Let’s close this introduction by looking at some of the broadest and deepest ways that philanthropy makes our lives and our nation better. I don’t mean the good done to recipients of aid, or the pragmatic value of donated money and time, or other obvious advantages. In this final section we’ll look at some of the philosophical, moral, and political gains to America that grow out of our giving tradition.
It’s easy to overlook the fact that philanthropy doesn’t just help the recipients—it offers profound life satisfaction to givers as well. It opens avenues to meaning and happiness and ways of thriving that aren’t easily found otherwise. When I was in college I had a philosophy professor named Louis Dupre who told me a story I’ve never forgotten. He had a wonderfully generous friend from whom he eventually fell away for the most paradoxical reason: this friend was unable to let Dupre be generous and giving in return. Receiving gifts and favors can be lovely, but there is also a potent and irreplaceable joy of giving that most people need to express.
The joy of giving is captured frequently in literature:
It is one of the most beautiful compensations of life that no man can sincerely try to help another without helping himself. —Ralph Waldo Emerson
As the purse is emptied the heart is filled. —Victor Hugo
If you want happiness for a year, inherit a fortune. If you want happiness for a lifetime, help someone else.
The best recreation is to do good. —William Penn
If you want to lift yourself up, lift up someone else. —Booker T. Washington
A man there was, though some did count him mad, the more he cast away, the more he had. —John Bunyan
Giving is an ancient impulse. Way back in 347 B.C., Plato donated his farm to support students at the school he founded. It is also a widespread impulse. Even people who have very little money are eager to give, and feel good when they do, as documented in several places later in this Almanac.
The book Breaking Night tells the true story of a neglected girl and the kind people who intervened to help her succeed in spite of her horrendous upbringing. “What was most moving about all of this unexpected generosity,” writes the now-grown child, “was the spirit in which people helped. It was something in their moods and in their general being…how they were smiling, looking me right in the eyes.”
Capitalism and philanthropy have always been closely tied. In the 1600s when the Netherlands was gestating free trade and many modern business patterns, there were alms boxes in most taverns (where business negotiations generally took place), and a successful deal was expected to conclude with a charitable gift.
Philanthropy and business are entwined especially tightly in America. One of the most distinctive aspects of American capitalism is the deep-seated tradition of philanthropy that has evolved among American business barons. Our capitalism also differs from the capitalism practiced in other countries in two other important ways—in its linkage to religiosity, and its preference for entrepreneurial forms. Both of these are also connected to philanthropy.
Let’s unpack this a bit, starting with religion. In 2014, the Pew Research Center released data comparing the per capita wealth of nations with the religious beliefs of their people. The U.S. stands out like a sore thumb:
The Calvinism that came to the U.S. with the Pilgrims (and continued to dominate our religious views for generations right up to the present) treats wealth as something that passes through the hands of a successful person—with the steward expected to apply it to uplift his fellow man. Thus John Rockefeller gave away 95 percent of his fortune by the time he died. Bill Gates is in the process of giving away tens of billions of dollars, leaving his three children only $10 million each.
That is different from the pattern in Europe, where many of the same dynasties have dominated the rolls of the wealthy for generations. The Howard family, for instance, has been one of Britain’s richest for more than 500 years. In the U.S., wealth tends to be extremely transient. Only 15 to 20 percent of the individuals on today’s Forbes list of richest Americans inherited wealth. About half the the Forbes 400 had parents who didn’t go to college at all. Even the foundations left behind by the previously wealthy rapidly get eclipsed in America: the Rockefeller Foundation, once our richest, now ranks a mere number 15, while the Carnegie Corporation has fallen to number 24.
A second distinctive aspect of American capitalism is its entrepreneurial bent. As economists Zoltan Acs and Ronnie Phillips write, “American capitalism differs from all other forms of industrial capitalism” in two ways. One is its emphasis on the creation of new wealth via entrepreneurship. New firms, new ideas, and nouveau riche wealthmakers are at the core of our economic success.
This can be demonstrated in many ways. If you look at the 500 largest companies in the world today, you find that 29 percent of the U.S. firms were founded after 1950, compared to just 8 percent of the European firms. On a per capita basis, the U.S. has four times as many
self-made billionaire entrepreneurs as Europe.
Entrepreneurialism and philanthropy are often tightly connected, and linked directly with economic success. In their book SuperEntrepreneurs, Swedish researchers Tino and Nima Sanandaji investigated about 1,000 self-made billionaires from around the world. They found “a very strong correlation” between entrepreneurship, wealth, and philanthropy.
Acs and Phillips argue that in addition to its distinctive means of creating wealth through new enterprises, the U.S. has a distinctive means of “reconstituting” wealth via philanthropy. “Philanthropy is part of the implicit social contract that continuously nurtures and revitalizes economic prosperity,” they write. Philanthropy is a very important mechanism for recycling wealth in America, agree the Sanandajis. “The notion exists that wealth beyond a certain point should be invested back in society to expand opportunity for future generations,” they write. “ ‘The legitimacy of American capitalism has in part been upheld through voluntary donations from the rich’…. Much of the new wealth created historically has thus been given back to society. This has had several feedback effects on capitalism. For one, the practice has limited the rise of new dynasties. Another positive feedback mechanism is that the donations to research and higher education have allowed new generations to become wealthy.”
Civil society and charitable action sprang up in the U.S. even before government did. In most of our new communities, mutual aid among neighbors was solving problems long before there were duly constituted agencies of the state.
Americans of all ages, all conditions, and all dispositions constantly form associations...religious, moral, serious, futile, general or restricted, enormous or diminutive. The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society. Wherever at the head of some new undertaking you see the government in France, or an aristocrat in England, in the United States you will be sure to find an association.
claim that as the citizens become weaker and more helpless, the government must become proportionately more skilled and active, so that society should do what is no longer possible for individuals.... I think they are mistaken.... The more government takes the place of associations, the more will individuals lose the idea of forming associations and need the government to come to their help. That is a vicious circle of cause and effect.... The morals and intelligence of a democratic people would be in [danger]. Feelings and ideas are renewed, the heart enlarged, and the understanding developed only by the reciprocal action of men upon another.
Edmund Burke also viewed local association as the nursery for broader loyalty to one’s fellow man. “The little platoon we belong to in society is the first principle (the germ as it were) of public affections. It is the first link in the series by which we proceed towards a love to our country, and to mankind,” he wrote.
The great advantages that accrue to America from possessing a bubbling voluntary sector that acts independently have been under threat since the Great Depression, cautions author Richard Cornuelle. The economic crash gave American confidence a knock and planted the idea that “only government seems big enough” to solve serious social issues. “Our habit of sending difficult problems to Washington quickly became almost a reflex” and parts of the public and some of our leaders have turned their back on our deep tradition of indigenous alternatives to government action.
Cornuelle complains that we often now
speak of American life in terms of only two “sectors”: the public sector (government), and the private sector (commerce). We leave out the third sector in our national life, the one which is neither governmental nor commercial. We ignore the institutions which once played such a decisive part in the society’s vibrant growth…[which] made it possible for us to build a humane society and a free society together.
This third sector, operating in the space between the individual and the state, between the coercion of law and the profit-seeking of commerce, goes by various names: civil society, the voluntary sector, charitable action. Back in 1970, the Peterson Commission pointed out the crucial need for “institutions standing outside the frame of government but in support of the public interest.” Cornuelle called these philanthropic institutions the “independent sector,” and warned that they have
a natural competitor: government. Both sectors operate in the same industry: public service and welfare…. The quality of life in the U.S. now depends largely on the revival of a lively competition between these two natural contenders for public responsibility. The struggle would enhance the effectiveness of both.
In some quarters, Cornuelle observes,
the very idea of competition with government is, by a weird public myth, thought to be illegitimate, disruptive, divisive, unproductive, and perhaps immoral…. Far from being illegitimate, lively competition with government is essential if our democratic institutions are to work sensibly….
The government doesn’t ignore public opinion because the people who run it are naturally perverse. It isn’t wasteful because it is manned by wasteful people…. Without competition, the bureaucracy can’t make government efficient…. Innovation painfully disrupts its way of life. Reform comes only through competitive outsiders who force steady, efficient adjustment to changing situations.
The independent sector will grow strong again when its leaders realize that its unique indispensable natural role in America is to compete with government. It must be as eager as government to take on new public problems.
There are times and places where governmental rulers feel threatened by the philanthropic process. Philanthropy practiced on a mass level, as in America, becomes a kind of matrix of tens of thousands of private legislatures that set goals and priorities, define social ills, and methodically marshal money and labor to attack them—without asking the state’s permission. Some rulers prefer dependent citizens who are consumers rather than producers of governance.
Certainly tyrants hate philanthropy. They want the state to be the only forum for human influence and control. “Everything within the state, nothing outside the state, nothing against the state,” was Mussolini’s encapsulation. Independent associations and private wielders of resources must be co-opted or suppressed. The charitable sector is not only denied a seat at the table, it is put on the menu to be eaten. One of the first things every totalitarian government has done upon assuming power—from Nazis, to communists, to radical imams—is to destroy charities, private giving, and voluntary groups.
We’re seeing the same phenomenon today in authoritarian countries like Russia, China, and Iran, where charities are being shut down out of fear that they will provide alternate sources of ideas, cultural solutions, and social legitimacy. Only the freest societies have had flourishing philanthropic sectors. In America, our freedom to expend charitable resources without supervision or control is ultimately sheltered by the First Amendment of our Bill of Rights, which protects our right to assemble and act outside of government, to dissent, to take heterogeneous, unpopular, or minority-supported action to redress grievances.
“Every single great idea that has marked the twenty-first century, the twentieth century, and the nineteenth century has required government vision and government incentive.” That was former Vice President Joe Biden. “The ballot box is the place where all change begins in America.” That was former Senator Ted Kennedy.
These speakers overlooked the vast improving powers of free enterprise. (Government didn’t produce the air conditioning that transformed the South, or the mobile phone that is now revolutionizing everything from news to conversation to human attention spans.) They also ignored the profound role of independent philanthropy in altering American history.
Let’s open this final section with a bit of extended historical analysis by Richard Cornuelle, from his book Reclaiming the American Dream:
We wanted, from the beginning, a free society, free in the sense that every man was his own supervisor and the architect of his own ambitions. So our founders took pains to design a government with limited power, and then carefully scattered the forces that could control it.
We wanted as well, with equal fervor, a good society—a humane, responsible society in which helping hands reached out to people in honest distress, in which common needs were met freely and fully. In pursuit of this ambition, Americans used remarkable imagination. We created a much wider variety of new institutions for this purpose than we built to insure political freedom. As a frontier people, accustomed to interdependence, we developed a genius for solving common problems. People joined together in bewildering combinations to found schools, churches, opera houses, co-ops, hospitals, to build bridges and canals, to help the poor. To see a need was, more often than not, to promote a scheme to meet it better than had ever been done before.
The American dream was coming true. Each part of it supported another part. We were free because we limited the power of government. We prospered because we were free. We built a good society because our prosperity yielded surplus energy that we put directly to work to meet human needs. Thus, we didn’t need much government, and because we didn’t, we stayed uniquely free. A sort of supportive circle, or spiral, was working for us.
The part of the system least understood, then as now, was the network of non-governmental institutions that served public needs. They did not leave an easy trace for historians to follow. They did not depend on noisy political debate for approval, nor did civil servants have to keep very details records of what they did. [Yet] they played a significant role.... They took on almost any public job and so became the principal way Americans got things done.
For years the leading colleges and universities were created by the churches. Hospitals began in a variety of ways, and in the era before the Civil War, under Clara Barton’s leadership, they blossomed into today’s major system of independent institutions. Many of our giant commercial firms, notably in insurance and mutual savings, grew out of early self-help organizations.
Urgent problems filled the agenda of public business in early America. Citizens, acting on their own, took the heavy load. Localities and states took most of what was done by government. We rarely needed the federal government, a distant thing to the frontiersman. We limited government, not only because people knew its limitations and wanted it limited, but because we left little for it to do.
As the great social thinker Michael Novak once put it: “The secret to the psychology of Americans is that they are neither individualists nor collectivists; their strong suit is association, and they freely organize themselves, cooperate, and work together in superb teamwork.” Novak points out that “the social system of the United States is constituted of three independent, yet interdependent, systems of institutions, organized along different axes and even different values: A political system. An economic system. And a moral-cultural system.” Our politics and economy are freedom-focused. Our moral-cultural system is focused on goodness, decency, and fairness.
These descriptions of America’s social order, and its dual devotion to freedom and goodness, are helpful in understanding why philanthropy is indispensable to American society. I view it as indispensable in two senses: 1) Philanthropy is not able to be replaced by something else. And 2) bad things will happen to the nation if it is not adequately continued.
The aspect of America that many of us cherish most is the latitude allowed individuals to chart their own course, to be responsible for themselves, sometimes to reinvent themselves if they choose and are able. Historically, this degree of individual independence and freedom is highly unusual. Every preceding society was in one fashion or another paternal. On the wide spectrum stretching from starchy monarchy to socialist beehive, all pre-American governments basically took responsibility for every individual, and in return reserved the right to tell him or her how to live. More specifically, a small caste of strongmen at the top of the heap (king, tribal chief, warlord, bishop, emperor) told everyone else how to live.
One can’t really claim that’s unfair—it’s how all but a thin sliver of humanity has always existed. The individual liberty and self-reliance carved out in America was the anomaly. And one of great preciousness, because it has allowed a quality of life and existential autonomy never approached by people in other times and places.
Our non-paternalized freedom is also a somewhat frail arrangement, however. For the reality is that all of us will occasionally misuse our independence in various ways, and a substantial minority of us will make a complete hash of our lives under a system of profound freedom. And when elderly profligates start dying in the street, or neglected children peer up at us with starving eyes, all the old solutions to governance will immediately be proposed.
Monarchy or socialism or blanketing welfare-state all boil down in one way or another to setting up a paternal fief under which individual freedoms will be traded away in exchange for more secure and predictable lives. Then the shirkers and the drunks and the abandoned are no longer at risk of perishing on the street. But personal liberties also evaporate, and the ceiling under which we must all fly falls down to match the lowest common denominator. Life becomes less risky, but all citizens are debased—not only the failures who are henceforth ordered how and where to live, but also everyone who had succeeded independently, and even members of the master class who must cage and feed the failures. All experience a decline in dignity, self-determination, and life satisfaction.
Lovers of freedom object: “That’s too high a price, we must therefore let the failures fail, else our whole system will tumble into busybodying oppressiveness.” But stepping over wasted children or dead bodies will soften many citizens to the idea of trading independence for security. Which is why nearly all human societies have ended up in one of the many paternal structures.
It’s just a fact of human empathy: one way or another, the miserable must be lifted up from the sidewalks where they sprawl. Common decency will not tolerate the alternative. Yet when the lifting is done in conventional collective ways, it leads to enslavement on both sides of the transaction.
It was voluntary action and private giving that allowed America to escape this terrible dilemma. We made the magical discovery that voluntary action can be a non-enslaving kind of paternalism, enabling us to meet Judeo-Christian and humanitarian responsibilities to fellow men without setting in motion the statist spiral which kills individual sovereignty. In solving basic security hungers and primal fears of a “jungle” freedom, philanthropy thus enabled enormous liberty. Philanthropy turned out to be indispensable to personal independence and national success. It kept America functioning as that exceedingly rare society where average people can steer their own lives.
This is why philanthropists are different from doctors, or teachers, or businessmen, who also do social good, and different from soldiers or ministers or others who sometimes sacrifice their own interests to aid fellow citizens. Doctors, businessmen, and soldiers are valuable contributors, but they are not essential to maintaining America’s basic social contract. They are not indispensable.
Effective philanthropists are indispensable. They allow us to have a good society without a paternalist state. They are the prophylactic against public lurches for freedom-killing security blankets.
Philanthropy is the guardian of our self-rule. It is one of just a few sine qua nons essential to our national health. Without it there is no America as we know it.
As you amble through the multifarious and sometimes quirky human actions described on the pages of The Almanac of American Philanthropy, and absorb the colorful stories of charity as it has been practiced in our land over four centuries, I hope you will also keep sight of this profound reality that underlies voluntary giving in America.