Member, Learning to Give National Advisory Committee
Professor emeritus of history at the Ohio State University in Columbus, Ohio, Mr. Bremner’s books include Giving: Charity and Philanthropy in History; American Philanthropy; The Public Good: Philanthropy and Welfare in the Civil War Period; and The Discovery of Poverty in the United States.
The study of philanthropy is a relatively new field of academic interest. Historians have been writing on the topic for at least half a century, but it was not until the 1980s – the centennial of Andrew Carnegie’s gospel of wealth and John D. Rockefeller’s first ventures in large-scale giving – that colleges and universities introduced interdisciplinary courses on the subject. At present there are a number of academic centers on philanthropy to prepare graduates for careers in the nonprofit sector; in at least one state – Michigan – efforts are underway to instruct students in both elementary and high schools about philanthropy and its importance in American society.
Philanthropy, Charity and Giving
The Growth of academic interest in philanthropy has been fostered and financed by foundations, the most characteristic and enduring products of “modern philanthropy,” a movement launched a little more than a century ago whose advocates deemed it different from and vastly superior to charity. Charity, religious in origin and traditional in method was ameliorative in result; philanthropy, secular, enlightened, and innovative was preventive and curative in effect. Charity sought to relieve the needy; philanthropy rewarded the promising and aimed to discover a way to improve everybody’s health and well being.
Over the years many, if not most, of these distinctions have faded, and charity and philanthropy have become more alike than different. The most prestigious educational, research, and cultural institutions regularly appeal to the public for assistance in carrying out their missions even when partly or largely tax-supported; museums, libraries, colleges and universities, hospitals, and non-commercial radio and television stations ask private donors to help them stay in business. Begging letters from needy individuals seldom turn up in our mail, but there is no shortage of solicitations from needy institutions and organizations.
In everyday language “giving” is replacing both “charity” and “philanthropy” and to some extent inheriting the long standing reservations Americans have felt towards them, charity for its supposed gullibility, philanthropy for its alleged self-serving tendencies. It is important for those who seek to encourage the study of giving to deal frankly with these misgivings. Doing so makes the topic much more interesting than it would otherwise be and clarifies the relationship between organized giving and generosity, a national trait of which Americans are justifiably, if often immodestly, proud.
Fundraising and the Business of Benevolence
Nineteenth century reformers found fault with givers and takers of charity. Professing sympathy for the “deserving poor,” a rare breed, and denouncing the all-too-familiar mendicant, the reformers believed indiscriminate giving and duplication of effort by the charitable consumed scarce resources that should have been devoted to identifying and helping, by advice and counsel rather than alms, the honest poor. When a prospective contributor to the New York Charity Organization Society asked its leader Josephine Shaw Lowell how much of his money would go to the poor, she replied, “Not one cent.”
Today, as for many years, most of giving for victims of misfortune or disaster goes not directly to them but to local charity federations (United Appeal), denominational religious groups, and national relief, health, and service organizations that distribute it for us. Critics of the intermediary groups complain of excessive administrative costs, high salaries paid to executives, object to the activities or policies of some members of the federation, and cite well-publicized instances of fraud by agency employees. Alternative organizations representing groups (for example, women and minorities) not adequately recognized by the mainstream federations, demand greater participation in the charitable process and more attention to their supporters’ needs.
As in any bureaucratic operation allegations of misconduct or unfairness require prompt attention and, where warranted, correction. The American system of associated giving, pooling the contributions of millions of mostly small donors into huge professionally managed funds relieving countless sufferers from all kinds of hardship, is a remarkable achievement. Compared to the advantages it offers donors and recipients, its occasional failures seem minor and easy to repair.
“This business of benevolence,” a phrase coined by John D. Rockefeller to describe the efficient disposal of surplus wealth, has taken on new meaning as nonprofit organizations, competing for popular support, have become increasingly businesslike in fund raising and other operations. Service agencies charge fees for the help they provide. Art, science, and historical museums require visitors who are not dues-paying members or “friends” of the parent institutions to make a “suggested donation” before viewing their exhibits.
Money-making schemes that involve spending rather than giving can be as wholesome and homespun as a Norman Rockwell painting: the church bazaar and rummage sale, cheerleaders’ Saturday carwash, Girl Scout cookie sales, and suburban shoppers buying supermarket coupon books to benefit their church. Buying Christmas seals and UNICEF or other cause-assisting greeting cards makes the purchaser feel better. Musicians organize huge concerts to allow fans able to pay the price of tickets the satisfaction of fighting hunger and misery while enjoying themselves. Aging celebrities charge large fees for telling businessmen and conservative retirees what they want to hear at expensive lectures for the benefit of non-controversial charities. Entrepreneurs give police departments a part – usually very modes – of the proceeds of tickets bought by the public for an entertainment for underprivileged children. Even reputable agencies try to induce supporters to take chances on a lottery for a “dream house” or a jackpot of cash.
Colleges and universities, whether private or public, rely on development campaigns to raise ever-mounting sums for their endowments and special projects. Depending on the size of the gift, donees can put their names on an entire institution, one of its colleges, a library, an academic building, an auditorium, or a chair in it. Such methods, routine in private institutions are also essential for public institutions striving for excellence and recognition. As tax support for public, non-commercial broadcasting stations declines, such stations seek sponsors for public-interest programming and invite “friends” to bid on luxury goods at television auctions and to have a good time at a benefit tail-gate party, wine-tasting, or golf outing.
Motivation; Response; Tax Policy
Tax deductibility is engine that powers the business of benevolence. Before considering the impact of tax policy on giving, let us examine an earlier problem, the motivation of large givers, that once dominated the study of philanthropy.
Journalists and shapers of public opinion, deeply critical of the ruthless methods by which the founders of modern philanthropy had amassed their vast wealth, questioned the motives of the donors from the day their gifts were announced. Long after the great donors themselves were dead, historians continued to be fascinated by the issue. Since the canons of historical scholarship precluded uncritical acceptance of the benign explanations offered by the original donors or their defenders, historians scrutinized the givers’ business and personal lives to find the “real” reasons, the more discreditable the better: guilt, remorse, self-glorification, insatiable lust for power and dominance.
After reaching a climax in the 1930s, criticism of motives gave way to more sympathetic interpretations. The donors’ personal impulses and inclinations came to seem much less important than the purpose of the gift, the conditions it proposed to sustain or alter, and its result in achieving its objective. The latter depended in approximately equal degree on the trustee’s fidelity and wisdom in carrying out their mission and on the public response to the opportunities afforded by the gift.
A useful exercise for students in “Learning to Give” classes is to examine the history and evaluate the impact on the community of a local philanthropy – a library, museum, or foundation. Each has its own story to tell and its own evidence to add to the philanthropic record. Students might also be asked to identify the community’s current needs most deserving of philanthropic attention, keeping in mind George Bernard Shaw’s advice to millionaires: “Never give to people anything they want: give them something they ought to want and don’t.”
Modern philanthropy began before adoption of the Sixteenth (Income Tax) Amendment to the Constitution, but its development has been closely and favorably influenced by federal tax policy. The Revenue Act of 1913, enacted after passage of the Amendment, exempted organizations “organized and operated exclusively for religious, charitable, scientific, or educational purposes” from federal taxation. Subsequent laws added agencies for animal and child protection, literary associations, and community chests to the list of exempt organizations. The income tax law of 1917 permitted individuals to deduct charitable contributions up to 15 percent of taxable income; later laws raised the percentage to 30; and in 1969 to 50 percent. At present taxpayers who itemize their contributions can deduct the total of their gifts to exempt organizations from gross income. Non-itemizers can take advantage of a standard lump-sum deduction.
Since foundations may benefit only the donor’s family or close associates, they do not have the same tax status as individual givers or tax-exempt charity organizations. In the 1950s foundations, long criticized for conservative grant policies, became (like many other institutions) the subject of unfounded charges or supporting subversive activities; in the 1960s the results of a lengthy Congressional investigation showed that a few were involved in business and financial transactions unrelated to charity and that their contributions to charity were delayed and secondary to other interests of the controlling families. Although a Treasury Department report issued in 1965 declared “the predominant number of private foundations perform their functions without tax abuse,” the Tax Reform Act of 1969 contained provisions hostile to private foundations, imposed stringent rules and regulations on their methods of operation, and allowed a significantly smaller percentage of income to be deducted for contributions to them than for donations to other charitable organizations.
Favorable tax treatment, a powerful encouragement to giving, recognizes the important role charitable, educational, religious and other tax-exempt organizations play in supplementing the responsibility of government. The services of voluntary agencies are sometimes deemed more kindly and less impersonal than those of tax-supported agencies; the case-load at the former is often smaller and the clientele more select. They cannot supplant the work of government social agencies, but they can strive to demonstrate standards of excellence in service and care.
Giving for Religion. Social Control and Fundamental Social Change
Each year Giving U.S.A. tells us the total of American giving -- $203 billion in 2000 --, the major sources (bequests, individual gifts, foundations, and corporations), and the different categories to which the gifts were applied: religion, education, the arts, social improvement, international aid, protection of the environment.
Religion regularly leads all other categories of support. Until studies now in progress are completed, it is difficult to know exactly how religious giving is apportioned among the diverse needs religion addresses. A person twisting the radio dial might assume most of it goes to religious broadcasting stations that devote the lion’s share of their programming to appeals for more money. Money church members pledge for a new building or bigger parking lot may be part of a program to attract a large enough congregation to support a vigorous social program; seeking funds to enlarge the kitchen and increase the number of restrooms may be for the benefit of present members or a requisite for bidding for a faith-based public-service contract.
Marxist scholars reduce the purpose of philanthropic giving to a single objective: social control. According to the social control hypothesis, philanthropic giving is a device employed by the ruling class to maintain its dominance in society. No matter what the purported goal, its function is to impose middle-class values, notably the work ethic and responsible personal behavior, on the poor thereby insuring capitalism a docile labor supply, minimizing class consciousness, and the likelihood of class conflict. The social control theory of philanthropic giving endows those who accept its premises with a sense of infinite superiority to unbelievers who are unable to accept it as true.
The question that should concern us is not whether those in charge of a classroom, church choir, legislative assembly, or police state will exercise control but why and how: to maintain order in order to get a job done or to eliminate opponents; by methods that are evenhanded and helpful or harsh and brutal. Agents of philanthropic organizations may be rude, short-sighted and insensitive in dealing with the public; but they and their organizations lack power to compel obedience.
Instead of social control, philanthropy seeks to foster self control to enable people to shape their own destinies; when circumstances warrant it offers assistance to those who need help to help themselves.
A related criticism of philanthropy asserts that the gradual methods it employs to improve social conditions impede the achievement of fundamental social change. In practice, opponents resist drastic social change as fiercely as supporters demand it; efforts to achieve “fundamental social change,” whether by the Right or Left, usually entail repression and the establishment of tough regimes more hostile to change than the mild imperfect ones they replace.
Justice and Charity
Even cheerful givers recognize that as far as the poor are concerned, justice is better than charity. That opinion, often voiced by radicals in the late nineteenth and early twentieth centuries, goes back to early Hebrew Biblical scholars who believed that the Old Testament taught that the poor deserved food, clothing, and shelter as a right rather than as an act of charity. In today’s terms, justice means fairness and equality before the law; all, rich and poor alike, are brought to the bar of justice for their transgressions. In daily life we are entitled, if not to equality, to our just deserts: fair treatment in wages, decent housing, and due respect from society for other needs.
It was once taken for granted that as a result of the Great Depression and the New Deal the federal and state governments had relieved private charity of major responsibility for relief of the poor. Beginning with attacks on the federal-state Aid to Families with Dependent Children (AFDC) program in the 1950s, however, critics of the welfare state mounted attacks on “dependency,” “the welfare mess,” and “entitlements” that succeeded in making public assistance harder to get and more unpleasant to receive. Legislatures, responding to the pressure of employers’ associations, raised eligibility requirements for unemployment insurance so that by the time of the “economic downturn” of 2001, few than 40 percent of the jobless qualified for it; the food stamp program, once considered non-controversial, reached only about 60 percent of the families in need. At the same time that gaping holes in the nation’s social safety net became apparent, the five-year life-time limit on federal welfare assistance imposed by the Welfare Reform Act of 1996 went into effect. The result, by no means unexpected but not provided for, was a repetition of an all too familiar, dismal story. Some of the jobless get along somehow, using up savings, seeking odd jobs, reducing standards of living, moving in with in-laws; less fortunate low-paid temporary workers thrown out of work seek but can not be sure of finding help from overburdened charitable agencies, food pantries whose cupboards are poorly stocked, and shelters for the homeless that are already overcrowded. Employers, facing lean time, lay off more workers, figuratively tighten their belts a notch, and ask the government for tax relief.
The outpouring of sympathy for the families of victims of the terrorist attacks of September 11, 2001, yielded a total of about $1.5 billion in a number of separate relief funds. As is often the case, distribution of the money proved more difficult than raising it. Three months after the attacks, families of those killed, injured, or left without jobs as a result of the assault complained that there was no single office from which they could get needed help. With twenty different agencies, each adhering to its own established policies and methods of operation, delays and confusion in obtaining assistance were common occurrences; some applicants learned that because of quirks or technicalities they were not eligible.
In contract to these frustrations, an entitlement program of the Social Security Act was able to provide nearly every child who lost a parent in the attacks monthly benefits (averaging $550 a month) until he or she reaches his late teens. Surviving parents who remain at home to care for their children area also entitled to monthly payments, as are disabled survivors and their children. In order to process claims quickly, the Social Security Administration used employers’ and airline records without requiring death certificates. The first beneficiaries began to receive checks three weeks after the disasters.
Service, Advocacy, Litigation, Empowerment
“Life isn’t fair.” Some people become aware of this very early in life; others learn it through bitter experience with accident, illness, or misfortune. Philanthropic giving seeks to help both groups in a number of ways. Service, the best supported and most heartily approved method, tries to remove obstacles hindering the disadvantaged and help them overcome whatever problems they encounter. Education, training in skills, counseling, providing appropriate living arrangements, furnishing guide dogs and other aids to mobility, and making medical, dental, and nursing care available are typical of the service functions of giving.
“What would there be for private philanthropy to do if government provided everything?” A good answer is “Advocacy, Litigation, and Empowerment.” Although more controversial then service, and often contrasted adversely with it, advocacy, litigation, and empowerment complement service and keep the helping process vital and effective. Each warrants more attention than can be paid to it in this short paper.
The meaning of philanthropy as the word was used in the 18 th and much of the 19 th centuries was advocacy for slaves, prisoners, and the insane. Philanthropists were men and women who loved their fellow-men, especially the oppressed, despised, and weakest members of society, and devoted their lives to improving the lot of the wretched. In the opinion of contemporaries, advocates of the abolition of slavery, prison reform, and humane treatment of the insane were cranks, troublemakers, disturbers of the peace. Only later generations recognized the benefit they rendered society, as well as the classes they helped, by their persistence in attacking cruelty and promoting freedom, reason and kindness.
In the 20 th century, advocates ended many of the abuses of child and sweat-shop labor, fought racial discrimination in schools and public accommodations, attacked prejudice against women, older workers, the physically and mentally disabled, and homosexuals and lesbians. Today advocates of family planning and the rights of unborn children compete for public attention; underfunded public schools have their advocates as do parochial and private schools seeking public assistance. Animal rights, endangered species, historic buildings and neighborhoods, homeless children – people love and champion a host of causes they believe are threatened by abuse or destruction.
To those who assume that the function of philanthropy is to “feed the hungry, heal the sick, and educate the ignorant,” the notion of a charitable agency engaging in litigation seems heretical. Resorting to the courts however, may be the only way to get indifferent or recalcitrant local, state or federal administrators to abide by the letter and spirit of a law providing a needed service for the poor. It took litigation by service and advocacy organizations to end the practice in some states of diverting money appropriated for food programs in poor rural or urban school districts to wealthy suburban ones. A grant from the maverick Garland Foundation in the 1920s allowed the NAACP to convert its legal program from a service approach to a “test case” advocacy program that eventually led to the successful attack on racial discrimination in the schools.
Service, advocacy, and litigation sometimes have the happy result of putting members of a disadvantaged group once deemed in need of help in a position to help themselves and look out for their own interests. This is empowerment. Severing the bond between helper and helped may be difficult, especially for activists accustomed to acting as the senior partner. Empowerment corresponds to the highest stage in the medieval philosopher Maimonides’ ranking of the “eight stages of charity”: helping a needy person become self-supporting and independent. This is the objective of much of American giving. Its achievement, and even conscientious efforts to attain it are the best answer to popular misgivings about giving and useful reminders that generosity is better served by practice than by praise.
References
The quotation from Josephine Shaw Lowell on p. 3 is from Robert Bremner, American Philanthropy (Chicago, 1988), p. 94; George Bernard Shaw’s advise to philanthropists quoted on p. 8 is from Robert Bremner, Giving: Charity and Philanthropy in History, (New Brunswick, N.J., 1996), p. 162.
