our country’s extreme wealth gap and repair our weakened social fabric, we desperately need a host of strong new social programs, including more effective schools and colleges, better job opportunities and training, and truly affordable health care for working families. And yet with its bitter partisan divide, Washington is paralyzed when it comes to addressing these and so many other great challenges facing our democracy.
I served two terms as governor of New Jersey as a Republican, and I know what can be accomplished when both parties come together. Not long ago, the government implemented a wide range of far-sighted programs — such as Head Start to provide preschool education for lower-income children; Pell Grants to make college more affordable; and even PBS, which offers creative, high-quality television. Could Congress pass and launch these life-changing programs today? The answer is an emphatic “No!” — and that is deeply troubling.
Who will design and fund the big ideas that allow Americans to lead the kinds of productive lives that have historically made our democracy and economy the envy of the world? The answer: Our country’s great philanthropic institutions — the same ones that have recently come under so much fire for their perceived high-handedness — must fill the void left by a gridlocked government.
Subscribe today to receive more stories from the Carnegie Reporter
Even when the government has functioned better, it was grantmaking foundations such as Carnegie Corporation of New York that funded the research for Head Start, Pell Grants, and public television before those efforts moved into the realm of public policy. There are numerous other inspiring examples. The Robert Wood Johnson Foundation helped fund development of the 911 emergency call system, the Ford Foundation supported legal-aid programs that led to the introduction of public defenders, and The Rockefeller Foundation helped launch the public-private partnership that led to the International AIDS Vaccine Initiative.
It’s not just frustration with the current political climate that has moved me to these reflections. This year marks the centenary of the death of Andrew Carnegie, the American industrialist who donated nearly his entire fortune to establish more than 20 institutions (which still bear his name) devoted to improving education, strengthening our democracy, and promoting international peace. The anniversary prompts me to ponder both Carnegie’s legacy and the critical role philanthropy plays in our society.
Concerns of Critics
I chair the Carnegie Corporation of New York’s board of trustees, just one of the many philanthropic institutions that I have helped lead over the years in areas including health care and environmental protection. I have seen firsthand their immensely positive work in convening our best minds, building consensus, helping to develop critical programs, and then funding the organizations that implement them.
There has, of course, been criticism of philanthropic institutions, much of it worth careful consideration. Foundations must continually review and renew their missions, their priorities, and their performance standards. They must expand the diversity of their boards and staff to ensure that they have the best possible teams. Their programs must adapt to the needs and aspirations of our dynamic and rapidly changing society. They must continue to maintain a high degree of transparency in how they conduct their grantmaking.
Andrew Carnegie launched Carnegie Corporation of New York in 1911 out of his remarkably prescient concern that the concentration of great fortunes in a few hands created distrust between economic classes and undermined social cohesion.
Some critics question the motivations of wealthy individuals who establish foundations, suggesting they are more interested in the tax benefits or in advancing personal agendas than in serving the needs of our society. Foundations and nonprofits have a responsibility to address these concerns while continuing to support this distinctly American tradition of giving.
Andrew Carnegie launched Carnegie Corporation of New York in 1911 out of his remarkably prescient concern that the concentration of great fortunes in a few hands created distrust between economic classes and undermined social cohesion. He laid out his philosophy in his famous 1889 essay “The Gospel of Wealth,” in which he argued that the rich should not simply pass on their wealth to their heirs.
Rather, Carnegie urged them to reinvest their wealth in society through philanthropy. To him, the true solution was to contribute to organizations administering their funds in ways “best calculated to produce the most beneficial results for the community” — in institutions such as public libraries, medical schools, public parks, and universities. The aim was a society in which “surplus wealth” would be “administered for the common good.”
Lessons from Andrew Carnegie
Today, the country’s ultrawealthy, who have benefited most from the last decade’s prosperity, might learn from Carnegie’s example. According to a recent study by the consulting firm Bridgespan, they are donating only a paltry 1.2 percent of their assets annually. The study concluded that simply doubling this amount would increase social mobility and eliminate disease for millions.
Overall, we are fortunate because no other country has anything like America’s robust culture of giving: about half of us make charitable donations each year. In total, an estimated $428 billion went to U.S. charities in 2018, according to the Giving USA foundation. That’s up an astounding 48 percent increase from $288 billion in 2010. But clearly, we could do even more.
Andrew Carnegie exhorted the rich to give their fortunes away while they were still alive as he did — a revolutionary concept at the time — writing in his landmark essay: “The man who dies thus rich dies disgraced.” Perhaps the real disgrace is doing nothing at all. In a time of governmental inaction, wealthy individuals and philanthropic institutions must work even harder to bring back the big ideas — and the will to make them real.
First published in the Chronicle of Philanthropy and republished with permission.