Philanthropy and Philanthropic Foundations. John
Winthrop, governor of the Massachusetts Bay Colony, dreamed of a “City on a Hill”: an ideal society of Puritan saints imbued with a religious obligation to do good. This vision soon faded with the rise of cities, commerce, and trade, but the idea of the New World as a place where people not only pursued their own interests but also helped others took deep root. In common with the practice of a minority of the rich for centuries, colonial American philanthropy included efforts by the wealthy to create worthy memorials to themselves. When, in 1638, John Harvard bequeathed £780 and a collection of four hundred books to a new college recently established in Cambridge, Massachusetts, which was promptly named Harvard College in his honor, he was only one of hundreds of prosperous colonists who endowed libraries, reading societies, schools, and other institutions that benefited their communities while perpetuating their benefactors' names.
By the eighteenth century, charitable activities in the colonies also included something more uniquely American that Europeans noted with curiosity: institutions to which large numbers of individuals of relatively modest means contributed. By the end of his life Benjamin
Franklin was one of the country's most famous and wealthy men, but long before, while still a little‐known printer of modest means, Franklin had enthusiastically subscribed to voluntary associations like the Philadelphia Free Library created to encourage self‐improvement among “middling” people like himself without inherited money or important social contacts. In doing so, he typified an idea more enthusiastically promoted in America than anywhere else at the time: that not only rich people should do good works, but that entire communities should organize philanthropically. By the time of the
Revolutionary War, scores of charitable societies had been established. Especially in
New England, philanthropic giving had become a cooperative and highly organized activity. The shipbuilders who attended
Boston's Old South Church gathered monthly to supervise the delivery of firewood to the indigent. Other prominent congregations in the city declared regular fasts, decreeing that all money ordinarily spent for food on that day be distributed to the poor instead.
Many communities found such giving insufficient, however.
Alms houses provided shelter and food, though often minimal, to the needy. After independence, as Americans created new economic, political, and social institutions, they also continued others, including the tradition that alms houses, as well as schools, be supported cooperatively through public taxation and private contributions. Repudiating the state‐sanctioned and state‐funded churches, centralized educational systems, and government‐owned museums of Europe, the Founding Fathers adopted the First Amendment to the
Constitution formally separating church and state and guaranteeing citizens' right to meet when they wished, say what they wanted, and form associations as they pleased.
Nineteenth‐century Americans exercised these rights with a vengeance. Indeed, the French aristocrat Alexis de Tocqueville, who toured the United States in 1830–1832 to prepare a report on American penitentiaries for his government, was astonished by the country's zeal for private associations. Thousands of non‐profit organizations, from burial societies to
orphanages, flourished. Although women did not receive the right to vote until 1920, they powerfully influenced American politics and culture throughout the nineteenth century as prime movers behind a host of these philanthropic institutions. Some, like the Philadelphia Ladies' Depository, emphasized female self‐help by establishing “exchanges” where impoverished women could sell handmade goods on consignment. Others embraced a wide variety of reforms. Dorothea
Dix of Massachusetts demanded better treatment for the mentally ill, often chained like animals in the back rooms of alms houses. Others championed first freedom, and then education, for
African Americans.
By the end of the century, in a rapidly growing nation transformed by
industrialization and
urbanization, Jane
Addams of
Chicago's Hull House and Lillian Wald of
New York City's Henry Street Settlement, promoted the establishment of
settlement houses in the crowded immigrant wards of the burgeoning cities. These institutions sought to improve living conditions, promote social interaction, and help acclimate the new arrivals to American life.
The years from 1870 to 1900 saw an unprecedented burst of economic growth in the United States that generated vast wealth for the new captains of industry and, in turn, opened a fresh chapter in the history of American philanthropy. The generation that won the
Civil War went on to create the modern business corporation and then its offshoot, the charitable foundation, a vehicle for philanthropy that proved more popular in America than anywhere else in the world. Just as the post–Civil War business fortunes were mostly concentrated in the victorious North, so, too, were the new foundations. Even those that promoted charitable causes in the
South, such as the improvement of education in the region, were rarely located there.
Only a fraction of the wealthy capitalists of the late nineteenth century became philanthropists. William Rockefeller, for example, a partner with his brother John D.
Rockefeller in the Standard Oil Company, gave almost nothing to charity. But of those who did, some did so on a massive scale. Best known were the foundations established by John D. Rockefeller, the Scottish‐born steel baron Andrew
Carnegie, and the
Detroit automaker Henry
Ford.
The vast benefactions of Carnegie, who preached that “the man who dies rich dies disgraced,” included New York's Carnegie Hall (1892), the Carnegie Institute of Technology (1900), the
Carnegie Foundation for the Advancement of Teaching (1905), the
Carnegie Endowment for International Peace (1911), and some 2,800 Carnegie libraries. The Carnegie Corporation of New York (1911) was established to administer his remaining fortune for philanthropic purposes.
Rockefeller was the major benefactor of the University of Chicago (1892) and in 1901 endowed the
Rockefeller Institute for Medical Research (later Rockefeller University) in New York City. It conducted important research on such endemic parasitical diseases as hookworm,
malaria, and
yellow fever. He established the Rockefeller Foundation in 1913 to promote “the well‐being of mankind throughout the world.” The Laura Spelman Rockefeller Memorial Foundation, named for his wife, followed in 1918. In total, Rockefeller gave some $245 million to these foundations.
The
Ford Foundation, established by Henry Ford and his son Edsel in 1936, initially concentrated its philanthropy in the Detroit area, but eventually emerged as the nation's largest philanthropic foundation and funded a wide range of projects worldwide. From 1950 to 1975, the Ford Foundation granted some $3.8 billion in programs to aid higher education, developing nations, public television, the arts, and other causes. The foundation's endowment in 2000 was about $13 billion.
The modern business corporation was an invention of the nineteenth century, and the philanthropic foundation, a creature of the twentieth century, was modeled on it. The Rockefeller Institute for Medical Research set the pattern. Like all subsequent philanthropic foundations, it followed a corporate model, with a board of trustees, a written statement of purpose, and a government‐issued charter.
By 2000, the number of charitable foundations in America, which had totaled about 150 in 1930, stood at more than 42,000. A few extremely large ones bore famous business names like Rockefeller, Carnegie, or Ford—or, more recently, Pew, Danforth, Lilley, Packard, Kellogg, or Gates—and conducted large‐scale programs on a national or international scale. Most, however, were smaller and more insular, the creations of wealthy individuals or families seeking the kind of indirect, institutionalized giving that buffered them from direct pleas for help. The beneficiaries of their philanthropy were mostly close at hand: local schools,
hospitals,
parks, symphonies,
museums, dance and theater companies, and so forth.
The trustees of these foundations were insiders. Legally, the board of a foundation, as with any corporation, conducted all its business. Appointed by founders who wanted people on whom they could rely, foundation trustees were typically wealthy white men in their sixties—a long‐time family lawyer, a business partner, a trusted relative. Most were Protestant, Republican, and graduates of Ivy League colleges. Although foundation trustees with rare exceptions served without pay, most boards nonetheless had highly conflicted relationships with the sources of their money. Foundations linked with the
automotive industry did not fund research on exhaust pollution. Those funded by fortunes tied to the
tobacco industry did not investigate connections between smoking and
cancer. Foundation philanthropy, moreover, could never be entirely separated from corporate self‐promotion. To patronize improvements in society, however defined, was good public relations.
This insulated world began to change in the 1970s, prodded by Texas Congressman Wright Patman's eight‐year crusade, which culminated in the Tax Reform Act of 1969, to require nonprofit foundations to disclose their assets and other information, and to tax their investment income. Since Republicans interested in endowing local hospitals or similarly noncontroversial projects ran the vast majority of foundations, Patman's accusation that foundation philanthropy supported unpatriotic “left wing” causes was wildly exaggerated. But so, too, were the charges of leftist critics convinced that philanthropies practiced a shadowy kind of social control through their charitable donations.
The truth has always been more complicated. Of course, since the seventeenth century, patrons rarely consulted the wishes of the recipients of their largesse. The eighteenth‐ and nineteenth‐century merchants who endowed reading rooms chose books they deemed morally improving. The “friendly visitors” in late nineteenth‐century
Charity Organization societies sought to impose middle‐class values as they dispensed aid to the urban poor. Nonetheless, in a pluralistic society, philanthropy was only one of many sources of power. When philanthropic projects ran counter to prevailing cultural norms, they usually foundered. Between 1917 and 1930, for example, philanthropist Julius Rosenwald of the Sears‐Roebuck Company built schools for over half a million black children in the South. His hope, however, to “shame” white southern politicians and education officials into spending more money on African‐American education failed miserably. The few philanthropists who ventured beyond traditional charitable donations in their own communities succeeded most strikingly when they supported a venture that had broad public support: medical research. At the beginning of the twentieth century researchers at the Rockefeller Institute created a vaccine against yellow fever, generating enormous favorable comment. At century's end, the William and Melissa Gates Foundation, established by Microsoft founder Bill
Gates, donated hundreds of millions of dollars to promote research on HIV/AIDS.
Despite the visibility of a few high‐profile, multi‐billion‐dollar foundations, American philanthropy has always been fundamentally a democratic phenomenon. Throughout the twentieth century, and especially after 1940, the very rich gave far less, per capita, than did ordinary Americans. In the 1990s, almost 85 percent of the more than $170 billion that Americans contributed annually to charity came from middle‐class families, who usually directed their giving to local religious and cultural institutions, social agencies, or self‐help organizations. In so doing, they were Benjamin Franklin's true heirs.
See also
Capitalism;
Democracy in America;
Peace Corps;
Religion;
Social Class;
Social Gospel;
Voluntarism.
Bibliography
Kathleen McCarthy , Noblesse Oblige: Charity and Cultural Philanthropy in Chicago, 1849–1929, 1982.
Dwight Burlingame and Dennis Young, eds., Corporate Philanthropy at the Crossroads, 1996.
Judith Sealander , Private Wealth and Public Life: Foundation Philanthropy and the Re‐Shaping of American Social Policy from the Progressive Era through the New Deal, 1997.
David Hammack, ed., Making the Nonprofit Sector in the United States: A Reader, 1998.
Charles Clotfelter and Thomas Erlich, eds., Philanthropy and the Nonprofit Sector in a Changing America, 1999.
Ellen Lagemann, ed., Philanthropic Foundations: New Scholarship, New Possibilities, 1999.
Judith Sealander
