Philanthropy Winter 2016

LITIGATION DONATION • THE BARD & HENRY FOLGER • WHO’S INTOLERANT? A PUBLICATION OF THE

W I N T E R

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Out of Sight but Hard at Work How our $360 billion philanthropic sector gets things done

...beneath the surface, with no one in charge!

Special Issue:

An exclusive excerpt & a new national poll

THE ALMANAC OF AMERICAN PHILANTHROPY a lively compendium of

Great Donors Major Achievements Essential Books & Quotations Vital Statistics & Polls History & Timeline and more!

Karl Zinsmeister The Philanthropy Roundtable AlmanacOfPhilanthropy.org

a new jewel • available now qualified donors may request copies: AlmanacSales@PhilanthropyRoundtable.org or (202) 822-8333 for sale at Amazon.com

table of contents

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features

departments

14 H ow Philanthropy Fuels American Success

4 Briefly Noted

This exclusive excerpt from The Almanac of American Philanthropy details how America’s deep culture of private giving keeps our nation thriving. By Karl Zinsmeister

A record gift to Catholic schools.

Paul Allen continues to battle Ebola.

Knights rescue the oppressed. A toy store for homeless kids. Hamilton’s philanthropic roots. The 99 percent.

A mini-interview with Purdue president and former governor Mitch Daniels.

16 Donors + Passion = Accomplishment These Americans brought passion and 9 Nonprofit Spotlight personal involvement to their giving, and Teaching Together hires adults changed the nation in the process. with developmental disabilities as 25 Good Charity, Bad Charity?

Catholic-school classroom aides.

You have to be pretty curmudgeonly not to be impressed by the wild richness of 10 Interview U.S. philanthropy.

Carrie and John Morgridge

These enthusiastic donors believe every 30 Fixing Problems via Philanthropy gift matters.

Private giving has some intrinsic advantages in solving society’s problems.

Which may be why government officials 60 Ideas Investing in Culture Change sometimes view it as a rival.

Lots of donors say they’re interested in 36 Sneak Peek at a New Nationwide Poll social reform. Most don’t act. on Charitable Giving

By William Foster and Gail Perreault 40 Common Criticisms of Philanthropy We review a list of complaints against 63 Books private giving.

World’s Greatest Shakespeare Library 46 Big-picture Benefits of Philanthropy People know that charity helps recipients.

Other powerful ways that philanthropy makes America stronger, freer, and happier often get overlooked, though.

55 T he Art of Public Policy Philanthropy: Donors Go to Court

All thanks to one devoted couple.

By Algis Valiunas Books in Brief Learning from Newark.

66 Face to Face Photos from our Annual Meeting and a K-12 innovation gathering.

A P U B L I CATI O N O F THE

Adam Meyerson PRE SI D E N T

Karl Zinsmeister

VI C E P R E S ID E N T , P U BL ICA T IO N S

Caitrin Nicol Keiper E D I TOR

Ashley May

MA NAG IN G E D ITO R

Andrea Scott

A SSOCIAT E E D IT O R

Taryn Wolf

A RT D IR E CT O R

Jen Para I NTE R N

Arthur Brooks John Steele Gordon Christopher Levenick Bruno Manno John J. Miller Tom Riley Naomi Schaefer Riley William Schambra Evan Sparks Justin Torres Scott Walter Liz Essley Whyte

C O NT R IBU T IN G E D IT O R S

Philanthropy is published quarterly by The Philanthropy Roundtable. The mission of the Roundtable, a 501(c)(3) tax-exempt educational organization, is to foster excellence in philanthropy, to protect philanthropic freedom, to assist donors in achieving their philanthropic intent, and to help donors advance liberty, opportunity, and personal responsibility in America and abroad.

All editorial or business inquiries: Editor@PhilanthropyRoundtable.org Philanthropy 1730 M Street NW, Suite 601 Washington, DC 20036 (202) 822-8333 Copyright © 2016 The Philanthropy Roundtable All rights reserved

Seamus Hasson, Bill Mumma, Clint Bolick, Dick Weekley, and others share hard-won knowledge on how donor-funded litigation can improve our country.

Cover: Sean Vidal Edgerton

WINTER 2016

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A Record for Catholic-school Scholarships This past fall, the Inner-city Scholarship Fund run by the Archdiocese of New York City—which provided tuition assistance to nearly 7,000 Catholic-school students in 2015—announced the largest-ever U.S. gift to Catholic schooling. Christine and Stephen Schwarzman gave a record $40 million to an endowment that will provide an additional 2,900 children per year with scholarships.

The Schwarzmans first started contributing money so needy children could attend Catholic schools back in 2001. Since then, says Christine, who serves as a volunteer trustee of the Inner-city S ­ cholarship Fund, “we’ve met so many impressive young women and men who have benefited greatly from the values provided by a Catholic school education.”

She’s not the only one to notice this. Hard research on the benefits of Catholic schools shows that compared to similar students in conventional public schools, children in Catholic schools average higher

Family foundations created with a plan to eventually spend all funds and close Before 1970:

3%

Since 2010:

19%

National Center for Family Philanthropy and the Urban Institute 4

PHILANTHROPY

levels of academic achievement, are far more likely to graduate, and also more likely to graduate from college.

Catholic schools do a particularly good job of reducing the achievement gap between disadvantaged children and middle-class children.

And there is a striking pattern of “the worse, the better”: the poorer and more disadvantaged the student is, the more his or her life outcomes are improved by attending a Catholic school. (This is true of faith-based schools generally, not just Catholic schools.)

Even more striking than the academic results is the evidence on behavior and attitudes. I­ nner-city children who attend Catholic schools (many of whom are not Catholic but there for the discipline and love and values-based education) have been shown by research to exhibit more constructive and pro-social behavior, to be more generous and more interested in the well-being of others, to be more civically engaged when they grow up, to earn higher wages, to vote more regularly, and to be more tolerant of others.

That last finding of tolerance is interesting, and it was recently reinforced by a 2015 study from Jay Greene and Cari Bogulski, two academics at the University of Arkansas’s Department of E ­ ducation.

They surveyed 1,300 adults across the U.S., collecting information on the type of schools they attended and background on their childhood, and administered a series of measures developed by the Anti-­Defamation League to measure anti-­Semitic attitudes. The study controlled for background characteristics like race, age, religion, and parents’ education. And it found that people who attended ­Catholic and other Christian schools when they were young are notably less anti-Semitic.

The Greene and Bogulski finding refutes the portrayal by some organizations of religious schools as potential breeding grounds for intolerance, with public schools as the antidote. In reality, public-school attendees exhibit a good deal more intolerance than students in Catholic and other Christian schools.

Private schools that are secular also yield less tolerance, report Greene and Bogulski: “The benefit of attending private school on reducing anti-Semitism is concentrated among religiously affiliated private schools. Secular private schools are similar to secular public schools in the level of anti-Semitism among their former students. We

Freedom House

briefly noted

When the CDC dedicated a new emergency operations center near Monrovia, Liberia, in ­S eptember the director attributed much of the agency’s success at controlling the dangerous 2014 outbreak to Allen. As he convened an Ebola Innovation Summit last April, Allen explained that “I’ve been interested in solving how Ebola is transmitted since 2009 when I first funded research to better understand this vicious disease.” He added that “When I saw the early data around the Ebola outbreak in West Africa last year, I knew we were potentially facing a global health crisis unlike anything we had ever seen. I felt compelled to act.”

Freedom House

therefore have some reason to believe that religious, mostly Christian, institutions are playing an important role in restraining anti-Semitism.”

This is something donors like the Schwarzmans figured out a long time ago. For more on the exciting openings for philanthropy in Catholic schools today, see The Philanthropy Roundtable’s new guidebook, Catholic School Renaissance: A Wise Giver’s Guide to Strengthening a National Asset.

Instant, Imaginative Aid When the Centers for Disease Control called for emergency assistance to fight the Ebola epidemic in West Africa, Microsoft co-founder and philanthropist Paul Allen responded. In about 20 minutes. Part of his $100 million individual pledge transported 500 emergency health personnel and all of their equipment to the three countries where the disease was raging, and built pop-up treatment centers.

The rest of his money went toward a slew of out-of-the-box remedies. For example, it became clear that American medical workers were hesitant to travel to infected areas for fear they would not be medically evacuated if they fell ill. Allen’s solution? Build two portable medevac units and create a fund to pick up the costs of evacuation not covered by a medical worker’s insurance. The cost to the foundation? About $10 million.

As Ebola cases have receded, Allen’s focus on the disease has not. This summer his foundation unveiled, along with the U.S. Department of State and MRIGlobal, a new “­b io-containment system” for medevacs. Resembling a shipping container, this sick-passenger transportation unit can be loaded onto an airplane and delivered to the appropriate medical facility. Once the patients are delivered, only the shipping container will need to be decontaminated, rather than the entire airplane.

The foundation also recently announced another $11 million to beat back Ebola. Grants include $1.5 million to Baylor College of M ­ edicine to design and build a more efficient and portable triage unit, $2.8 million to Becton, Dickinson, and Company to create a rapid diagnostic test, and $2.1 million to Chembio to create a diagnostic that not only detects Ebola, but also malaria, dengue, and other diseases using one patient sample.

Two boys in a Syrian refugee camp

Knights Rescue the Oppressed For years, nonprofits and foundations have been sending aid to refugees in the Middle East and Europe. After the photo of a drowned Syrian toddler on a Turkish beach went viral, these organizations aiding migrants saw donations soar.

Save the Children, which had raised $200,000 for S ­ yrian children in eight months, collected $800,000 in eight days after the tragic photo was released. At the United States Fund for UNICEF, donations increased 636 percent.

It is hard, however, for nonprofits to reach the persecuted minorities ISIS is systematically ­killing

“In previous years, in some ways it was a mark of failure to spend down.

It was assumed the family couldn’t work together or that they were giving up.

Now it can be seen as a strategic, conscious choice.”

—ALICE BUHL National Center for Family Philanthropy WINTER 2016

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briefly noted

Carol Suchman bought out a toy store for needy kids

PhilAphorism

“A man wrapped up in himself makes a very small bundle.”

—BENJAMIN FRANKLIN (from The Almanac of American Philanthropy) 6

PHILANTHROPY

Toy Store Glee Carol Suchman was walking in New York City when she came upon a local toy store that had gone out of business. “The toys in there looked so sad, and they were gathering dust,” she said.

“It occurred to me we should bring those toys to where they should be going.” To needy kids.

After negotiating a price for the thousands of toys and school supplies, Suchman e-mailed Antonio Rodriguez, the director of city homeless shelters: “I just bought a toy store, can you help?”

A venture capitalist, wife, and mother of three, Suchman purchases hundreds of toys every year for distribution to foster children in the city’s system.

Those donations have always been anonymous.

This time—at Rodriguez’s insistence that “one story often inspires others to take action”—she agreed to let her name be released.

Suchman and other volunteers organized and bagged up the toys for easy distribution over the holidays. “There will definitely be a lot of smiles and happy kids,” Suchman remarked. “If it brings them some joy and they realize there are people looking out for them, then my job is done.” —Jen Para

Carol Suchman

in Syria and Iraq, like the Christians, Yazidis, and Mandaeans. These minorities are reluctant to gather in refugee camps where extremists could find it even easier to attack and kidnap them and enslave the women among them. Instead, non-Muslim refugees are staying in churches, Christian homes, and the wilderness. Less than 3 percent of the residents of U.N. camps in the ­M iddle East are non-Muslims—which leaves these minorities at a disadvantage because the camps are the primary way most countries, ­including the U.S., take in refugees.

Earlier this year when talking about the ISIS-traumatized regions, Pope Francis said “a form of genocide—and I stress the word ‘genocide’—is taking place, and it must end.” One organization that is focusing its efforts on these victims is the Knights of Columbus, who have given over $4 million in assistance to the Middle East. Last fall, the Knights of Columbus Christian Refugee Relief fund raised $2.2 million specifically to help displaced Iraqi and Syrian Christians and other religious minorities. The money went towards building new homes in K ­ urdish-controlled northern Iraq, where the C ­ haldean Catholic A ­ rchdiocese of Erbil owns property. More recently, in September the Knights sent one month’s supply of food, costing $810,000 including transportation, to 13,500 refugees fleeing Mosul and the Nineveh Plains. Each family package contains staples like canned meat and fish, rice, sugar, cooking oil, tomato sauce, beans, cheese, wheat, tea, and pasta.

The Knights also produced a television commercial to increase awareness of this genocidal persecution. The one-minute spot features Father Douglas Bazi, an Iraqi priest who, after having been kidnapped and tortured by extremists himself, runs a refugee camp near Erbil. Father Bazi pleads to viewers to “pray for my people, help my people, and save my people.”

In November, the Knights gave $500,000 to help educate Syrian and Iraqi refugees in Jordan.

The money will expand 18 Jordanian Catholic schools to provide a safe place for children to learn and heal from the trauma.

Many other organizations are giving aid, ­p romoting resettlement strategies, and advocating for the millions of disrupted refugees in the Middle East and Europe. To help inform ­philanthropists, Charity Navigator has created a list o­ f the highly rated charities providing humanitarian aid and services to the region. The list includes S ­ amaritan’s Purse, CARE, International ­M edical Corps, Lutheran World Relief, and the Child Foundation. —Jen Para

Q&A WITH MITCH DANIELS He was CEO of the Hudson Institute, directed the Office of Management and Budget under President George W. Bush, and served as governor of Indiana for eight years.

But some of the most interesting work accomplished by Mitch Daniels has been during his time as president of Purdue ­University, a position he assumed in 2013. He’s focused hard on bringing affordability and value to his storied land-grant university—and in the process showing other universities how to stop burning money. Hard-headed measures of how much various Boilermaker diplomas contribute toward a satisfying career and productive life are the kind of thing that gets his pulse racing. Philanthropy recently interviewed Daniels about his new initiatives, how to protect donor intent, and data, data, data.

Q: What role does private philanthropy play at a state university like Purdue?

A:

It’s no secret that traditional sources of support for public universities are under differing degrees of pressure. Indiana has maintained its total spending for higher education, I believe at the third-best rate in the country, last data I saw. But still, Purdue receives fewer dollars today than it did several years ago. So if a university like ours wants to be careful about what it charges students, it’s forced to look elsewhere to make ends meet. We work hard on efficient spending, we work hard on corporate partnerships for research and other work that we can do, and we make our case to philanthropists. In the last year we got the largest single grant in the history of our university, for a variety of things ranging from growth of our engineering college to transformation of our school of technology.

Q: Philanthropists often worry about giving to large universities, specifically in regard to having their donor intent ignored. Do you have any suggestions?

A:

We’ve all seen abuses of donor intent, and it offends me almost as much as it offends the donor in question. Donors can be careful and specific in their original gift, but to some extent it comes down to the integrity of the school in question. I’ll just say that at Purdue we take it very seriously, and would view it as a failure on our part if a donor saw his or her money spent for purposes he or she didn’t intend.

Carol Suchman

Q: What role can donors play in improving college affordability?

A: Probably larger than they think. Donors and foundations should politely inquire: “What’s your tuition policy, and your recent record of increases? What is your university doing to promote efficiency in the use of resources?” Simply ask those questions as one of the requirements in applying for a grant. It would introduce a new note of discipline in the system. I think you’d be surprised how much impact it might make in raising the consciousness of people for whom this hasn’t been a high enough priority.

Q: You’ve frozen tuition at Purdue for the last couple and the next couple years. How are you making that up?

A:

Well, it isn’t appropriations. And although donations have set some records, most of that doesn’t come in right away. So mainly we’re being more careful on the expenditure side. We’ve asked the entire campus to participate. We have what’s called a Student Affordability Fund. Many of us in administrative positions have forgone any raises; money saved has gone to that fund. We struck a deal with Amazon which is saving students a lot of money on textbooks, and as part of that deal Purdue gets a small commission—all of that money goes into the Affordability Fund.

Thanks to cost cutting, this year we were not only able to hold tuition, but raise salaries. I made a portion of the raise contingent on creation by each university unit—there are about 20 in total—of a plan for improving their efficiency in spending, reducing fixed expenses, and making better use of space. I’m happy to say all the units came forward and more than met the goal.

Q:

Can you tell me more about the survey that you’re doing with Gallup?

A: The Gallup Purdue Index is the largest survey ever taken of college

graduates: 30,000 every year. So it’s a very big database. It allows for slicing and dicing in all kinds of ways that haven’t been possible before.

It began out of our interest in being able to prove the value of a Purdue education, something else that higher ed hasn’t been called on to do.

We’re learning a lot about college graduates in general, as well as a subset of Purdue graduates too. By comparing the general and ­Purdue samples we’re able to calculate the positive outcomes of a ­Purdue education—which turn out to be extraordinary. Not just material, by the way. Purdue students do well in things like jobs and income, but Gallup also measures five “domains of well-being.” Taken together, these are highly predictive of a great employee, a great citizen, and a successful life. So we have something reliable and authoritative to say about the product that we’re providing. At Purdue we travel under the little catchphrase, “higher education at the highest proven value,” and each word matters. “Proven” is the one that we’re discussing here.

Q: What’s the age range of the survey? Recent graduates?

A: All ages. The survey results yielded a huge batch of headlines

about significant percentages of alumni not sure their college was worth it. To me, the most significant finding was a big drop between those who’ve been out at least ten years and those who’ve come out more recently. The younger graduates paid a lot more for their degrees—a lot more. And in some cases, it’s not clear what rigor of education they got; it appears that rigor had been diluted. This treasure trove of data started with Purdue wanting to prove what up to that point we could only suspect and assert—that our service, our education, is highly valuable. That’s a question all colleges need to explore honestly.

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briefly noted

The 99 Percent The news in December that Mark Zuckerberg and Priscilla Chan have decided to give away 99 percent of their Facebook stock by the end of their lives impressed many Americans. The couple are in excellent company. Before he died, John ­Rockefeller gave away 95 percent of the largest personal fortune ever accumulated. George ­Eastman, who created Kodak, and Julius R ­ osenwald, who built Sears, ­Roebuck into a merchandising powerhouse, had both handed off the vast portion of their wealth

Alexander Hamilton, brought to the U.S. by philanthropy!

Mark Zuckerberg and Priscilla Chan with their daughter, Max

99.96% (portion of their wealth the Gates family is on track to give away)

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PHILANTHROPY

Charity Brought Us the Father of Finance The Broadway smash musical that tells the story of Founding Father Alexander Hamilton has important veins of philanthropy rippling through it. The storyline describes how Hamilton’s American experience was initiated by charity. As a destitute teenager in the Caribbean he survived a devastating hurricane and wrote a letter to the editor about it. Even in the midst of ruin and many other pressing needs, readers struck by his literary talent “passed a plate around— total strangers moved to kindness by my story raised enough for me to book passage on a ship that was New York-bound.”

Thanks to this generous intervention, ­Alexander Hamilton found himself in a place and time ­bursting with opportunity, in a nation that needed his talents, and that continued to lift up generations of others after him. The closing moments of the musical capture another philanthropic twist: New York City’s most successful orphanage was created by Hamilton’s widow as a tribute to her husband—the illegitimate orphaned foreigner who became our first Treasury Secretary. This incident is captured in The Almanac of American Philanthropy (excerpted in the feature section of this magazine).

Thanks to the Rockefeller Foundation, 20,000 low-income New York high-schoolers will get to see this exciting story play out on stage. The foundation donated $1.5 million to send students to Broadway and provide educational materials that will help teachers offer follow-up lessons.

The students’ tickets are subsidized, not free—to encourage personal involvement, students will be charged $10 each (that’s the greenback that, for now, bears Hamilton’s face). Meanwhile, the show’s composer and star, Lin-Manuel Miranda, was recently awarded a grant from the MacArthur Foundation to recognize his fresh retelling of a classic American story.

Mark Zuckerberg; Joan Marcus

Tackling Dementia Currently, there is no known prevention, cure, or effective treatment for dementia, a malady that includes Alzheimer’s and other age-related diseases. Dementia affects nearly 48 million people worldwide, and this number is expected to double every 20 years as the world population gets older.

The global cost of dementia is projected to reach $1 trillion by 2018.

Hoping to soften these losses, Atlantic Philanthropies recently announced a $177 million gift aimed at understanding and reducing dementia. The recipient was the Global Brain Health Institute, a program co-led by the University of California, San Francisco and Trinity College Dublin. This donation is the largest non-capital grant Atlantic has ever made, and the biggest philanthropic donation in Irish history. GBHI plans to train 600 leaders over 15 years, and spread across borders solutions to mental decline that are effective regardless of wealth or culture. —Jen Para

before they took their eternal rest. Many others could be cited on this front.

And consider the case of Bill and Melinda Gates.

Their net worth is roughly $80 billion at present. They have said that they intend to leave their three children $10 million each as their inheritance. Three x $10 million = $30 million kept in the family. Thirty million is less than four hundredths of one percent of $80 billion.

So the Gates family appears to be on a course to give away something like 99.96 percent of its wealth.

nonprofit spotlight

Aide Anna Allen leads a religion lesson for third-grade students at St. Peter School.

Andrea Scott

TE ACH I NG TOG ETH ER Marita Forr—an adult with special needs, and a Special Olympics athlete—always dreamed of being a teacher. But it was her younger sister, Mary, who became one instead, now teaching middle-school ­history, religion, and Latin at St. Peter School in ­Washington, D.C. With Marita in mind, Mary “saw the great need for inclusion of people with special needs” in schooling.

Mary’s insight was that, like her sister, many adults with special needs are more interested in serving than in being served, and have a lot to offer. So she took action.

Her budding nonprofit, Teaching Together, provides employment for adults with ­cognitive disabilities in Catholic schools, placing them as classroom aides.

Individuals with intellectual disabilities have very high unemployment rates.

M eanwhile, students sometimes lack ­ ­opportunities to interact with and learn from such people. Teaching Together addresses both issues, giving persons with special needs meaningful employment and experiences, while bringing valuable perspective, life experience, and human warmth to their schools.

Forr, a graduate of the University of Notre Dame’s Alliance for ­Catholic

­ ducation teacher-training program, E launched the concept on a volunteer basis in Atlanta, where she was serving her required two-year inner-city teaching commitment. A co-worker’s daughter who had Down syndrome was looking for a job, and Forr was eager to have her as a classroom aide. When Forr moved to D.C., she brought the program to her new school.

St. Peter School on Capitol Hill hired two aides in January 2015. And this January there will be special-needs aides in at least three D.C. Catholic schools.

Teaching Together helps interested schools that can afford to pay an aide’s salary set up the program. If the school itself cannot pay the salary,Teaching Together steps in, with funds from donors and online contributions.

In addition to bringing employment to the aides and new outlooks to students, the program helps busy teachers. Forr’s current assistant, Alex Pellegrino, helps her by ­grading multiple-choice tests, sorting paperwork, and making copies. He also has a second job at Giant supermarket and is active in his church. Another aide, Anna Allen, has regular opportunities to teach short lessons to the third-grade students, to help with times tables, and to listen to students r­eading out loud. She moonlights at a preschool where she offers religious instruction, and at a vacation Bible school in the summer.

WINTER 2016

St. Peter School principal Jennifer Ketchum was immediately open to the idea of Teaching Together, seeing how it could benefit the entire school community.

Discussions about diversity are often limited to ethnic or socio-economic factors, Ketchum says, but people with “developmental delays or special needs also contribute to a truly diverse environment,” and bring unique skills and offerings.

“Recognizing that they are just like us, but with their own set of gifts, is something that has been beneficial for our children.”

Allen’s and Pellegrino’s classroom presence fosters a different sense of kindness, Forr says, and brings lessons that other teachers cannot offer. Allen, who was born with a serious brain injury, has shared her experience with students, and discussed how she overcame it. “Miss Allen is a natural teacher,” Forr says. She is firm with the third-graders, but shows a “high level of respect and love” for each pupil. She always kneels to their level when she speaks to them, and her words carry a different nuance when she explains “why we’re not laughing at each other.”

Pellegrino high-fives each student as they walk into the classroom—he has no favorites, Forr says, and his positive attitude is infectious. “When Mr. Pellegrino comes in here every day with joy on his face, it teaches our students that life needs to be faced with a smile.” He enjoys eating lunch with a different middle-school class each Tuesday and Wednesday.

Forr has seen growth in her ­students and the aides alike, thanks to their ­interplay. She admits there is some extra work for teachers at first. “You have to figure out how to have someone else in your classroom.” Once job duties are in place, though, it’s easy, she says. And ­having extra help always at hand makes her more effective.

The progr am, say s pr incipal Ketchum, “takes very little for such a big return.” More information is available at ­TeachingTogetherDC.com —Andrea Scott 9

interview If you’ve never been snowshoeing, Carrie and John Morgridge can show you how, high in the Rockies. If you’re lucky they’ll take you to dinner afterward, tasting a new vegetable dish and salmon tacos at their ranch, with an unobstructed view of the mountains and a pile of chew toys for their miniature Australian shepherd stretched out in front of you. The most excited talk from John and Carrie centers on people. There are stories about John’s father building Cisco Systems from a startup with 34 employees into one of America’s great companies. You’ll hear about Carrie’s childhood in Santa Barbara, working at a grocery store and pinching pennies. You’ll learn about the Morgridge Family Foundation’s work focused on education and worker training. And you’ll discuss the impact a donor can have through ­w ell-considered charity, a central topic of Carrie’s book, Every Gift Matters.

Philanthropy: Carrie, you often mention that you’re the low-income kid you’re trying to help today. What do you mean by that?

Carrie Morgridge: I was low-income with high potential. I had a burning desire to be something more than what I was, and I knew there was greater opportunity for me. So it’s easy to spot those kids when I do site visits. But in comparison to many of them, I’m really blessed.

We were ­low-­income but I had two parents who loved me. After working in foster care, I understand the importance of that even more. I had a mom and a dad who loved me, and when they divorced and remarried, I had four parents who loved me.

Philanthropy: How did you two meet?

Carrie Morgridge: I was a cocktail waitress at a bar in San Francisco and John was a patron; it was pretty much love at first sight. I still have the original napkin I put 10

my phone number on. Our first date was just incredibly successful. We found out that we share the same values, both wanted a family. My criteria at that time, and this may sound shallow, was that I needed to marry a gifted athlete. “If you can water ski and snow ski, we are going to be a good pair.” He passed the test for me. John, did you have a test for me?

John Morgridge: I’ll just say we’ve been married for 24 years.

Carrie Morgridge: But in all seriousness, getting outdoors is a huge part of our lives.

One of the things that helps us balance is our connection to nature. When we built our home in Steamboat, we lived on the property for 36 days camping. We got our own porta-potty and I bought a sun shower from Target. It was so much fun.

And to this day we remember those 36 days of summer more than living in this house. I’ve never met somebody who isn’t awed by a shooting star. Sunsets, stars, these don’t cost any money. They happen daily. It’s opening your eyes to really see what’s out there.

Philanthropy: Another big part of your life together is philanthropy. How did that begin?

Carrie Morgridge: When John and I were 30, with two small children, John’s parents asked us if we would like to be involved with their foundation. At first we gave away their money, and then we established a Fidelity Charitable Gift Fund account.

Then we grew into a donor-advised fund at Aspen Valley Community Foundation and a fund at the Denver Foundation.

These were all growing steps for us. So we explored all of the options for our next step and started our own foundation in 2008.

Philanthropy: Where did you start giving?

Carrie Morgridge: We had a two-year-old and a four-year-old, so going into education was clear. Our first grant was at a school. We walked in with 10,000 shares of stock in hand and said, “We want to help and we have this stock.”

PHILANTHROPY

Can you imagine the principal? She said, “What?!” Some of the parents got involved and helped us liquidate it. We have since evolved and don’t do it that way anymore. But even then we saw the power of giving—it was a $20,000 or $30,000 grant to give that school Internet back in the early ’90s. We also saw the parents come together, and the power of collaboration.

Philanthropy: How did you find this school?

Carrie Morgridge: It was a ­neighborhood school. I’ve been known to walk into schools and say, “I’m here to help. How can I help?”

Philanthropy: How do they respond to that?

Carrie Morgridge: Shocked at first. Now it’s become more common. But 15 years ago, it didn’t happen. Giving was for higher ed, not the K-12 sector.

Philanthropy: When you look at K-12 giving now, what are some of the changes you see?

Carrie Morgridge: One big change is the transition from whole group instruction to personalized learning. You can go through a quick lesson plan and then immediately dive into individualized learning, made possible with affordable technology, so that every kid is progressing at his or her own pace.

Sal Khan is a leader in this field, with Khan Academy. The second we discovered him ten years ago, I started saying education needed a thousand Sal Khans. Soon after, Hadi Partovi of Code.org appeared.

Right now in America there are great job opportunities in computer science yet only a tiny fraction of our schools teach it. Hadi has trained over 700 high schools and thousands of elementary schools. And coding is fun!

We played a role in bringing technology to KIPP classrooms. At first, only ten schools in the network were interested; we gave them a $750,000 grant.

Now we have 30 schools. Last year we

John C. Morgridge

CARRIE AND JOHN MORGRIDGE

received $10 million worth of grant requests from KIPP. Philanthropy: You’re often talking about investing in leaders. How do you know whom to support?

Carrie Morgridge: When you meet a great leader, you immediately know. Sal Khan, for instance, has a vision: “This is what we’re going to do, and this is how we’re going to do it. Now we just need your help with funding and this is how we’re going to get things done with your partnership.”

Hadi does the same thing: “These are the kids we need to touch. This is my expansion model.” Great leaders know the path and where they’re headed.

Our first motto is “feed the hungry.”

We look for a principal, a teacher, an organizer, who is hungry for change. From there, we have meetings on what we could do as a partner.

John C. Morgridge

Philanthropy: You’re supporting policy efforts as well?

Carrie Morgridge: The funny thing is we always said we wouldn’t. We realized we couldn’t do everything, so we focused even our education down to this little slice of pie.

Our slice used to be literacy. Then once we discovered Sal Khan we went into math too.

But investing in Sal Khan meant investing in technology in the classroom, and we learned that schools had all these old, outdated computer labs. That led us to policy. As Rick Hess puts it in his book Cage-Busting Leadership, there are all of these bars around a school preventing flexibility and innovation. Recognizing that compelled us to get involved in policy. We don’t do much and it is behind the scenes, but we have done some advocacy to help school districts open themselves to new ideas.

Philanthropy: What are you most proud of in your education work thus far?

Carrie Morgridge: I’m proud of our efforts in literacy in low-income areas.

Through our partnership with Book

Carrie and John Morgridge love the great outdoors and have a family tradition of hiking a “fourteener” —a 14,000 foot peak —every year on their son’s birthday. Above they are at the summit of Quandary, outside Breckenridge, Colorado, in a photo taken by their son, John.

Trust, which targets kids grades K-5, we’ve given away 615,000 books over the years. The other program we’re longtime partners with is called Reading Plus.

Imagine being passed through school and not being able to read. Reading Plus can help you learn. I’m also pleased with what we’re doing at Share Fair Nation, training teachers to integrate technology into their classrooms.

John Morgridge: I’m most proud of the accelerant we’ve been able to pour onto individuals when we tell them, “We’re with you, and we are here to support you financially in our collective mission.” It’s meeting people with the same passions, from kindergarten teachers who cry when WINTER 2016

they see their class receiving Book Trust books, to the superintendent who is able to get technology into his classrooms.

Philanthropy: Recently you’ve shifted some focus to helping people find good jobs.

Carrie Morgridge: O ur foundation has been growing up while our kids have grown up. We went from literacy when they were young to discovering Sal Khan and math when they were in middle and high school, and now they are graduates looking for jobs. When our son graduated he couldn’t find a mechanical engineering job right off the bat; employers were looking for people with three to five years of experience.

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interview We hear all the time that if you’re an ­engineer, getting a job is a slam dunk, but in reality even that is not. So we wondered, what else? What if you’re not a college graduate?

At The Philanthropy Roundtable’s annual meeting in Utah we heard good things about Catholic Charities Fort Worth, and followed up with a site visit. Its leader, Heather Reynolds, knew where she was going and what she wanted. She just needed funding. Her work could be a national model for how we help ­low-­income families—surround them with services that steer them toward housing, jobs, or college, and from a first job to a better job, and off government subsidies.

We started to ask ourselves: Is our end goal really to get kids through high school? We re-evaluated, and now say our goal is a livable family wage.

I’m especially excited about CCFW’s bold vision of moving people from welfare to a W-2 pay stub. They believe everyone can move beyond poverty, given the right kind of support and motivation.

What Catholic Charities has taught us is that a small amount of wraparound services can secure a family and break the poverty cycle. I’ve never been so excited about a new sector for the foundation as I am about workforce development. When you help a family get jobs they have more choices: where to send their kids to school, where and how to live. But when you’re living in high poverty, many of your choices are gone. We want to give people choices that lead to them being self-sufficient and earning their life.

John Morgridge: For us, just giving people a place to live and feeding them isn’t enough. Even getting people a great education isn’t enough unless it enables them to pursue satisfaction. That’s the bottom line: earned happiness. Not just to graduate from high school or college, but to find a fulfilling career, a fulfilling partner, a f­ ulfilling life.

Carrie Morgridge: We’ve had some great successes with food banks, which have grown along with us too. Our number-one food bank in Orlando, Florida, has now gone into job creation; they say food is the hook for deeper assistance.

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Philanthropy: You recently created a position for Robert Doar at AEI to study poverty.

Carrie Morgridge: We approached AEI about working with us on foster-care policy. Arthur Brooks suggested that we broaden the focus to extreme poverty, and he knew just the guy. Robert Doar ran New York City’s welfare system and decreased welfare claims by 500,000. He shares our values. Robert has been with AEI for two years now, and has produced impressive scholarship. We’re working with a pilot program for Colorado’s foster kids based on some of his research.

Colorado is the first state in the country that allowed the departments of education and public health to look at each other’s data. If your student is in foster care or homeless and you don’t understand what he or she is going through, it may not be a teachable day for the child. Now, there is a woman whose job is to go into schools that have homeless or foster-care kids and train teachers on how to help; she’s doing amazing work keeping these kids in school.

We did a study with the University of Northern Colorado on a foster child’s chances of graduating high school: 27 percent. It’s lower than the chances of a homeless child graduating. Family support is the most important influence on the course of your life, something Robert understands.

Philanthropy: How do you find philanthropic work worth doing?

Carrie Morgridge: The first advice I would give is to accept invitations to those conferences that sing to your heart. If it’s an education conference, go. If it’s a church conference, go. When you see great leaders and great things happening, meet them. I always say that we chase people. You have to partner. I can’t stress that enough. We never do anything alone.

Our motto is “Today Is a Yes Day.” I’m working in Florida with Project L.I.F.T., a ministry for troubled teens. I identified the leader and all the players I hoped to see at the table. At our first meeting, anyone who was negative was left out of the next meeting. New people came in and filled those chairs. Now we’re all moving forward PHILANTHROPY

together, and their attitude is, “Of course, we can make it work. Let’s figure it out.”

Philanthropy: How have your parents encouraged giving and how are you ­thinking about that for your children?

John Morgridge: I’ve been on my parents’ foundation board for nearly 20 years.

My late brother and my sister and I are similar in many ways but also different, and we each went about philanthropy and working with my parents on their foundation differently. My parents were smart enough to let us go down our individual roads, with parameters. They tried to make sure that the grants made sense.

We’ve tried to pass that thinking on to our children. They both understand that philanthropy is extremely important in our lives and very fulfilling, very challenging. We want to help them reach for their own sense of accomplishment.

Carrie Morgridge: John and I didn’t get involved with his parents’ foundation until we were both in our 30s and had some life experience. We think 30 is a good age to fully engage our kids too. Are they involved now? Sure. We ask them their opinion.

We take them to a lot of the places that we’ve supported. We want them to be exposed but not carry the responsibility on their shoulders. Being a philanthropist means that you’re trying to solve complex problems and help people. You need to be secure and comfortable with who you are to do that well. It’s an honor not to be taken lightly. We never want the kids to take the foundation for granted.

John Morgridge: We work with other kids too, via a high-school philanthropy group called the Student Support ­Foundation. We give each club $4,000 a year to grant within their school community. As the money dwindles and their budget tightens up, they begin to really look hard at proposals and revisit grants they gave earlier in the year. Sometimes they say, “I wish we had that $80 back because this is a much more worthy grant.” Every donor goes through the same process they do. Every penny matters, and organizations need to look at money that way. P

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PHILANTHROPY

Library of Congress / Bain News Service; Gap Corporate Communications; The Intrepid Sea, Air & Space Museum; CC-BY-SA / Nationaal Archief Fotocollectie Anefo Nationaal Archief; San Diego History Center; istockphoto.com

By Karl Zinsmeister

hilanthropy is a very big part of what makes America America.

Start with the brute numbers: Our nonprofit sector now employs 11 percent of the U.S. workforce. It will contribute around 6 percent of GDP in 2015 (up from 3 percent in 1960). And this doesn’t take into account volunteering—the equivalent of an additional 5-10 million full-time employees (depending on how you count), labor worth hundreds of billions of dollars per year.

America’s fabled “military-industrial complex” is often used as a classic example of a formidable industry. Well guess what? The nonprofit sector passed the national-defense sector in size way back in 1993.

And philanthropy’s importance stretches far beyond economics. Each year, seven out of ten Americans donate to at least one charitable cause. Contributions are from two to 20 times higher in the U.S. than in other countries of comparable wealth and modernity. Private giving is a deeply engrained part of our culture—a font of human creativity and crucial source of new solutions to problems. Voluntary efforts to repair social weaknesses, enrich our culture, and strengthen community life have long been a hallmark of our country.

Yet, somehow, there exists no definitive resource that chronicles our philanthropy and puts it in a context where it can be fully appreciated. Until now.

The Philanthropy Roundtable decided that the great American undertakings of private giving and THE ALMANAC OF AMERICAN PHILANTHROPY

PhilanthropyRoundtable.org (202) 822-8333

v­ oluntarism deserve a worthy standard reference.

So we created an entirely new work. It helps readers understand the potency of philanthropic institutions, explains their influence on our daily lives, and profiles some of the fascinating men and women who have given creatively to improve our country in thousands of ways.

The Almanac of American Philanthropy, released in January, will appeal to everyday citizens, donors, charity workers, journalists, national leaders, and culture and history buffs. It offers an authoritative collection of major achievements of U.S. philanthropy, lively profiles of the nation’s greatest givers (large and small), and useful compilations of the most important ideas, statistics, polls, literature, quotations, and thinking on this quintessentially American topic.

The facts, stories, and history contained in the Almanac will fill gaping practical and intellectual holes in our self-awareness. And in this special issue of ­Philanthropy you’ll get a detailed preview. The pages that follow present a rich, illustrated introduction not only to this important new book, but to the vital institution of philanthropy itself.

THE ALMANAC OF AMERICAN PHILANTHROPY

Library of Congress / Bain News Service; Gap Corporate Communications; The Intrepid Sea, Air & Space Museum; CC-BY-SA / Nationaal Archief Fotocollectie Anefo Nationaal Archief; San Diego History Center; istockphoto.com

P

THE ALMANAC OF AMERICAN PHILANTHROPY

a lively compendium of

Great Donors Major Achievements Essential Books & Quotations Vital Statistics & Polls History & Timeline and more!

Karl Zinsmeister The Philanthropy Roundtable AlmanacOfPhilanthropy.org

WINTER 2016

Karl Zinsmeister is creator of The Almanac of American Philanthropy, just published by The Philanthropy Roundtable. This excerpt is adapted from the book’s Introduction and its national poll results.

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Part I “How Philanthropy Fuels American Success”

by Karl Zinsmeister

DONORS + PASSION = POTENT ACCOMPLISHMENTS here are Iliads and Odysseys of human interest in American philanthropy. Some tremendously intriguing Americans of all stripes have poured time and treasure into helping their fellow man. Absent their passion and resources, our nation would be less thriving, and our individual days would be flatter, darker, more dangerous, and less happy. Let’s meet some of these philanthropists.

Larger-than-life characters Ned McIlhenny, born and raised on a Louisiana bayou, was an expert on camellias, on alligators, on the hundreds of varieties of bamboo that grow around the world, and on wild turkeys. He was an Arctic explorer. His skills as a hunter once helped save the lives of 200 ice-bound sailors. He was an ornithologist who personally banded more than a quarter of a million birds. And he also had a day job selling the hot-pepper condiment invented by his family: McIlhenny Tabasco sauce.

It turns out there is real money in burning mouths, and McIlhenny used his for an amazing array of good works. For one thing, he got very attached to a fellow native of Louisiana’s bayous: the snowy egret. When McIlhenny was young, hats bearing egret plumes were for ladies what Coach handbags are today. This fashion mania had the effect of nearly driving the snowy egret to extinction, and no one was doing anything about it. So the philanthropist swung into action.

McIlhenny beat the bushes in wild parts of the island his family owned and managed to find eight baby egrets in two nests. He raised these hatchlings in a protected area, paid for their care over a period of years, and by 1911 had built up a population of 100,000 egrets on his private refuge. He simultaneously recruited John ­Rockefeller, Olivia Sage, and other philanthropists to buy up and preserve swampy land in Louisiana that is important as winter habitat of migratory waterfowl, including egrets. In this way he rescued a magnificent creature that was on the verge of disappearing from the Earth.

Later in his life, McIlhenny took action to stave off a very different kind of extinction. He had been raised with Negro spirituals in his ears, and loved them dearly.

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PHILANTHROPY

Around his sixtieth birthday, McIlhenny realized that these songs were dying out and at risk of being forgotten forever. So he again sprang into action with both his checkbook and his personal involvement.

He used his contacts to find two elderly singers who still remembered many of the songs—which until then had existed only in an oral tradition—and he hired a musicologist to sit with him as these ladies performed, so the lyrics and melodies could be written out. They took care to preserve the music in scrupulous detail, exactly as it had been handed down among generations of slaves.

McIlhenny then published these songs as a book, which became a classic of the genre. All but a handful of the 125 spirituals he captured were unrecorded in any other place, so he single-handedly saved these soulful artifacts of American history for future generations.

McIlhenny’s songs included one that provided Martin Luther King Jr. with his most famous line: When we allow freedom to ring…from every village and hamlet…we will…speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and ­Catholics, will be able to join hands and sing in the words of the old Negro spiritual: Free at last! Free at last!

Thank God Almighty, we are free at last!

Another red-blooded American philanthropist who helped freedom last was Alfred Loomis. His philanthropic field was national defense. Many of us think of defense as the ultimate government responsibility, and a place w ­ ithout room or need for philanthropy. So it may come as a surprise to learn that private donors have played important roles in securing our nation ­throughout its history. They financed our Revolution.

They created the modern field of code-making and -breaking. Donors s­ ingle-handedly developed the field of rocketry, and fanned private space launch into fiery success. (For details on how philanthropy has repeatedly bolstered our national defense, see “Donors Who

E. A. McIlhenny Enterprises, Inc., Avery Island, La

T

E. A. McIlhenny Enterprises, Inc., Avery Island, La

Ned McIlhenny was a high adventurer whose energy, wide-ranging interests, and

Come to the Aid of their Country” in the Summer 2015 issue of Philanthropy.)

No donor was more crucial in building America’s military strength than Alfred Loomis. After financing much of the electrification of rural America as a Wall Street dealmaker, he became convinced that the stock market was overvalued and converted ­everything he owned to cash and T-bills in 1929. When the ­October 1929 Crash came, he was not only protected but in a perfect position to go shopping at bargain prices. By the early 1930s Loomis was one of the richest men in ­A merica, and at age 45 he retired from finance to put all of his time and energy, and much of his money, into his true love: science. He set up one of the world’s great science labs in a mansion near his home, invited top researchers from around the world to experiment there, and conducted his own ­state-of-the-art investigations.

While visiting Berlin in 1938, Loomis was disturbed to find how popular Hitler was, and how good German scientists were. He returned home convinced that war

fortune allowed him to rack up many fascinating and consequential achievements as a philanthropist. He took action to rescue the endangered snowy egret, a fellow resident of Louisiana’s bayous. And he also saved from extinction many classic Negro spirituals, which he grew up with and loved dearly.

was brewing, and that science would have a lot to do with who won. So he poured himself and his money into one new field in particular: using radio waves to detect moving objects. His lab quickly became the national leader in what we now call radar. Practical radar sets created under ­Loomis’s supervision were delivered to the Army and Navy by the thousands, and turned the tide of World War II. If radar won the war, the atomic bomb ended it. And as it happens Alfred Loomis had a lot to do with that as well. The method he used for his radar triumphs was to relentlessly gather the best scientific minds, without regard to their prior specialties, give them rich resources, and protect them from bureaucratic interference. When it became apparent how powerful Loomis’s modus ­operandi was, it was directly copied for the Manhattan Project; indeed, most of his scientists were transferred over to work on the atomic bomb. Franklin Roosevelt WINTER 2016

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much of the electrification of rural America, then became one of the richest men in the country after anticipating the 1929 stock-market collapse. As a philanthropist he personally launched and led a crash research program that gave U.S. forces the military radar that won World War II, and created the research template for the atomic bomb, which ended the war.

later said that aside from Winston Churchill, no civilian did more to win World War II than Alfred Loomis.

By the way, it isn’t only Alfred Loomis’s brilliant model for conducting crash research that lives on today. He also left behind a flesh-and-blood embodiment of his whirlwind entrepreneurial philanthropy.

His great-grandson is Reed Hastings—who, as CEO of N ­ etflix and one of the nation’s most influential progenitors of charter schools as a donor, has been a huge game-changer in both business and philanthropy.

Philanthropic passion Another entrepreneurial philanthropist who put deep imprints on America was George Eastman. As founder of Kodak in upstate New York, he popularized photography in the early 1900s. When he began, the photographic process was all art and guesswork, and no science.

During the frantic start-up phase of his company, for example, a calamitous failure of the gelatins used in his photo-developing process threatened to kill his firm. It eventually turned out that the cows whose carcasses were being boiled down to create the industrial gelatin had been shifted to new pastures where their forage lacked sulfur, and that tiny missing ingredient was enough to wreck the delicate chemical process.

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PHILANTHROPY

John Phelan; Library of Congress / Bain News Service; Kurt Brownell Photography

so he could pursue lab experiments full time. He sold the bonds that financed

MIT Museum

Alfred Loomis was a brilliant scientist who set out to make a fortune on Wall Street

Determined to figure out the basic chemistry of photography so he wouldn’t be prisoner to these inconsistencies, Eastman started hiring chemists from an obscure little school in New England known as Boston Tech. Grateful for the well-trained minds he came to rely on, Eastman later funded much of the transformation of Boston Tech into today’s MIT, including building the new campus where that university now resides. Eastman likewise nurtured the University of Rochester into a great research and educational facility, including creating its medical school from scratch.

Eastman adored music, and had a huge pipe organ installed in his home and played every morning to wake him as his alarm clock. One friend who accompanied him on a New York City trip where they took in 12 operas in six days described Eastman as “absolutely alcoholic about music.” This passion led to one of the great cultural gifts in American history, as Eastman methodically created and built to world prominence the Eastman School of Music at Rochester, which currently enrolls 500 undergraduates, 400 graduate students, and 1,000 local child and adult students.

The Eastman School was important in Americanizing and popularizing classical music, and remains one of our country’s top cultural institutions.

Another great American donor was Milton ­Hershey.

Many readers will insist that his crowning gifts to ­humanity came in brown bars and silver kisses. By transforming chocolate from expensive rarity to treat affordable by all, he did create an explosion in new ways of making Americans feel happy.

Hershey’s deepest passion, though, was his remarkable school for orphans, which he and his wife created and ultimately gave their entire company to. Hershey’s father was a neglectful drinker, and the separation of his parents turned his boyhood into a shoeless and hungry ordeal. To relieve other children of similar trials he built up his orphanage in a gradually surging ring of ­family-like houses encircling his own home, where each small group of youngsters was overseen by a married couple who lived with them. In addition to loving oversight, the school provided a thorough basic education and excellent training in industrial crafts.

Hershey was a constant physical presence among his youngsters until his death in 1945. At one point he announced, “I have decided to make the orphan boys of the United States my heirs.” And he did—endowing the Milton Hershey School with a nest egg currently worth $11 billion. That allows the school to serve 2,000 endangered children from around the U.S. every year, putting many of them on a dramatically elevated life path.

Philanthropists come in all stripes. That’s one of the field’s strengths: Different givers pursue different visions, so you get many solutions to problems rather than just one.

George Eastman was the founder of Kodak and a muscular philanthropist. His anonymous gifts transformed a sleepy commuter college known as Boston Tech into today’s MIT (left). Among other boosts, he created the campus where this renowned science educator and engine of prosperity is now located. Eastman also built the University of Rochester into a top-rank institution. He conceived and funded, from scratch, both its medical school and its renowned Eastman School of Music (right),

John Phelan; Library of Congress / Bain News Service; Kurt Brownell Photography

MIT Museum

which was important in Americanizing and popularizing classical music, and in turning film into an art form.

If Milton Hershey’s cure for child neglect was large-scale fostering, Katharine McCormick’s attempt was to make orphans rarer by manipulating biology. It’s pretty widely known that medical breakthroughs like the polio vaccine and hookworm eradication were products of philanthropy.

But how many people know that the birth-control pill was the creation of a sole private funder?

A reaper of the International Harvester fortune, McCormick was an early women’s-rights activist. She initiated a connection with Gregory Pincus, a brilliant biologist who had been fired by Harvard for ethical lapses, to discuss whether it might be possible to prevent pregnancy by means as easy as taking an aspirin. Before leaving the room after their first meeting, McCormick wrote Pincus a check for $40,000.

She funded his private laboratory steadily ­thereafter, eventually investing the current equivalent of about $20 million in their quest to develop a daily ­birth-control pill. McCormick was the sole and entire funder of this work, and hovered constantly over the lab, influencing many of its research choices. By 1957 this duo had an FDA-approved pill, and the Earth wobbled a little on its axis. McCormick reveled in her accomplishment, even taking her own prescription to be filled at a local

pharmacy—despite being a matron in her 80s at that point—just for the sheer frisson.

Lots of little guys Dwight Macdonald once described the Ford Foundation as “a large body of money completely surrounded by people who want some.” It’s easy to look at a big pile of silver like Ford and think that’s what American philanthropy is all about. But philanthropy in the U.S. is not just a story of moguls. In fact, it is not even primarily about wealthy people or (even less) big foundations.

Do you realize that only 14 percent of charitable giving in the U.S. comes from foundations? And only 5 percent from corporations? (See pie chart on next page.)

The rest comes from individuals—and the bulk of that from everyday givers, at an annual rate of about $2,500 per household. Even among foundations, there is a strong tilt toward the small. Less than 2,000 foundations (2 percent of all) have assets of $50 million or more today. Most foundations are modest in size. And most giving is even smaller—but it is practiced very widely.

It is inexorable giving by humble Americans that constitutes the main branch of U.S. philanthropy. Take Gus and Marie Salenske, a plumber and nurse who lived quietly WINTER 2016

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broke out, the U.S. Navy possessed a total of seven ­frigates and less than a dozen other seagoing ships. The ­British Navy numbered a thousand warships, including 175 double-gundeck “ships of the line,” of which the United States had none. The comparison by firepower was even starker: a total of 450 cannons carried by the U.S. Navy, versus 27,800 afloat in the Royal Navy.

So how did America fight this naval contest to a draw? Individually funded, decentralized warfighting—in the form of privateers. Not long after hostilities were declared, there were 517 privately equipped and manned corsairs defending the U.S. During the course of the War of 1812, the U.S. Navy captured or sunk about 300 enemy ships, while U.S. privateers captured or sunk around 2,000, blasting British trade.

The American merchants and ordinary sailors who voluntarily organized themselves into fighting units got everything they hoped for. No more impressment of U.S. seamen. A restoration of free trading.

And deep respect for the ability of America’s small colonies—weak of government but strong of civil society—to defend their interests.

That same pattern has been followed in many other sectors of American society. In chronicling the astonishing bloom of colleges in the U.S., author Daniel Boorstin noted that the state of Ohio, with just 3 million inhabitants, had 37 colleges in 1880. At that same time, England, a nation of 23 million people, had four. Why the difference? Education philanthropy.

Education philanthropy in the U.S. stretches back to our earliest days, a century and a half before we even had a country. The New College was established in the ­M assachusetts Bay Colony in 1636.

Three years later it was renamed, after young minister John H ­ arvard donated his library and half of his estate to the institution.

America’s first recorded fund drive was launched in 1643 to raise money for the college; when 500 British pounds were collected it was deemed a “great success.”

The next year, colonial families were asked to donate a shilling in cash or a peck of wheat to support the citadel of higher learning in their midst. These voluntary donations, known as the “college corne,” sustained Harvard for more than a decade.

Fast forward to 2015. Nearly 50 American colleges were in the midst of fundraising campaigns aimed at raising at least a billion dollars in donations. Private gifts power even our public universities—institutions like the ­University of Virginia and the University of California, Berkeley now receive more revenue from voluntary ­giving (gifts and interest off previous gifts) than they do from state appropriations.

Relying on private individuals to train up the next generation of leaders, rather than leaving that

Oseola McCarty —a poster woman for America’s many millions of sacrificial

everyday givers —hugs Stephanie Bullock, the first recipient of a full-tuition

McCarty Scholarship. Several of these are given out each year by the University of Southern Mississippi, thanks to the hardworking washerwoman’s thrift and generosity.

r­ esponsibility to the crown or church, was an entirely new development in higher education. It burst forth across our new land, producing the College of William & Mary in 1693, the precursor to St. John’s College in 1696, Yale in 1701, and many others. Sub-innovations followed, like the spread of the endowed professorship from a first example in 1721. The pervasiveness of the endowed chair in the U.S. today tempts one to assume that this practice must be common everywhere, but actually it remains rare outside America, where it has helped drive our universities to international pre-eminence.

Our nation’s great bloom of universities illustrates perfectly the fruitful mixing of little and big givers. Institutions like the Rensselaer Polytechnic Institute in upstate New York—a pioneer of science-based education that granted the first civil-engineering and advanced agriculture degrees in the English-speaking world—relied on big gifts from major patrons like Stephen R ­ ensselaer. Other places such as Western Reserve University in Ohio, founded just two years after Rensselaer and likewise destined to become a science powerhouse, relied on an entirely different

Can anything large and consequential really be accomplished by little and middling givers, or by the very limited population of big givers? The clear answer from American history is yes.

WINTER 2016

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­ hilanthropic model—the sacrificial giving of thousands p of local neighbors on the frontier. One supporter spent a whole winter hauling building supplies to the school from a quarry ten miles away. Another typical family pledged a portion of their annual milk and egg sales.

Starting in the 1840s, hundreds of Eastern churches began to pool small donations to support collegiate education across the Western frontier. Within 30 years they had raised more than a million dollars to sustain 18 colleges. Hillsdale College was built up at this same time after professor and preacher Ransom Dunn circled through more than 6,000 miles of wild lands collecting nickels and dimes and dollars from settlers.

The power of personalism Pledging your family egg sales to a local institution. Hauling stone all winter for a good cause. Donating your shoeshine tips. In our country, giving is often very personal.

Michael Brown was a Broadway lyricist with a new hit musical under his belt, so his family was ­enjoying a burst of unanticipated prosperity. For their 1956 ­Christmas celebration, he and his wife and two sons hosted a close friend, a young writer who was far from her home in the South. Toward the end of their gift exchange, the Browns handed their guest an envelope.

Inside was a note that read: “You have one year off from your job to write whatever you please. Merry Christmas.”

The writer’s name was Harper Lee. When she had decided to try to make it as a novelist, she relocated (like many before her and since) to New York City. After getting there she found (like many before her and since) that she was so preoccupied with paying her rent—by working at an airline office and bookstore—that she had little time to focus on her literary craft. The Browns noticed she was struggling, and through some very personal philanthropy changed the course of U.S. literature.

Private Funding at Public Colleges

UVA

UC Berkeley

income in 2014

income in 2013

$667 $538

$285

$325

$320

gift income

state funding

$146

gift income 22

state funding

tuition and fees

tuition and fees

PHILANTHROPY

With their donation in hand, Harper Lee quit her retail jobs. And during that gift year she wrote To Kill a Mockingbird. It won the Pulitzer Prize in 1961 and became one of the most influential American books of all time.

While this was an especially intimate contribution, this kind of personalism is not at all unusual in ­American philanthropy. In fact, gifts where the givers and recipients are involved with each other, familiar with one another’s characters, and committed to each others’ flourishing, are some of the most successful forms of philanthropy. You can see this yourself any day. Volunteer at a Habitat for Humanity building project and you will often work next to the person who is going to occupy the house. Sponsor a child in an inner-city Catholic school (or an overseas village) and you will have opportunities to follow the life progress of the beneficiary, share in his or her dreams, and perhaps attend a graduation.

Knowing the character of the person you are trying to help—strengths and weaknesses, needs and temptations—allows the giver to focus his help much more effectively, and to avoid wasteful or mistaken or perverse forms of “help.” As William Blake put it, “If you would help another man, you must do so in minute particulars.” One man’s medicine can be another man’s poison; donors must prescribe for particular people, not treat “mankind” as some cold, interchangeable abstraction. Much of the best anti-poverty work carried out during America’s immigrant waves and transitions to industrialism during the 1800s and early 1900s took highly personal forms, where givers rolled up their sleeves and offered not only money but mentoring and guidance and support to specific men and women in need.

Stephen Girard was one of the five richest men in American history, when his wealth is measured as a ­percentage of GDP. But when the yellow-fever epidemics swept his hometown of Philadelphia—as they did many summers in the years before anyone realized that the deadly malady was carried up from the tropics on sailing ships, and spread by mosquitoes—Girard was a tireless personal leader in the efforts to tamp down the disease. This required courage, as the terrifying affliction would kill hundreds of people per day in a horror of delirium and bloody vomiting.

Residents who could afford it generally fled the city when epidemics roared through. Not Girard. He stayed in Philadelphia in 1793, 1797-98, 1802, and 1820 to guide relief efforts, fund hospital operations, and provide direct care for individuals—often bathing and feeding the dying himself. He routinely put his personal and business affairs on hold during outbreaks. “As soon as things have quieted down a little you may be sure I shall take up my work with all the activity in my power,” he wrote to a friend in 1793. “But, for the moment, I have

In a highly personal act of philanthropy (of which there are millions in our country) Michael Brown noticed that his friend Harper Lee was struggling. He and his wife decided to give her one year of support so she could focus on her writing.

The direct result was one of America’s most beloved works of art.

devoted all my time and my person, as well as my little fortune, to the relief of my fellow citizens.”

Nicholas Longworth grew up poor, and apprenticed to a shoemaker for a period, before eventually earning great wealth. He gave much of it away to what he called “the devil’s poor,” whom he identified and helped in extremely personal ways. “Decent paupers will always find a plenty to help them, but no one cares for these poor wretches. Everybody damns them, and as no one else will help them, I must,” he concluded.

Longworth distributed food directly to these most abject cases, built apartments to salve their ­homelessness, and held personal sessions where he would listen patiently to sad stories and offer solace and assistance.

When he died in Cincinnati in 1863, Longworth’s funeral procession numbered in the thousands, a great many of them outcasts. Drunkards, prostitutes, beggars, and criminals sobbed at the loss of their one true friend.

The Tappan brothers, Arthur and Lewis, were successful New York merchants and among this country’s most accomplished philanthropists at changing society and politics. They worked on a much more national scale than Longworth or Girard. Yet their machinations were often just as personal.

Fired by their evangelical Christian convictions, the Tappans were leading donors to the cause of abolishing slavery. After their funding turned the American Anti-­Slavery Society into a mass movement with 250,000 members, mobs attacked their homes and businesses. Arthur escaped with his life only by barricading himself in one of the family stores well supplied with guns. Lewis’s home was sacked that same evening, with all of his family possessions pulled into the street and burned by slavery apologists.

The brothers did not buckle. Lewis left his house unrepaired—to serve, he said, as a “silent anti-slavery preacher to the crowds who will flock to see it.” In addition, the two men decided to flood the U.S. with anti-slavery mailings over the following year. This brought them additional death threats and harassment, none of which slowed them down.

When a group of Africans who had been captured

by Spanish slavers rose against the crew of the ship transporting them and eventually came ashore on Long Island, Lewis immediately organized their defense against murder charges for having killed a crewmember. He decamped to Connecticut, where he clothed and fed the defendants, located and hired an interpreter of their African dialect, and brought in Yale students to tutor them in English, American manners, and Christianity. Then he retained top WINTER 2016

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by philanthropy. The High Line, a “linear park” pictured here that snakes through Manhattan along an abandoned rail bed, was built (and is operated) by a private nonprofit fueled with more than $100 million of donated money. It instantly became one of the most popular greenspaces in the world, and a spur to an estimated $2 billion of private redevelopment in surrounding neighborhoods.

Similar donor-driven parks have recently garnered spectacular public acclaim in dozens of U.S. cities.

lawyers to represent their interests. He attended the court proceedings himself every day, organized a ­public-relations campaign, and eventually got the Africans freed after ­pushing their case all the way to the U.S. Supreme Court.

His personal devotion and single-handed financing turned abolitionism into a cause célèbre.

If the campaigning of the Tappans on behalf of slaves was impressively personal, the devotion of Joseph de Veuster to miserable lepers was out-and-out heroic. Better known as Father Damien after he became a Catholic priest, de Veuster thought it inhumane that when leprosy

Gifts where the giver and recipient are involved with each other, familiar with one another’s character, and committed to each others’ flourishing, are some of the most successful forms of philanthropy.

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Wasabi Bob

We are living in a golden age of new and rehabilitated urban parks—all driven

reached the Hawaiian Islands, victims were forced to live in isolation on a wild peninsula without any buildings or goods or services. The newly diagnosed would be dropped off with nothing but a few tools and some seeds, and proceed to live miserably in shelters made of sticks.

Father Damien moved into the leper colony himself in 1873, brought anti-social residents into line, rescued orphans, provided medical care, and organized building and gardening efforts. He marshaled fundraising letters that brought in donations sufficient to pay for his improvements, and to bury the 1,600 people whose funerals he presided over in a period of six years. He died himself at age 49 from complications of leprosy. The sacrifices made by Father Damien are especially piercing, but there are many examples of philanthropists who risked happiness, health, and even life itself to carry out their good works.

Philanthropy regularly grows out of pain. The death of John Rockefeller’s grandson from scarlet fever in 1901 cemented his desire to build a medical-research facility that could banish such afflictions. The result was ­Rockefeller University, whose researchers over the years have been awarded dozens of Nobel prizes. The organizer and funder of today’s wildly successful National Kidney Registry, which matches donors to patients with organ failure, acted after his ten-year-old daughter was nearly lost to kidney disease.

America’s most fecund artist colony, known as Yaddo, was created by Thomas Edison’s financial partner Spencer Trask and his wife, Katrina, as a cathartic effort after the couple endured the profound pain of losing all four of their young children, in separate incidents, to disease and early death. The Trasks envisioned a place where “generations of talented men and women yet unborn” would be “­creating, creating, creating.” Since its opening in 1926, Yaddo has nurtured 71 Pulitzer Prize winners, 68 National Book Award winners, a Nobel literature laureate, and countless other productive musicians, playwrights, and novelists. The Trasks sweetened and softened a world that may have felt hard and bitter when they started giving.

Though it sometimes grows out of pain, philanthropy is more frequently sparked by emotions like gratitude and joy. The first charity hospital in America was created in, of all places, 1735 New Orleans—at that point a ragingly ragged and largely ungoverned city first populated just 18 years earlier by people drawn from jails, poorhouses, and urban gutters. The hospital benefactor was a dying sailor named Jean Louis, who had made some money for the first time in his life by going into the boatbuilding business in the brand-new French colony.

He wanted to pass on his good fortune. And his Charity Hospital offering free care to the indigent became one of the most useful of its type, finding a vast market in a town known even then for creativity in vice.

Part II “How Philanthropy Fuels American Success”

by Karl Zinsmeister

GOOD CHARITY, BAD CHARITY?

Wasabi Bob

S

ome activists today are eager to define what is good or bad, acceptable or unacceptable, in other people’s giving. Princeton professor Peter Singer has lately made it almost a career to pronounce that only certain kinds of philanthropic contributions ought to be considered truly in the public interest. Only money given directly to “the poor” should be counted as charitable, he and others argue.

Former NPR executive Ken Stern constructed a recent book on this same idea that charity must be “dedicated to serving the poor and needy.” Noting that many philanthropists go far beyond that limited population, he complains that it is “astonishingly easy to start a charity. The IRS approves over 99.5 percent of all charitable applications.” He disapprovingly lists nonprofits “that have little connection to common notions of doing good: the Sugar Bowl, the U.S. Golf Association, the Renegade Roller Derby team in Bend, Oregon, and the All Colorado Beer Festival, just to name a few.”

Is that a humane argument? Without question, the philanthropy for the downtrodden launched by people like Stephen Girard, Nicholas Longworth, Jean Louis, the Tappans, Milton Hershey, Albert Lexie, and Father Damien is deeply impressive. But the idea that only generosity aimed directly at the poor (or those who agitate in their name) should count as philanthropic is astoundingly narrow and shortsighted. Meddling premised on this view would horribly constrict the natural outpouring of human creativity.

Who is to say that Ned McIlhenny’s leaps to preserve the Negro spiritual, or rescue the snowy egret, were less worthy than income-boosting? Was the check that catalyzed Harper Lee’s classic novel bad philanthropy?

Were there better uses for Alfred Loomis’s funds and volunteer management genius than beating the Nazis and Imperial Japanese military?

Even if you insist on the crude utilitarian view that only direct aid to the poor should count as charity, the reality is that many of the most important interventions that reduce poverty over time have nothing to do with alms. By building up MIT, George Eastman struck a mighty blow to increase prosperity and improve the health and safety of everyday life—benefiting ­individuals

at all points of the economic spectrum. Givers who establish good charter schools today are doing more to break cycles of human failure than any welfare transfer has ever achieved. Donors who fund science, abstract knowledge, and new learning pour the deep concrete footings of economic success that have made us history’s most aberrant nation—where the poor improve their lot as much as other citizens, and often far more.

And what of the private donors who stoke the fires of imagination, moral understanding, personal character, and inspiration? Is artistic and religious philanthropy just the dabbling of bored and vain wealth-holders? Aren’t people of all income levels lifted up when the human spirit is cultivated and celebrated in a wondrous story, or haunting piece of music, or awe-engendering cathedral?

When a donation is offered to unlock some secret of science, or feed an inspiring art, or attack some cruel disease, one can never count on any precise result. But any definition which denies humanitarian value to such giving is crabbed and foolish. Much of the power and beauty of American philanthropy derives from its vast range, and the riot of causes we underwrite in our millions of donations.

To illustrate this, let’s take a somewhat random whirl through some of the evidence packed into The Almanac of American Philanthropy. We’ll begin with very tangible products like historic buildings and parks, consider services like medicine and education, and touch on more ethereal accomplishments in fields like the arts.

The wild richness of American philanthropy How many readers know that some of America’s top cultural treasures—the homes of our founders—are preserved and kept open to the public not by the National Park Service or other agency of government but rather by privately funded nonprofits? George Washington’s Mount Vernon was saved from ruin by thousands of small donors, and today thrives under the ownership of the Mount Vernon Ladies’ Association. The separate home where Washington was born was also retrieved from oblivion by a mix of small donors plus John R ­ ockefeller Jr. Likewise, Monticello—Thomas Jefferson’s residence sometimes described as his “greatest creation”—has been WINTER 2016

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Thomas Jefferson’s home, Monticello —sometimes called his greatest creation —has educated visitors for about a century thanks to a private foundation that receives no government funding. Washington’s Mount Vernon, James Madison’s home Montpelier, the summer cottage where Abraham Lincoln made some of his gravest decisions, Greenfield Village, Williamsburg, Mystic Seaport, Old Salem, Sturbridge Village, and many other important historical sites are likewise protected and opened to Americans by

protected and interpreted to visitors for about a century by a private foundation that receives no government funding. Ditto for Montpelier, the nearby home of the father of our Constitution, James Madison.

The summer cottage where Abraham Lincoln spent a quarter of his Presidency and made some of his most momentous decisions, including formulating the ­Emancipation Proclamation, was a neglected part of ­American history until private donors came along to restore it and open it to the public in 2008. Williamsburg, Touro Synagogue, Greenfield Village, Mystic Seaport, Sturbridge Village, Plimoth Plantation, Old Salem—these beloved historic sites and scads of others have been saved for future generations by philanthropy, not taxpayers.

Our great cathedrals are products of private g­ iving.

St. John the Divine, one of the most monumental ­Christian edifices in the world, was begun in New York City with gifts from J. P. Morgan, and raised up over decades via thousands of small donations. Riverside Church, a grand gothic pile just another ten blocks up Broadway, was a gift of John Rockefeller Jr. The National Cathedral in Washington, the second-largest such church in the country after St. John (and probably 26

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the last pure Gothic cathedral that will ever be built), was a flowering of mass philanthropy, built over a period of 97 years as small funds donated by the public pooled up.

Our cathedrals of human learning—libraries—are also an invention of philanthropy. Ben Franklin promulgated the idea that in a democratic nation like America, everyday people should have easy access to books, and that making them available is a worthy calling for the generous. Even the rough-and-ready city of New ­Orleans in 1824 got a Free Library courtesy of Judah Touro, who also helped endow the Redwood Library in Newport.

John Jacob Astor, James Lenox, and Samuel Tilden gave millions between 1849 and 1886 to create what became the New York Public Library. Financier Joshua Bates launched the Boston Public Library, and Enoch Pratt provided brilliant planning as well as money for a magnificent multi-branch library in Baltimore that inspired Andrew Carnegie to create more than 2,500 other libraries in the decades following. Today there are 16,000 public libraries in the U.S. and they are visited a billion and a half times every year.

Many magnificent parks are also fruits of philanthropy. In the mid-1850s, donors started giving lovely

Matt Kozlowski

philanthropy, not the Park Service or other public agencies as is sometimes imagined.

Matt Kozlowski

botanical gardens to the public in various cities. The list of national parks sparked by donors is long and stretches from Maine’s Acadia to the Virgin Islands, from Great Smoky to Grand Teton.

A recent research report declared that thanks to philanthropy we are currently living in the golden age of urban parks. Inspired by the success of the ­Central Park Conservancy, which donors created to bring New York City’s green haven back from the brink of disastrous decay and disorder, conservancies have spread all across the country, creating parks that delight citizens by the millions. Manhattan’s High Line, Discovery Green in Houston, Chicago’s 606 trail, the new $350 million oasis springing up in Tulsa, Dallas’s Klyde Warren Park carved out of thin air over a busy freeway—these are all new gifts. And tired or underdeveloped older recreation areas like Shelby Farms in Memphis, Piedmont Park in Atlanta, Buffalo Bayou in Houston, the Olmsted parks in Louisville, and our National Mall are also being renovated and expanded in much-loved ways thanks to generous givers.

Clever ideas as well as private money have been at the center of miraculous recoveries of several endangered species. The peregrine falcon is the fastest creature on earth when flying, but as a reproducer it had become such a snail that it was flirting with extinction. Government biologists tried to speed its breeding but failed.

Then a grant from the IBM Corporation mixed with small donations from falconry hobbyists allowed birders to experiment with some unconventional ideas (including that city skyscrapers might be among the best places for the height-loving, pigeon-dining creatures to make their comeback). Today, the peregrine is out of danger.

Fresh ideas and donor funds were similarly crucial in the comebacks of the wolf, the bluebird, whooping cranes, wild turkeys, the swift fox, Florida panther, and many threatened waterfowl.

Philanthropy isn’t going to bring dinosaurs back to life.

It has, however, fueled much of the paleontology that has dramatically transformed the field in recent decades. Jack Horner has levered $12 million of donations into radical new understandings that some dinosaurs exhibited mothering behaviors, that millions-of-years-old bones can contain soft-tissue residues that explain biological secrets, and that the T. Rex may have been as much scavenger as predator. And voluntary donations have been vital in making dinosaurs real for their fans, via imaginative new museum exhibits in places like Montana, the Smithsonian, and New York City’s Museum of Natural History.

Saving lives Medical philanthropy has had many splendid triumphs.

After World War II, the entire budget of the National Institutes of Health was less than $10 million, and the

major forces in biomedical research were smart donors.

The John Hartford Foundation was smart indeed, catalyzing many advances in health care during the 1950s, ’60s, and ’70s with its grants in areas like immunology, organ rejection, development of the artificial heart, microneurosurgery, and cancer research.

Hartford was a special savior for the many people suffering from kidney failure. They funded some of the world’s first successful kidney transplants at ­Boston’s Brigham Hospital, and underwrote creation of the important professional societies where kidney specialists exchange information. Hartford made kidney dialysis practical, funding the machines created for the world’s first out-of-hospital dialysis center. For the one out of every 100,000 Americans who experience kidney failure, these gifts lifted a death sentence.

In similar fashion, Uncas Whitaker more or less willed the new field of biomedical engineering into legitimacy by leaving $700 million for that sole purpose when he died in 1975. The trustees of his bequest pushed the money out the door quickly and wisely, at a time when most universities and the government medical-funding agencies opposed a blending of engineering and medical disciplines. The Whitaker efforts created curricula for the new field and funded inaugural research projects. They paid for classrooms, labs, and 13 entire buildings. They gave dozens of colleges the money to hire dual-purpose faculty, fellows, and interns, and otherwise encouraged talented people to take up work at the intersection of technology and medicine. They spawned professional societies, and launched the careers of 1,500 biomedical engineers who founded more than 100 companies and accumulated over 400 patents or property licenses.

The results are dramatic. Biomedical engineering has become the fastest growing specialty in all of engineering. And revolutionary products like lab-grown skin and organs, laser surgery, advanced prosthetics, ­large-scale joint replacement, cochlear implants, and hundreds of other miracles are now commonplace.

Like overlooked medical disciplines, philanthropy has been helpful in bringing new attention to overlooked diseases. Autism was barely understood when philanthropists offered the funds for deeper research and wider public education. Schizophrenia, certain kinds of blindness, and prostate and breast cancer have all receded in the face of donor pressure.

Fully 47 Nobel science-prize winners received significant financial support from Rockefeller before they earned their awards.

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Huntington’s Disease afflicts one out of every 10,000 Americans and there is no cure for the slow, suffocating killer. It gets modest attention from the NIH. Throughout the past decade and a half, though, philanthropist Andrew Shechtel has stimulated expansive new research on the affliction via $732 million in donations.

Philanthropists have also done marvelous things on the social side of medical care. They have, for instance, funded giant advances in palliative care and patient comfort—creating the Fisher Houses, which now unite wounded servicemembers with their families during treatment, and the Ronald McDonald houses which do the same for sick children. Humane hospice care was brought to America by philanthropists starting in 1974.

It isn’t just in the field of medicine that donors have been able to save and improve lives. Literally hundreds of millions of people have avoided starvation thanks to the crucial foundation investments that created the Green Revolution. Today, the Gates Foundation is ­putting money into extending the agricultural progress of the Green Revolution across Africa.

It is estimated that tobacco could kill a billion people globally during the present century. Philanthropists are investing hundreds of millions of dollars in educational efforts to head off many of those deaths.

Dangerous roads that kill thousands of people in developing countries every year are another area where donors have recently started working creatively to save lives.

Disaster zones are one of the most visible realms where the philanthropic impulse does battle against danger and chaos. From the Red Cross and Samaritan’s Purse to World Vision and Doctors Without Borders, there are many vehicles and vessels through which the generous now act to rescue the perishing. There is a long list of philanthropic outpourings in response to earthquakes, for instance: San Francisco in 1906, Italy in 1909, Armenia in 1989, Haiti in 2010, and so on. The largest recent charitable gushes in response to cruel twists of fate were the $2.8 billion donated by Americans after the 9/11 attacks, and the $5.3 billion offered up after Hurricane Katrina.

Philanthropists come in all stripes.

That’s one of the field’s strengths: Different givers pursue different visions, so you get many solutions to problems rather than just one.

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Creative juices In the U.S., philanthropy is the rain that keeps the tree of artistic life in bud. Consider symphony orchestras.

Fully half of their income today comes from donations (33 percent from annual gifts, 16 percent from revenue off of endowments given previously). Only 6 percent of

Noah Zinsmeister

i­nspiration and ideas. Education, religion, giving to culture and the arts are primeval philanthropic imperatives.

Philanthropy is, for instance, the central factor behind the greatness of American universities. Donors like Mary Garrett didn’t just give the money to create l­earning citadels (in her case, the Johns Hopkins medical school), they also demanded business-like procedures and reforms that separated U.S. colleges from their European predecessors. Garrett insisted, in return for her support, that Hopkins raise its academic standards, and accept women into its medical school on an equal footing with men, making it the first place those two things were accomplished.

Today, more than a half-billion dollars of private giving is creating a remarkable new campus on New York City’s Roosevelt Island where cutting-edge engineering and entrepreneurship training will be combined under the aegis of Cornell University. Donors also brought in as a partner Technion, the Israeli university that has proven itself as one of the most effective in the world at spinning off lab discoveries as useful products. Cornell Tech, as the new institution will be called, has great promise of becoming a hub that not only provides superb student training but also generates a flood of economic productivity in the surrounding region, à la MIT or Stanford (two other products of entrepreneurial philanthropy).

Within just the last 20 years, donors have powered what I suspect historians will someday categorize as the most important social invention of our time—the charter school. As this book is published, 3 million children are attending 7,000 charter schools, and both of those numbers are rising rapidly (from zero just a couple decades earlier). Even more remarkably, the top charters have invented starkly original techniques and procedures that allow them to take children with harsh life disadvantages and dreadful conventional schools in their neighborhoods, and lift them into well-above-average academic results.

The 9,000 students at the Uncommon Schools charter network are 98 percent minority and 78 percent low-­income, yet all seniors take the SAT, and their average score is 20 points above the college-readiness benchmark.

At KIPP schools, 95 percent of the 70,000 students are Elevating minds minority and 87 percent are low-income, yet 82 percent go Philanthropy doesn’t just fill bellies and fill pockets. It to college. In New York City, the average charter-school also fills heads with productive knowledge, and souls with student now absorbs five months of extra learning per year in math and one extra month in reading, compared with counterparts in conventional public schools.

Noah Zinsmeister

symphony funds come from local, state, or federal government support. (The rest comes from concert income.)

The story is about the same for other arts. Nonprofit arts institutions as a whole currently get 45 percent of their budgets from donors. Subtract the philanthropy and our lives immediately become duller, flatter, darker, more silent.

Voluntary support for artistic activity in our country sprawls across a delightful range of fields. The little gems are often just as sparkly as the big diamonds. Take the Van Cliburn piano competition. Established in Fort Worth, Texas, in 1962 by local donors anxious to encourage gifted players like their native son Mr. ­Cliburn, it is a kind of Olympiad for amateur piano players. Every four years, the greatest non-professionals in the world descend on Bass Hall and play until their fingers can flutter no more. Spectacular performances are available not only to the live listeners but also to broadcast, Internet, and film audiences.

George Eastman’s pet project, his School of Music and the 3,100-seat hall he built for it, remains one of the treasures of American culture. He created the venue to be much more open and welcoming to audiences than European concert halls, and programmed it from the very beginning not only with classical music but also with other arts like film (which was then considered a vulgar and unserious trifle). Eastman made Martha Graham’s career by ­bringing her in to choreograph avant-garde dances that could be presented between film reels to mass audiences who would never darken the door of a ballet performance.

Now that it is recognized as both a potential art form and a potent shaper of popular culture and opinion, film has become a field of interest to other savvy philanthropists.

The individual most committed at present is the former co-founder of eBay, Jeff Skoll, who has poured hundreds of millions of his dollars into an operation that makes popular movies with a message. He also funds a “social-action campaign” for each release, which encourages people to alter their thinking and behavior based on what they have seen. Skoll has convinced big names like Matt Damon, Julia R ­ oberts, and George Clooney to take roles in his ­filmanthropy, which has hit some popular and creative nerves. A charmed Hollywood establishment has given more than 30 Oscar nominations to his pictures—which include works like The Help, Syriana, Lincoln, Charlie Wilson’s War, Waiting for Superman, and An Inconvenient Truth (which brought­ Al Gore his Nobel Peace Prize).

Creative work undertaken under the banner of art and culture can also yield practical progress in unexpected ways. In the days before mass media, two donors—library and art patron Ada Moore, and the Carnegie C ­ orporation—gave money to the American Foundation for the Blind to fund a crash program to bring books to the sightless in some practical audio form. The foundation decided to see if a brand-new

The Cathedral of St. John the Divine in New York City, one of the largest and most remarkable churches in the world, was begun with gifts from J. P. Morgan, and then built up over generations by donations from thousands of smaller givers.

patent for what was being called the “­long-­p laying record,” or LP, might work.

LPs were much larger and slower-spinning than the 78-rpm records that were then popular, and thus allowed four times as much material on each side, making them practical for extended readings from books. The AFB experimented with making discs out of various materials, seeking one durable enough to stand up to shipping from house to house among blind subscribers. They eventually settled on vinyl. The foundation also had to build the first players for the records.

This philanthropic product-development effort succeeded, and “Talking Books” began to be shipped around the country, leaving blind Americans wide-eyed with wonder at the joys of literature. For the first 14 years of its existence, the LP record funded by Moore and ­Carnegie was enjoyed exclusively by the blind. Only later did CBS turn it into a medium for the general public to play music. A charitable creation thus became a big part of American pop culture.

Philanthropy is the rain that keeps the tree of artistic life in bud.

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Part III “How Philanthropy Fuels American Success”

by Karl Zinsmeister

P

hilanthropy is not interchangeable with government spending. It typically takes quite different approaches to solving problems.

John Updike once wrote an essay about how government administrators view change—noting that their every incentive is for continuation of the status quo. Change disrupts bureaucracies and creates work for those who man them. People working in government thus tend to shun departures from prevailing procedure, and to seek more of the same, not innovation. Updike writes poetically that “the state, like a young child, wishes that each day be just like the last.” Whereas an inventive private actor “like a youth, hopes that each day will bring something new.”

This pierces to the heart of why government ­problem-solving is generally so sluggish and uninspired.

Of course philanthropy can also become bureaucratic and timid—as can any human activity under certain conditions. But there are fundamental structures and incentives to private giving that, in the main, make it much more imaginative, flexible, and interested in transformation, as well as more individualized, more pluralistic, more efficient. One at a time, let’s look at some of the distinctive qualities of private giving that set it apart from public spending.

Philanthropy is inventive Both in its approach to problems and in the forms through which it operates, American philanthropy has shown itself to be highly experimental and creative.

For instance, the institution of the charitable foundation itself—which allowed donors to codify their giving and extend it to future generations—is an invention of American philanthropy. The first foundations emerged in the U.S. around the turn of the twentieth century. By 1915 there were 27 in operation; in 1930 the total was over 200. The British began to copy the foundation structure in 1936; it was 1969 before the French and Japanese got some of their first examples. Today the foundation (and U.S.-style philanthropy in general) is just beginning to be understood and copied in places like China, the Middle East, Russia, and India.

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Heaps of examples illustrate the inventiveness of private philanthropy in substance as well as form. Take just the past decade of grantmaking in a single field: education. Five donors recently set up a fascinating effort to trim the soaring costs of college by producing top-quality, low-cost textbooks for the country’s 25 most-attended college courses. They will use the opensource method commonly applied to producing great software, along with an expert-review process. And the resulting books will be free to students. Given that college students spent an average of $1,200 on texts in the 2013 school year, this effort is expected to save collegians $750 million in its first years. The donors are now expanding it to the high-school level.

In the same year that this clever venture was launched, other donors paid to bring a new testing yardstick to schools so they can measure their performance against peers in other countries. Yet others provided the means to set up MOOCs—massive open online courses—from top colleges that can be taken for free by anyone, thanks to philanthropic s­ ponsorship.

Simultaneously, philanthropists concerned about the low quality of many of the colleges that train schoolteachers created a new guide, in collaboration with rating expert U.S. News and World Report, that scores every one of the nation’s 1,668 teacher colleges for effectiveness.

There were creative educational thrusts by other givers at about the same time. One donor paid for a major experiment in Chicago that is testing whether at-risk preschoolers get a bigger academic boost from long-term training for parents, or from special financial incentives for teachers who produce results in a year, or from small weekly payments that reward specific achievements by parents, teachers, or children. Other givers paid for Khan Academy to offer “a free, world-class education for anyone, anywhere” via thousands of free online seminars. A contemporaneous donor-driven innovation was a practical new system that allows school districts to measure how far students progress from their starting point during a school year, and then to reward the teacher accordingly.

Neil Brandvold / USAID

FIXING PROBLEMS VIA PHILANTHROPY VS. GOVERNMENT

Neil Brandvold / USAID

Meanwhile, several radically different and effective new ways of drawing fresh talent into teaching were created with charitable funds. Philanthropy invented a superb math and science initiative that spread rapidly to 560 schools in its first seven years. (It causes the number of students earning passing scores on math and science Advanced Placement exams to jump 85 percent in the first year, on average, and to nearly triple within three years.) And it was thanks to generous givers that less than a decade after Hurricane Katrina wiped out every one of its miserable public schools, New Orleans had an entirely new 100-percent-charter school system in place that allowed the city’s students to mostly catch up with the performance of students in the rest of the state, for the first time in Louisiana history.

And so on. We could walk through similar bursts of philanthropic invention in medicine, economic development, overseas aid, and other areas. You’ll find examples of all of these in the Major Philanthropic Achievement lists at the heart of The Almanac of American Philanthropy.

Philanthropy is nimble Private giving is light-years quicker than government action, and it tends to adapt effectively to changing conditions on the ground. A simple example is donor John Montgomery’s provision of lifesaving radio gear in central Africa. Residents had been terrorized for years by warlord Joseph Kony and his mercenary army that routinely popped out of the jungle to kill, steal, and kidnap children from remote villages. Montgomery suggested that if a radio network were created so information on Kony’s movements could be quickly shared, imperiled villagers could be warned in time to flee. In very short order he had tribal chiefs equipped with the necessary transmitters and receivers, and many families were spared.

Another illustration of the responsiveness of philanthropy came during the 2014 Ebola scare. As the disease swept into new nations, neither the international nor American health bureaucracies showed much capacity to adjust or speed up their distribution of resources. Enter philanthropist Paul Allen with an almost instant $100 million check, rapidly matched by $50 million from the Gates Foundation, $25 million from Mark Zuckerberg, and other gifts. By immediately establishing protocols for aid workers who get infected, providing financial support for their evacuations and insurance-coverage gaps, and paying for the dispatch of 500 emergency respondents and their equipment to west Africa, Allen’s quick gift was credited by experts with stanching the bleeding (literally). The comparative speed of charities is often visible in disaster relief—where organizations like Samaritan’s Purse and Team Rubicon are routinely able

While governments floundered, donors like Paul Allen, Bill Gates, and Mark Zuckerberg acted with lightning speed to block an Ebola epidemic when it slashed across West Africa in 2014, killing 5,000 people in horrible ways. Their infusion of close to $200 million in instant aid allowed special medical assistance and equipment (like this digital thermometer that avoids potentially contaminating physical contact) to be rushed into places where the virus was raging.

to put supplies and help-teams on the ground days faster than public authorities.

Interestingly, the nimbleness and speed of philanthropy coexist with a proven ability to be patient and take an extraordinarily long-term approach when that is appropriate. “Unlike business and the state, foundations can ‘go long,’” writes Stanford professor Rob Reich. He cites the multigeneration creation of public libraries, the decades-long Green Revolution, the painstaking creation of our national 911 emergency call system by philanthropists, and other examples.

Philanthropy is individualized Howard Husock once wrote in Forbes that “the more individualized attention a problem calls for, the less

Many of the most important interventions to reduce poverty have nothing to do with alms. They are gifts that increase the prosperity of everyday life—benefiting individuals at all points of the economic spectrum.

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turkeys, the swift fox, snowy egrets, trumpeter swans, and others.

­ ell-suited government is to dealing with it—and the w more likely that independent, charitably supported groups can help.” This is indubitably true.

Many of the most successful mechanisms in the charitable world—like microlending circles, ­Alcoholics Anonymous, the successful mentoring programs for prisoners, college-dropout preventers like the Posse Foundation, and good job-training programs for welfare moms and the homeless—rely heavily on oneto-one human linkages and accountability. They take advantage of all the useful information that becomes available when you actually know someone, instead of dealing with a stranger. And they use the power of relationships to help people change behavior.

I once did a study of the informal lending circles that many immigrants use to build economic success after they come to the U.S. Typically, a group of six to ten individuals who are related or know each other will band together, and each month every participant will put a few hundred dollars into the circle. When your turn comes up you get to collect that month’s kitty—which recipients typically use for things like

The goal of charity in our country has always been individual competence and independence, not just social quiet.

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PHILANTHROPY

Matthew Petroff

wolf, the whooping crane, peregrine falcons, bluebirds, Florida panthers, wild

Dehaan; istockphoto.com; Nick Jewell

Donors, volunteers, and private nonprofits have played absolutely crucial roles (often after government agencies failed) in reviving endangered species like the

starting a business, or m ­ aking a downpayment on a car or house, or buying some equipment or education that can be used to make a living. These circles almost never have contracts or receipts or any legally binding structure. So what prevents someone from walking off with the pot, then refusing to kick in his share of contributions in the future? Relationships!

There is the pressure of not letting down your relatives or friends or neighbors whom you will see in the future. There is also the confidence that comes from entering the circle with valuable knowledge of the character of the other people in it, making it less likely you will be taken advantage of yourself. These are not anonymous strangers in a transfer program, they are people whose strengths and weaknesses are known to each other. These are personal, not impersonal, transactions.

“I never think about crowds. I think about individuals,” Mother Teresa used to say. The administrator of a government helping program, on the other hand, has to focus wholly on the crowd. Government programs can’t have different approaches and different rules for different kinds of people; they are all about equal opportunity, about being strictly the same for all participants in all places at all times. Cramped minds sometimes romanticize this “consistency” of government programs, and contrast it favorably to the “patchwork” variations of charitable aid. But consistency is not really how humans work.

If you have one child who needs a very structured environment, and another who blooms when left to navigate on her own, and a third who doesn’t do any kind of book learning well but has vibrant creative skills, you don’t want “consistent” schools; you don’t want one size fits all. You want individualized services that recognize and work with intimate differences of personality. You’ll have a hard time finding that in government-run programs, but it’s a hallmark of philanthropic efforts.

Great philanthropists know all of this. That’s why many donors prefer to work in their own backyards, where they know the characters of many recipients.

When allying themselves with social entrepreneurs, donors tend to seek out neighborhood operators who have intimate acquaintance with the problem at hand and the persons suffering through it. Donors sift through competing petitions for help and choose those where they have some direct knowledge, and confidence the transactions will be personal enough to keep people accountable and tuned in to real needs.

The great giver Julius Rosenwald once described the aim of philanthropy as “healing the sore spots of civilization.” This is easier to achieve by working in personal rather than impersonal ways. Consider the story of a young woman named Liz Murray who grew up as the neglected daughter of two drug addicts.

Matthew Petroff

Dehaan; istockphoto.com; Nick Jewell

In her teenage years Murray began reaching out to potential allies for help in saving herself. On one particular day she had two back-to-back human interactions that were climactic in her life. The first was in a New York City welfare office where she attempted to qualify for aid for the first time so she could have an apartment instead of living on the street as she had been for two years. The transaction was all about forms and rules. It was impersonal. And it ended in yelling, her being mocked by the government caseworker, and a refusal of aid—which was disastrous given her precarious circumstance.

Murray’s next interview that very same day was at the New York Times headquarters, where she sat down with the committee in charge of awarding the charitable college scholarships handed out every year by the New York Times Company Foundation. This transaction was highly personal. She told them how her mother sold their donated ­Thanksgiving turkey for drugs; how she had slept in stairwells since her mother died of AIDS; about not eating, and living off a food pantry; and about what kept her spirits intact throughout these trials. She was soon awarded one of the foundation’s six scholarships (with which she eventually graduated from Harvard). And when a very personal story about her life was published by the Times, donations poured in which not only allowed Murray to occupy an apartment and start eating regularly, but also provided the means for the foundation to award 15 more college scholarships than expected.

Murray herself makes clear how important personal factors are in any helping interaction. “During my more vulnerable moments, I was always seeing myself through the eyes of others.” If they looked at her as a failure, “then I was one.” And if they looked at her as “someone capable, then I was capable. When teachers like Ms. Nedgrin saw me as a victim—despite her good intentions—that’s what I believed about myself too. Now I had teachers who held me to a higher standard, and that helped me rise to the occasion. The deeply personal relationships in this intimate school setting made me believe.” With the help of just a few well-placed helping hands, ­Murray eventually wrenched herself out of a death-spiral. It could not have been done without human closeness.

Philanthropy frequently seeks to transform, not just treat Philanthropists are often driven by a deeper, wider, more comprehensive ambition than just giving aid. Instead of merely compensating for ills, philanthropy often tries to correct them. It works preemptively to stop the flow of hot lava, rather than simply putting out the fires it creates.

An early advocate for this aspect of American philanthropy was Ben Franklin. His own extensive giving aimed not so much to relieve men in their misfortune as to reform them into a healthier state. “The best way

The Peabody Library in Baltimore. Public libraries are wholly a creation of American philanthropy. Men like Ben Franklin, George Peabody, Peter Cooper, Enoch Pratt, John Jacob Astor, James Lenox, Samuel Tilden, Henry Huntington, and Andrew Carnegie invented the concept of giving all people free access to books, and funded thousands of magnificent examples. In so doing, they placed the foundation of a literate and informed citizenry beneath our democracy.

of doing good to the poor is not making them easy in poverty, but leading or driving them out of it,” he wrote.

Improving the world that strugglers live in was ­Franklin’s notion of the best way to do good for fellow men.

Libraries, schools, occupational training, and all forms of education, self-improvement, and character-building were his favorite causes.

This connects to the previous point about philanthropy being individualized and intimate. If improving private behavior and building self-governance is what you are trying to do, a personal approach is essential. And in our country, the goal of charity has always been individual competence and independence, not just social quiet.

As a Polish journalist who traveled across the U.S. in 1876 observed to newspaper readers back in Europe, the charitable impulses of Americans are very specific. “A man who is old and infirm, a woman, or a child receive more assistance in the United States than anywhere else,” he noted. But “a healthy young man will almost invariably hear one piece of advice: ‘Help yourself !’ And if he does not know how to follow this advice, he may even die of starvation.”

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Habitat for Humanity is a perfect example of the profoundly decentralized grassroots structure that often makes American philanthropy so effective. There are more than 1,400 separate chapters of Habitat in the U.S. , and every one is in charge of its own fundraising, its own governance, its own selection of local families and building sites and volunteers —yielding extraordinary responsiveness and efficiency. A Christian organization, Habitat asks all of its chapters to tithe on

the money they raise, using those funds to build houses in poor countries overseas.

Also following Biblical economics, the new owners of Habitat homes pay no interest on their mortgages, and their residences are dedicated with a prayer and presentation of a Bible when the keys are handed over.

Strong citizens and strong communities make most palliative aid unnecessary. In law enforcement it is a truism that heading off bad behavior is much preferable to cleaning up after a crime. American philanthropists often take a similar approach to social reform—better to help people build sturdy habits than to rescue them after they fall.

In a free society, one doesn’t really want government, with its coercive powers, to get into the business of personal transformation. There’s too much risk of Big Brother authoritarianism in that. But donors can do this work well on a voluntary basis. They offer carrots that encourage individual reform, while at the same time assisting recovery from prior mistakes. This has great value to society.

In 2015 The Philanthropy Roundtable published a book called Clearing Obstacles to Work that catalogues the secrets of hundreds of successful charities that help homeless people, released prisoners, welfare moms, and other at-risk populations succeed economically and stand on their own two feet. These effective charities don’t just give out jobs and apartments and checks.

Without exception, they require their clients to rise to the occasion—they expect them to learn and cooperate and expend effort. In short they treat them as equal 34

PHILANTHROPY

Philanthropy is pluralistic Polyarchy. That’s a great $50 word for any American to know. It refers to a society in which there are many independent sources of power. Contrast it to monarchy.

The United States has a notably polyarchic culture, and independent grassroots philanthropic giving is a big aspect of this.

The polyarchy fed by philanthropy increases variety in our lives and protects non-mainstream points of view.

There is only one federal government, and it necessarily applies a uniform approach to all who approach the throne. At the state level we have 50 power centers but only one applies to each of our own lives. If you count every single school board and village administration and water district in the U.S. there are about 100,000 government entities all told, but again only one holds sway where we live, and we usually have no alternative to what it presents us.

Meanwhile, there are about two million independent organizations in our civil society, and hundreds of millions of separate adult donors. These overlap and compete; none have an exclusive franchise; we can pick and choose, mix and match. And as alternate sources of resources and organizing power, these voluntary elements are antidotes to any uniform authority that could become oppressive, or just ineffective. (“The legislator is obliged to give a character of uniformity…which does not always suit the diversity of customs and district,” observed Tocqueville.)

Yale law professor Stephen Carter points out that “the individual who gives to charity might measure the needs of the community by different calipers than centralized policy makers, and will therefore contribute to a different set of causes. These millions of individual decisions lead to a diversity in spending that would be impossible if we adopted the theory that the only money spent for the public good is the money spent by the state.” Philanthropy “also helps resolve an information problem: Government officials, no matter how well-­ intentioned, cannot know all the places where donations are needed, or the form that will be most useful.” Philanthropy is thus “democracy in action.”

Give away houses built by bleeding-heart church volunteers! Ask small business owners to have coffee with a prisoner every month, and college kids to spend a day with his children! Adapt Mormon welfare programs to other hungry and homeless people!

Recruit school teachers from the Ivy League! It is much easier for private givers to invent and experiment in these sorts of ways. They can try liberationist

Green Mountain Habitat for Humanity

­ artners and ask them to contribute, rather than patronp izing them with undemanding alms.

Green Mountain Habitat for Humanity

models, authority-based models, religious approaches, mentoring influences, and other strategies that would be off-limits to public agencies.

Philanthropic solutions, right-leaning professor Les Lenkowsky has pointed out, are “especially important for people with ideas that may be unpopular, innovative, or directed at a minority of the population….

Philanthropy, in short, is an expression of pluralism.”

Left-leaning professor Rob Reich makes the very same point. Because they “decentralize production of public goods and curtail government orthodoxy,” he writes, philanthropists provide “pluralism of public goods.”

In addition to reinforcing freedom and innovation, this aspect of private giving has many practical advantages. What works to reverse homelessness or alcoholism or loneliness in old age may be quite different in Nebraska than in Newark (or Namibia). Yet in public programs it’s hard to allow different rules and pursue varying strategies. In philanthropy that’s easy—it’s one of the field’s inherent strengths.

One of the distinctive (and for many of us encouraging) aspects of contemporary life is the rapid “niche-ification” of choices. Not long ago we had three national news networks, and three national car makers, and three national entertainment channels. Many neighborhoods had one hospital choice, one public school, one department store, and one dominant employer. Today we have many more options, allowing us to select from quite different priorities, and values, and tastes. Philanthropy has always enjoyed this rich variety.

Another subtle way that philanthropy protects diversity and options is by giving the social visions of different time periods their chance to chip away at problems, allowing points of view that are out of fashion, or just forgotten, to retain a foothold. “The great thing about the legal protection of charitable trusts over time is that we don’t all have a bunch of institutions in 2013 that are wholly determined by what trustees happen to think in 2013. That would lead to an appalling homogenization of our cultural, social, and educational landscape.

Instead, people set up different projects in 1880, or 1938, or 1972, and those visions, sometimes gloriously out of step with how we currently think…continue to thrive.”

So wrote a trustee of a college in the rural West whose founder stipulated a hundred years ago that it had to be one of the most academically selective in the country, yet require its students to put half of their time into ranch work, that it had to be all male, and never bigger than a few dozen students per class. We wouldn’t want every American college to have that signature, but how wonderful that there is one that does. Thanks to its donor’s rules, Deep Springs College offers a rare and fitting education for a special type of student, while

producing results and insights that the rest of the educational establishment can learn from.

Philanthropy is efficient A few years ago, academics collected 71 different studies comparing the efficiency of offerings when the same basic service was available from both public agencies and private organizations. They found that in 56 out of the 71 cases, the philanthropic provider was more cost-effective. In ten cases there was no clear difference, and in only five cases was the public provider more efficient.

The public senses and understands this reality, which is one root of its deep affection for charitable operations.

Americans know most philanthropic efforts get a lot of bang for the buck. That’s why they voluntarily handed $360 billion to charities in 2014.

Asked in 2011, “Which do you think is more ­c ost-­e ffective in promoting social good—private charities or the government?,” 73 percent of adults nationwide said charities were the most cost-effective, while 17 percent selected government agencies. (Perhaps you’ve heard the old definition of social science: “elaborate demonstrations of the obvious, by methods that are obscure.”) Asked in 2010 whether they most trust government, business, or nonprofits to solve “the most pressing issues of our time,” 71 percent of Americans picked nonprofits.

To gather more evidence on public attitudes toward philanthropy, The Philanthropy Roundtable commissioned its own national poll in 2015. The results revealed deep public confidence in both the effectiveness and the efficiency of private giving. The results are laid out in the next section.

“Ideas that may be unpopular, innovative, or directed at a minority of the population are especially dependent on philanthropy’s pluralism.”

—right-leaning professor Les Lenkowsky

“Because they decentralize production of public goods and curtail government orthodoxy, philanthropists bolster pluralism in public life.”

—left-leaning professor Rob Reich

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Selections f rom an original new poll

SELECTIONS FROM AN OR In 2015, The Philanthropy Roundtable surveyed 1,000 American likely voters age 18 or older on their views of philanthropy. Public Opinion Research used random selection, oversamples, and a dynamic weighting program to ensure that the respondents were nationally representative.

Full results are presented in The Almanac of American Philanthropy.

When it comes to addressing the most pressing issues of our day, which social sector do you trust most—entrepreneurial companies, nonprofit charities, or government agencies?

Would your first choice for solving a social problem in America be to use government or to use philanthropic aid?

47%

43%

32%

28% 21% 14%

use government

use philanthropic aid

not sure

entrepreneurial companies

Americans are distinctive in our attitudes toward fixing social problems. Our strong preference is to pull the lever of private aid wherever possible, instead of relying on government.

This is partly just a response to what we see around us: In crucial areas like medical care, disaster relief, college education, family life, addiction treatment, sharing the arts, expanding home ownership, and so forth, the most effective actors are often charitable and voluntary groups, not state agencies.

Predictably, the biggest split on this question is by political viewpoint. Overall, men and women alike prefer private aid as their first choice, as do people of all ages and religions. But while Republicans and Independents prefer philanthropy over government by more than 2:1, Democrats run against the trend by picking government over philanthropy by 51% to 31%.

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nonprofit charities

government agencies

14%

not sure

Charities enjoy an extraordinary public trust. People have more confidence in their ability to deliver on tough assignments than competing organizations.

It’s intriguing to see that there is almost no partisan or ideological split on this question—Republicans and Democrats, conservatives and liberals, give nonprofit charities almost the same vote of endorsement. It’s between the other two entities where there is a huge political gulf. The preferences among Republicans: 42% for entrepreneurial companies, 43% for nonprofit charities, 4% for government agencies. Among Democrats: 13% for entrepreneurial companies, 46% for nonprofit charities, 28% for government agencies.

PHILANTHROPY

AN ORIGINAL NEW POLL Between two general categories of giving— big gifts by megadonors, or small gifts from millions of everyday citizens—which is more important to America?

Does the government need to place stricter controls on how charities, donors, and foundations operate OR does the government need to allow charities, donors, and foundations wide opportunities to find new and better ways of solving social problems?

73% 61%

28%

15%

13%

big gifts by megadonors

small gifts from millions of everyday citizens

11%

government government needs to needs to allow charities, place stricter controls on donors, and foundations charities, wide donors, and foundations opportunities

not sure

Our national sample believes that even more than the big checks from moguls it is the flurries of $20 and $100 bills that make U.S. giving distinctive and powerful. Only among the young and high-school dropouts are there noticeably more votes for the big gifts—and even within those two groups it is fewer than one out of every five persons who name megadonors as more important.

not sure

Voters aren’t wanting more regulation of charity. Not even self-described liberals (40% “control ‘em” vs. 43% “leave ‘em alone”) or Democrats (40% to 48%) tip in favor of more ­policing and direction.

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Should tax deductions for charitable contributions be eliminated or capped because they cost the government tax revenue OR should tax deductions for charitable contributions be protected because they encourage people to help others in voluntary and selfless ways?

Is it fair that the tax deduction for charitable contributions could result in one family paying less tax than another family with the same income, just because the first family gave more to charity?

79% 66%

21%

16%

13% 5%

tax deductions for giving should be eliminated or capped

tax deductions for giving should be protected

that seems fair

not sure

Americans consider it entirely reasonable and indeed desirable that when someone gives money to charity rather than consuming it or saving it for himself, he should be allowed to deduct that from his income. This is overwhelmingly supported by every demographic slice in our polling sample.

Our examination of historical polling further shows that this sentiment has been firmly lodged in the national bosom for decades, at about the same high level as captured in our survey question above.

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that does not seem fair

not sure

More evidence that Americans have no objection to tax deductions for charity, even when it results in unequal payments to the government. Support for the charitable deduction has actually strengthened a bit compared to 2003, when a similar question was asked in a national poll.

PHILANTHROPY

Thinking about your own personal giving, which charitable cause do you give most to?

34%

religious medical

14%

children & families

71%

11%

educational

8%

anti-poverty

8%

nature & animals

8%

wounded warriors

7%

overseas aid

1%

political

1%

don't give to charity

When you make a charitable contribution, are you more likely to give to local causes, national causes, or international causes?

18%

4%

8% local

In descending order, you can see here how people prioritize charitable causes when it comes time to share their own dollars. Religious charities are, and always have been, the ones Americans are most willing to contribute to. In addition to serving spiritual needs, of course, religious charities are often leaders in other fields listed above. Many of the best medical and overseas charities, for instance, are religious. The Salvation Army and Habitat for Humanity are top anti-poverty charities; Catholic schools bring donor dollars to more poor children than any other educational charity. Much of today’s aid for the homeless is a product of churches. And so forth.

national

international

6%

not sure

U.S. givers send lots of money overseas, but their first impulses are to think locally and act locally. This is true of all of the country’s demographic groups—though compared to others, evangelical Christians and younger people are more likely to give internationally, and liberals are significantly more likely to give at the national level.

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Part IV “How Philanthropy Fuels American Success”

by Karl Zinsmeister

COMMON CRITICISMS OF PHILANTHROPY

I

t’s very easy to underestimate philanthropy. After all, it is carried out in radically decentralized ways, and most of us rarely see anything other than small fragments in operation. Most philanthropy takes place on a local level.

It is often private, anonymous, or simply happening out of the public eye.

Even most donors and nonprofits grossly underestimate the problem-solving power of charitable action, and how crucial it is to our national flourishing. So not surprisingly, there are plenty of out-and-out critics who discount or even mock the idea that major concerns can be addressed via private responses. Philanthropy can be cute, but if you’re serious, they suggest, get big and governmental or go home.

You’ve all heard the complaints: Philanthropy is a drop in the bucket! Philanthropy is amateurish! Philanthropy is chaotic and uncoordinated! Its programs are a crazy patchwork! Some donors are mean, or vain, or in it for all the wrong reasons!

Let’s look at a few of those claims.

It’s a drop in the bucket!

The next time you hear the gibe above, recall the numbers at the very beginning of this essay: The U.S. nonprofit sector now totals 11 percent of our w ­ orkforce and 6 percent of GDP, making it much bigger than the “military-industrial complex” and many other important sectors of our society. Let me add one more number: Nonprofits currently control total assets of about $3.5 trillion. That’s trillion with a “t.”

And here’s a little perspective: The Gates Foundation alone (which is just a tiny sliver of our entire philanthropic apparatus) now distributes more overseas assistance than the entire Italian government. It is estimated that in just its first two decades, the Gates Foundation’s overseas vaccine and medical program (only one element of its total giving) will directly and immediately save the lives of 8 million preschool children. Is that a drop in the bucket?

Then absorb this: Members of U.S. churches and synagogues (who are, in turn, just one part of America’s philanthropic army) send four and a half times as much money overseas to needy people every year as the Gates

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PHILANTHROPY

Foundation does! Indeed, private U.S. philanthropic aid of all sorts sent overseas now substantially exceeds the official foreign aid of the U.S. government. As of 2011, the annual totals were $39 billion of philanthropy vs. $31 billion from government. (And on top of that, individual Americans, mostly immigrants, sent an additional $100 billion abroad to support relatives and friends in foreign lands.)

When Tocqueville made his classic visits across America he wrote, “In the United States I am even more struck by the innumerable multitude of little undertakings than by the extraordinary size of some of their enterprises…. One is therefore in daily astonishment at the immense works carried through without difficulty by a nation which, one may say, has no rich men.” The power of innumerable little undertakings is even clearer today—when wealth and power are spread all across our sprawling continental nation.

Getting seduced by giantism is easy, but it’s an egregious mistake. Just because something is big and shiny and official doesn’t mean it is effective. And just because certain actions are small doesn’t mean they can’t accumulate into mighty rivers of joined effort. When private citizens in every community take care of little things, nearby things, civic needs in their own towns, the net result will often be mightier than any bureaucratic mobilization.

The best metaphors for the achievements of philanthropy are not marching armies, or triumphant grand-slam home runs. Think instead of the gradual changes wrought by nature. “For many years a tree might wage a slow and silent warfare against an encumbering wall, without ­making any visible progress,” writes Lloyd Douglas in his novel The Robe. Then one day the wall topples over.

Philanthropy works inch by inch, drop by drop. It is inexorable, omnipresent, and adds up forcefully.

It’s amateurish!

It’s easy to caricature grassroots solutions. You’ve probably seen the wise-guy bumper stickers saying things like “It’ll be a great day when social issues get strong public funding and the Pentagon has to hold bake sales to buy bombers.” Well, I’m here to tell you that bake sales, and other such grassroots efforts, can do great things.

were quickly overtaken by the more scattered power of lots of little computers in independent use. This illustrates a kind of iron rule that can be seen throughout human life and in nature: Problems are generally solved more easily and effectively when many actors are allowed to take a crack at them from multiple directions, using their own ideas and own resources. Self-organization, crowdsourcing, and decentralized problem-solving are powerful. This is an intrinsic advantage of private philanthropy.

Rules vary all over the place. It lacks uniformity. There are holes. People go off in many different directions. No one’s in control! Some observers are really bothered by a lack of standardizing forces that get everyone marching in the same direction (as government programs do).

There’s one problem with that rather authoritarian critique: Non-coordination of work can just as easily be considered an advantage as a problem. Recent decades have taught us that in economics, technology, social practice, and community life, decentralized multiplicity can be a saving grace.

I worked for three years in the West Wing, ­overseeing domestic policy for the President. One of the deepest impressions that work made on me was how heavy the tread of the federal government is. We’d take up a problem and I’d realize, “whatever we do, however well-considered our reforms, we are going to discombobulate millions of people.” Since the entire federal apparatus swings in one direction with any rule change, it is very hard to test competing policies, to turn faucets on slowly, or to allow differing solutions in different places.

Almost every new federal policy turns over the apple carts of many completely innocent parties, and disrupts 42

PHILANTHROPY

Erik Pitti; Sebastiaan ter Burg

The first computers —large mainframes controlled from a central processor —

the settled expectations of large numbers of families and communities. I left the White House hungry for less monolithic, less uniform, more decentralized ways of attacking problems.

Humans are not predictable robots, so the healthiest forms of society-building often proceed in an empirical way: test, experiment, undertake lots of trials, recognizing that many—perhaps most—will fail. But so long as our whole society isn’t swerving in unison in one direction, the errors will generally cancel each other out, the failures will be exposed, and the successful ventures will become visible and then be copied.

This is an argument for dispersal of resources. For divided attacks. For independent assessment. Exactly the things that private philanthropy provides.

Yes, you will be told that breaking the responsibility for social problem-solving into hundreds of pieces and then handing these off to thousands of charities and foundations and private doers of good is medieval, and will never be effective in our modern world. Critics will portray it as mere dabbling in the face of giant pressures. Such criticism, however, seriously misunderstands the power of the human anthill, at least under American organization.

A wonderful new word was coined in 2005 to describe a reliance on dispersed authority to fix things: ­crowdsourcing. The effectiveness of chewing through big issues via lots of small bites by dispersed participants is a fundamental reality understood by wise humans for millennia. But it has been brought into high relief by aspects of the computer revolution.

In the early years of computing (not very long ago), the largest supercomputers were extraordinarily complex centralized devices, where all the wires led to one extremely expensive custom-made processing chip.

Today, there is no king processor in a supercomputer.

The latest versions are made with around 40,000 plebeian, everyday chips just like the one in your Dell, all working in democratic parallel. And this so-called “distributed intelligence” has turned out to be vastly more potent than the elegant genius of the old centralized Cray supercomputers that worked from the top down.

Forms of distributed computing are being applied to many of today’s most difficult problems. For instance, the vast amounts of astronomical data that need to be sifted through in order to discover a possible planet transiting a distant sun, or a possible radio signal from another civilization, are being processed by hundreds of thousands of volunteers on their home computers.

Or take the Linux computer operating system—the computer code that has become the backbone of the digital business world. There is no master control over what goes into Linux. Software drafts are passed around over the Internet, where thousands of informal contributors add and subtract and tinker with the code, and then put the result out there in the marketplace. If that sounds like chaos, you

Erik Pitti; Sebastiaan ter Burg

haven’t been paying attention. This so-called open-source method of creating software solutions has turned out to be remarkably orderly, and powerful, and the result is that Linux quickly turned into the most flexible and effective computer operating system available.

The pattern of complex problems being solved by small actors working locally and independently without heavy central direction is not just the story of the Internet, it is a phenomenon common to much of technology, biology, and human history.

Some years ago, I read a book called Ants at Work, written by a Stanford entomologist who spent 17 years studying a large colony of harvester ants. (And you thought your professional specialty was narrow.) The author’s goal was to learn how these tens of thousands of tiny creatures coordinate the specialized tasks essential to colony health—food harvest and storage, care of offspring, tunnel digging, garbage toting, war fighting, etc. Who’s directing the show to make sure the right work gets done at the right time?

The answer, she discovered, is that nobody is in charge.

No insect issues commands to another. The colony operates without any central or hierarchical control. These complex societies are instead built, she reports, on thousands of simple decisions made by individual creatures based on what they see around them, with those many m ­ icrodecisions melding together to yield an efficient macro-result. I suggest the right term for this is self-organization, and it’s something of an iron rule throughout the natural world, not only among bugs, but also at the very top of nature’s pyramid—in human society.

As a simple example of the general superiority of decentralized problem solving, consider what happens every fall weekend in football stadiums. Even a boozy crowd can drain itself from a packed oval in a matter of minutes. Yet emptying that stadium by commanding each person from some master perch, as readers with some background in mathematics or statistics will know, is an almost insoluble problem. You could cover the field from goalpost to goalpost with computers and programmers, and you’d end up frustrated. There are just too many variables: 80,000 people, 35 exits, scores of stairways, thousands of stairs, pillars that block certain routes, backups in specific aisles—it’s just too much to orchestrate.

Yet leave each Joe to himself and he’ll be opening the door to his Chevy before the scoreboard lights are cool. He may not realize that he’s exhibiting what scientists call “large-scale adaptive intelligence in the absence of central direction.” But he is. Less trivial examples abound: Vast and absolutely crucial human tasks like food distribution, for instance, are managed in the U.S. without any central organization. This is not just acceptable, it is an advantage, increasing variety and innovation and customization to meet specific circumstances.

Thanks to technology making the mechanics easier, crowd-based problem-solving is on a sharp upswing

Scientists have found that ants —and most other social creatures —

orchestrate all of the specialized tasks essential to their community’s health without any central direction. Each creature makes decisions based on what it sees in its immediate vicinity, and these many micro-decisions meld together into an efficient macro-result.

today, including in philanthropy. Did you know that way back in 2012, Kickstarter roared past the National Endowment for the Arts in providing money for arts and culture projects? Charities like DonorsChoose.org offer remarkable opportunities for Americans to fund grassroots educational help. The fascinating philanthropy SpiritofAmerica.net collects ideas from U.S. Special Forces operators in poor, dangerous countries on ways to enhance stability and reduce the temptation to violence and radicalism by making small improvements in community life. Donors view choices online and sign up to send sewing machines to Iraqi women, or educational supplies to a school destroyed by terrorists in the Philippines, or handheld spotlights for police working the Pakistan/Afghanistan border. Even the ­S mithsonian launched a crowdfunding campaign in 2015, seeking $500,000 to restore the space suit worn

by Neil Armstrong on the moon. The effort quickly exceeded $720,000, given by 9,500 people.

Dispersed authority and funding may be new to military work, or to the Smithsonian. But it is the longstanding backbone of philanthropy. I’ll plant my little seeds over here, and you till your garden over there, and soon the world turns green and lovely.

This is not a matter of ideolog y, or of ­sweet-breathed philanthropists trumping wicked government officials. It is a simple matter of practicality and surrender to the facts about how humans accomplish things most effectively. Local citizens tend

Way back in 2012, Kickstarter roared past the National Endowment for the Arts in providing money for arts and culture projects.

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to have better information than remote authorities on the optimal ways to solve their problems. Trying to separate good schools or good doctors from poor ones is a very hard task from Washington, but people in the ­neighborhood can usually steer you right away to either. Nearby helpers are also likelier to tailor solutions to specific circumstances, and to create varied answers respectful of individual sovereignty instead of just one template for everybody.

So lack of coordination and uniformity needn’t be considered a problem. Indeed, it is often helpful. To take just one example, philanthropists can take much bigger risks than a government program creator would dare, because the philanthropist knows he’s not betting the entire national farm. He can try something new, re-tune as it unfolds, and expand or walk away depending on how it succeeds.

What do you suppose ran through the minds of the foundation officials who were first pitched on the idea of a bank built on $27 loans to rag pickers and fruit-cart pushers in Bangladesh? Probably that it sounded wildly improbable. Thank goodness they gave it a shot anyway.

And thus was microfinance born, which grew quickly into a strapping poverty-squashing grownup.

It’s a patchwork!

Our society has rapidly moved beyond the old ­industrial-revolution paradigm of the one big factory.

We now rely much more on networks and ecosystems of smaller providers working in loose synchronization. A perfect example of this is one of the great philanthropic creations of the last generation—charter schooling.

The very largest charter-school chain in the nation, KIPP, operates a total of 183 schools. Meanwhile, there are now more than 7,000 charter schools in total. So this is a radically decentralized sector. Most schools are solo operations or part of a very small group running just a handful of campuses.

And this allows a riot of choices. There are math and science schools. Schools built around the Great Books.

Hippie schools without walls, doors, or other controlling features! Work-oriented schools! Quasi-military schools where the all-male student body wears uniforms and has ranks! Academies that only assign books by gentle lefthanded poets! The charter movement is built on the idea that there is no single definition of what constitutes a good school, that education is an exercise in matching

The genius of the philanthropic mechanism is that it takes people just as they are and helps them do wondrous things, even when they’re not saints.

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each child’s temperament and gifts with an institution that can bring out his or her best self.

Part of this bubbling variety is churn. Every year now, about 650 new charter schools open their doors and offer their neighborhood some fresh approach. And in that same year, more than 200 schools will close down, because their offerings were not well embraced.

Here’s a Rorschach test: Are those wildly different schools, and that annual churn, signs of inconsistency, patchwork, and trouble? Or are they healthy signs of adaptation to what people want? If you prize stability and predictability, the conventional public school (which is basically impossible to close down even when it’s abysmal!) may be your preference (at least for other people’s children). But if it seems humane to offer citizens more of what they prize, and less of what they are choosing to walk away from, then the constant gurgling and gap-­ filling may be a reflection of the very kindest and gentlest sort of philanthropy.

Within the charitable sector itself there are even further levels of customization and “inconsistency.” The KIPP schools are an example. While they have a few bedrock principles and uniform high standards, schools in various regions are given a wide degree of independence and autonomy for coping with their own particular needs.

Goodwill Industries, another extraordinarily successful charity, is likewise more interested in results than in uniform rules and operations. Goodwill’s operation is vast: workforce training provided to 26 million persons annually in a great variety of fields; over $5 billion in revenues; more than 3,000 stores in the U.S., Canada, and 13 other countries. Yet each of the 165 Goodwill regional branches is autonomous in policy and funding, and has its own board of directors. Local branches can assist each other, and can request advice or aid from the world headquarters. But the central office’s budget is dwarfed by those of affiliates in cities like Milwaukee and Houston.

This same lack of monolithic uniformity can be seen across the philanthropic sector—in everything from the 1,400 independent local chapters of Habitat for Humanity, to the very different regional branches of the Appalachian Mountain Club that maintain thousands of miles of hiking trails in their own distinctive ways. This locally varying service provision is also a strong trend in private business today. The ­Netflix company actually has a catchphrase for the way it puts this principle to work inside its firm. It wants its various corporate teams to be “highly aligned, yet loosely coupled.” The vision, in other words, needs to be shared, but the execution should be decentralized.

This longstanding hallmark of charitable work is nothing that philanthropists should feel embarrassed or apologetic about. A riotous patchwork can be a thing of great beauty.

Some donors aren’t nice!

Another reality which sometimes gets critics fulminating and makes philanthropists defensive is the fact that certain donors are mean, or selfish, or seem more interested in getting their name on a building, or a tax break, than in altruism. In my experience, human kindness and empathy are commoner among loyal donors than among an average cross-section of the population, but it is definitely true that there are some philanthropists who do their good for notso-good reasons. Indeed, certain of these men and women are laughably far from angelic in their motivations.

J. Paul Getty was a cheapskate who made visitors to his estate use a pay phone at a time when he was one of the richest men in the world. He was a serial womanizer whose own father didn’t trust him. When his grandson was kidnapped for a $17 million ransom he kept ­dickering for a lower payment until the criminals cut off the boy’s ear and mailed it to Grandpa. Even then, Getty only put up as much of the ransom as was tax-deductible ($2.2 million) and gave his son the rest as a loan—at 4 percent interest. Yet Getty also gave the world one of its most sublime collections of Greek and Roman art, a gift that will elevate souls for centuries to come.

Russell Sage was a notorious miser and convicted usurer. He cheated his wife’s father in business. When a mad extortionist dynamited his office, he used a clerk as a human shield, then refused to pay compensation for the man’s injuries. Yet Sage’s fortune created one of the most influential early charitable foundations in the country.

There is no denying that corruption made Leland Stanford rich. To build his railroad fortune he employed kickbacks, bribes, stock watering, collusion, monopolization, and political manipulation. Yet genuine grief over the death of his son motivated Stanford to use his ill-gotten lucre to benefit the children of California (and ultimately all of humanity) by creating Stanford University.

George Eastman could be as cold-blooded as he was brilliant and generous. He asked his doctor to outline the exact location of his heart on his chest. Later he reclined on his bed, centered a pistol where the doctor had drawn, and committed suicide rather than face old age.

So philanthropists are not always pretty. And even when they do bring the best of motives to the task, their efforts can disappoint. As Andrew Carnegie established the Carnegie Endowment for International Peace with a $10 million grant, he optimistically included a stipulation on what the group should do after it ended all armed conflict: “When the establishment of universal peace is attained, the donor provides that the revenue shall be devoted to the banishment of the next most degrading evil.” He wrote that in 1910. Oops.

Are there stupid or cruel givers? Are there dumb projects launched by donors? Of course. But charitable programs that don’t produce results soon die or t­ ransform

J. Paul Getty (left) was not a good man. Leland Stanford (right) built his fortune on crooked practices. But both individuals did great things in their philanthropy.

Givers don’t have to be saints. The philanthropic mechanism can take all sorts of motivations and direct them into valuable outcomes. Adam Smith demonstrated that freely conducted commerce can turn even selfish impulses into useful behavior; this is as true for philanthropy as it is of business.

into something more useful. When was the last time you saw a dumb government program die?

And here’s the fascinating secret of philanthropy: Charity doesn’t have to come from people who are charitable. You don’t need to be an angel to participate.

In fact, motivations of any sort aren’t that important.

The genius of the philanthropic mechanism is that it takes people just as they are—kind impulses, selfish impulses, confusions and wishes and vanities of all sorts swirling together in the usual human jumble— and it helps them do wondrous things, even when they’re not saints.

Philanthropy is a machine that is able to convert the instincts and actions of even the meanest of men into truth, uplift, and beauty. Adam Smith taught us that freely conducted commerce can take normal human behaviors, including ugly and mercenary ones, and turn them to broadly productive uses. This is as true in the world of philanthropy as in business. Base impulses like greed, insecurity, image-laundering, and egotism can become gold, or at least good useful brass.

Happily, most philanthropy is the work of decent and earnest men and women. Even the worst misanthropes, however, are regularly redirected into doing useful, and even great, things for all of society. That is part of the power of America’s charitable structure.

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Part V “How Philanthropy Fuels American Success”

by Karl Zinsmeister

L

et’s close this sequence of essays 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 how America’s giving tradition produces some rich and rarefied philosophical, moral, and political gains.

Private giving satisfies deep human needs 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: his 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 Ralph Waldo Emerson helping himself.

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.

Confucius 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.

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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.

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.”

She describes a woman named Teressa who came up to her and said, “Since I didn’t have any money to help you out, I thought I couldn’t do anything for you at all.

And then last night, I was doing my daughter’s laundry, and I thought, how silly of me, maybe you had laundry I could do for you.” Every week for the remainder of the author’s time in school, Teressa picked up dirty clothes and returned them clean and folded, taking great pleasure in this little thing she could do to help.

Lots of research shows that this is a common phenomenon. A 2014 book by two Notre Dame social scientists called The Paradox of Generosity combined national surveys with in-depth interviews and group observations. It concluded that “the more generous Americans are, the more happiness, health, and purpose in life they enjoy. This association...is strong and highly consistent…. Generous practices actually create enhanced personal well-being. The association…is not accidental, spurious, or an artifact of reverse causal influence.” They conclude with the observation that “People often say that we increase the love we have by giving it away…. Generosity is like love in this way.”

In a 2008 paper published in Science, three researchers gave study participants money, asking half of the group to spend it on themselves, and the other half to give it to some person or charity. Those who donated the money showed a significant uptick in happiness; those who spent it on themselves did not. In his book Who Really Cares, economist Arthur Brooks cites a host of similar studies showing that

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BIG-PICTURE BENEFITS OF PHILANTHROPY

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Americans who make gifts of money and time are much more likely to be satisfied with life than non-givers who are demographically identical.

Private giving improves capitalism 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.

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 of 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 15-20 percent of the individuals on today’s Forbes list of richest Americans inherited wealth. About half of 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 No. 15, while the C ­ arnegie C ­ orporation has fallen to No. 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.

Bill Gates is in the process of giving away something like 99.96 percent of his wealth. (See the math on page 8.) He and the many other American entrepreneurs who have followed this pattern of recycling wealth back into society produce many good effects: they prevent the rise of family dynasties in this country such as exist in almost every other land; they fund national improvements that keep our nation healthy and strong; and their gifts to education and mechanisms of ­ self-improvement help many citizens following them to become rich.

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

American businesspeople are distinctive in their tendency to recycle wealth via philanthropy—funding mechanisms for others to prosper, and avoiding dynasties.

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­ roportionately more skilled and active, so that p 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.

Private giving strengthens democracy Civil society and charitable action sprang up in the U.S. even before government did. In most of our new commuEdmund Burke also viewed local association as nities, mutual aid among neighbors was solving problems the nursery for broader loyalty to one’s fellow man. long before there were duly constituted agencies of the state. “The little platoon we belong to in society is the first principle (the germ as it were) of public affections.

Americans of all ages, all conditions, and all dis- It is the first link in the series by which we propositions constantly form associations…. religious, ceed towards a love to our country, and to mankind,” moral, serious, futile, general or restricted, enormous he wrote. or diminutive. The Americans make associations to The great advantages that accrue to A ­ merica give entertainments, to found seminaries, to build from possessing a bubbling voluntary sector that inns, to construct churches, to diffuse books, to acts independently have been under threat since the send missionaries to the antipodes; in this manner Great Depression, cautions author Richard C ­ ornuelle. they found hospitals, prisons, and schools. If it is The economic crash gave American confidence a knock proposed to inculcate some truth or to foster some and planted the idea that “only government seems feeling by the encouragement of a great example, big enough” to solve serious social issues. “Our habit they form a society. Wherever at the head of some of ­sending difficult problems to Washington quickly new undertaking you see the government in France, became almost a reflex” and parts of the public and some or an aristocrat in England, in the United States you of our leaders have turned their back on our deep trawill be sure to find an association. dition of indigenous alternatives to government action.

Cornuelle complains that we often now That was Tocqueville’s observation in Democracy in ­America close to 200 years ago. speak of American life in terms of only two “sectors”: As the title of the visitor’s book suggests, what the public sector [government], and the private secimpressed him about voluntary action in the U.S. was not tor [commerce]. We leave out the third sector in our just its practical ability to solve problems, but the way it national life, the one which is neither governmental exercised and built up the social muscles needed if people nor commercial. We ignore the institutions which were to govern themselves in a healthy democracy. Toconce played such a decisive part in the society’s vibrant queville considered American voluntary associations not growth…[which] made it possible for us to build a just signs, but the source, of effective s­ elf-rule. He wished humane society and a free society together. aloud that this American tradition could be transferred to Europeans, who had lost “the habit of acting in common” This third sector, operating in the space between the on their own, due to generations of smothering by the state. individual and the state, between the coercion of law and Some people, Tocqueville wrote, the profit-seeking of commerce, goes by various names: civil society, the voluntary sector, charitable action. Back claim that as the citizens become weaker and in 1970, the Peterson Commission pointed out the crucial more helpless, the government must become 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

Philanthropy’s deeply decentralized nature increases variety in our lives, encourages social invention, and protects non-mainstream points of view.

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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

kremlin.ru; Yaa zahra5; Marquette University

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.”

kremlin.ru; Yaa zahra5; Marquette University

Strongmen like Benito Mussolini, Vladimir Putin, and Ali Khamanei (left) hate philanthropy and the strong civil society, independent of state control, that it produces —which is why each suppressed private giving and charitably funded organizations in his country.

On the other hand, advocates for individual liberty and dignity like Alexis de Tocqueville, Edmund Burke, and Mother Teresa (right) have all celebrated independent giving and private action. Not just as ways of fixing social ills, but as vital mechanisms through which citizens exercise their faculties of wisdom, independence, moral goodness, and tolerance —the very qualities needed to keep a democracy healthy.

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Philanthropy has a long history of taking up crucial burdens in the face of government failure.

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­ atural contenders for public responsibility. The strug- societies have had flourishing philanthropic sectors. In n gle would enhance the effectiveness of both.

America, our freedom to expend charitable resources without supervision or control is ultimately sheltered In some quarters, Cornuelle observes, by the First A ­ mendment of our Bill of Rights, which protects our right to assemble and act outside of govthe very idea of competition with government is, ernment, to dissent, to take heterogeneous, unpopular, or by a weird public myth, thought to be illegitimate, minority-supported action to redress grievances. disruptive, divisive, unproductive, and perhaps Enlightened, practical, democratic leaders immoral…. Far from being illegitimate, lively shouldn’t just tolerate the independent actions of donors competition with government is essential if our and volunteers, they should embrace and encourage democratic institutions are to work sensibly…. them. Social entrepreneur Neerav ­K ingsland, who The government doesn’t ignore public opinion gained prominence by helping build the nation’s because the people who run it are naturally perverse. most extensive web of independent charter schools in It isn’t wasteful because it is manned by wasteful New Orleans after the Katrina disaster, has argued people…. Without competition, the bureaucracy that the most effective and humane thing that many can’t make government efficient…. Innovation public servants can do today to help needy populations painfully disrupts its way of life. Reform comes only is to let go of their monopolies on power. He uses the through competitive outsiders who force steady, effi- term “Relinquishers” to describe p ­ rogress-minded cient adjustment to changing situations. officials who are willing to transfer authority away The independent sector will grow strong again from centralized bureaucracies in order to allow when its leaders realize that its unique indispensable experimentation and improvement driven by philannatural role in America is to compete with govern- thropy, commerce, grassroots activism, and other ment. It must be as eager as government to take on independent forces. new public problems.

To illustrate how quickly societal conditions can improve when intelligent Relinquishers cede power There are times and places where governmen- to civil actors, Kingsland cites examples from the U.S. tal rulers feel threatened by the philanthropic process. and abroad. One Relinquisher triumph unfolded in Philanthropy practiced on a mass level, as in America, New Orleans after philanthropists were allowed to pour becomes a kind of matrix of tens of thousands of private resources and expertise into restructuring that city’s legislatures that set goals and priorities, define social ills, schools. Government continued to provide funds, fair and methodically marshal money and labor to attack rules, and accountability, but it allowed independent them—without asking the state’s permission. Some rul- operators to take over the running of classrooms and ers prefer dependent citizens who are consumers rather academies. The result was that the number of classroom than producers of governance. seats rated “high-quality” quadrupled in four years. The Certainly tyrants hate philanthropy. They want the fraction of students testing at the proficient level leapt state to be the only forum for human influence and con- from 35 percent to 56 percent. The ACT scores of gradtrol. “Everything within the state, nothing outside the state, uating seniors hit an historic high. nothing against the state,” was Mussolini’s encapsulation.

Sharing responsibility for societal improvement Independent associations and private wielders of resources with funders and volunteers in civil society will often be must be co-opted or suppressed. The charitable sector is a policymaker’s most practical and speedy path to excelnot only denied a seat at the table, it is put on the menu lence and success—as well as a more democratic course. to be eaten. One of the first things every totalitarian government has done upon assuming power—from Nazis, to It’s not wise to rely solely on government communists, to radical imams—is to destroy charities, pri- “Every single great idea that has marked the twenty-first vate giving, and voluntary groups. century, the twentieth century, and the nineteenth cenWe’re seeing the same phenomenon today in tury has required government vision and government authoritarian countries like Russia, China, and Iran, incentive.” That’s Vice President Joe Biden. “The ballot where charities are being shut down out of fear that box is the place where all change begins in America.” they will provide alternate sources of ideas, cultural That was Senator Ted Kennedy. solutions, and social legitimacy. Only the most free These speakers overlook 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 ignore the profound role of independent philanthropy in altering American history.

At a time when governments at the local, state, and national level were all scandalously derelict in their treatment of African Americans, a long line of philanthropists —George Peabody, Anna Jeanes, Anson Stokes, John Slater, Katherine Drexel, John

Rockefeller, George Eastman, and many others —stepped up to make sure whole generations of black Americans didn’t grow up uneducated. Collectively these philanthropists built thousands of schools and trained armies of teachers to serve the

neglected, often in the face of state resistance. Julius Rosenwald, who built Sears, Roebuck into the Amazon.com of his day before turning to philanthropy, personally funded 5,357 school buildings during the Jim Crow era, and paid for many teachers and books. More than a quarter of all the African American children in the country at the time of Rosenwald’s death were

Fisk University, John Hope and Aurelia E. Franklin Library

educated in one of his schools.

Let’s take the civil rights movement—a favorite example of advocates who believe that nothing good happens unless government does it. Back in 1704—when 1,500 African Americans in New York City were held as slaves with full government sanction, and educating them was forbidden, private donors set up schools to instruct hundreds of slaves on the quiet. In the early 1830s, when state and federal governments still made it a crime to teach a slave to read, private donors like Arthur Tappan were paying for African Americans to go to college. Less than two years after the bullets of the Civil War stopped flying, philanthropist George P ­ eabody was distributing millions of his own dollars across the South to train teachers and set up schools without racial considerations so that freed slaves and other illiterates could get learning—despite the ferocious antipathy of state and local governments for that cause. In 1891, philanthropist Katharine Drexel gave her entire fortune (half a billion dollars in contemporary terms) to create a new religious order devoted to assisting A ­ frican Americans and Indians. She established 50 schools for African

­ mericans, 145 missions and 12 schools for Native A Americans, and the black college Xavier U ­ niversity in New Orleans. In these same years, governments at all levels were doing little more than breaking promises to Native A ­ mericans and neglecting African Americans.

As the twentieth century opened, hundreds of governments were fiercely enforcing Jim Crow laws that stunted black education. But John Rockefeller was pouring money into his new creation for providing primary education to African Americans. Then he boosted up 1,600 new high schools for impoverished blacks and whites. He eventually put almost $325 million of his personal fortune into the venture. Simultaneously he was spending millions to improve public health by nearly eliminating hookworm.

Numerous private givers followed the leads of George Peabody and John Rockefeller and donated ­millions of dollars to improve the education and social status of African Americans at a time when they had no friends in government. The philanthropic help came from Anna Jeanes’s Negro Rural Schools Fund, the Phelps Stokes Fund, the Virginia Randolph Fund, the WINTER 2016

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Donors have often been first to act in saving the victims of genocide. During the pogroms against Jews around the turn of the twentieth century, philanthropists were foremost in rescuing the endangered. The murderous jihad against Armenian Christians at about the same time was likewise most actively addressed by charitable agencies and donors. During the Bosnian genocide in the early-1990s, private aid to Sarajevo is estimated to have saved more lives than the efforts of all national governments plus the United Nations combined.

John Slater Fund, and others. These all continued their work until government finally caught up and started desegregating schools in the 1960s.

African American children whose education and social conditions were being wholly neglected by the state got their biggest lift of all from philanthropist Julius Rosenwald. Starting in 1912, he donated the current equivalent of billions of dollars to build schoolhouses in hundreds of counties where black education was ignored. In less than 20 years, the ­R osenwald program erected 4,977 rural schools and 380 companion community buildings in most of America’s locales with a substantial black population.

At the time of Rosenwald’s death in 1932, the schools 52

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he built were educating fully 27 percent of all the African American children in our country.

Many economic producers and sensible leaders were raised up in these philanthropically created schools.

Absent these private efforts by donors, racial improvement and reconciliation in our country would have been delayed by generations. Government not only had little to do with this philanthropic uplift—many arms of government did their very best to resist or obstruct it.

A skeptic might say, “Well that’s nice, but it’s ancient history. Today, the government leads all necessary change.” That is gravely mistaken.

Guess where America’s most segregated and often most inadequate government-run schools are located at present? All in northern cities with activist governments: Detroit, Milwaukee, New York, Newark, Chicago, and Philadelphia, research shows. According to the UCLA Civil Rights Project, New York is the state with the country’s most segregated schools—thanks to New York City, where the proportion of schools in which at least 90 percent of the students are black or Hispanic rose sharply from 1989 to 2010.

The government-operated schools in New York City drip with rhetoric about “social justice.” But it is private philanthropy that is shaking up the city’s complacently bad educational establishment today—by launching charter schools. As of 2014, there were 83,200 New York City children in charters, nearly all of them minorities and low-income, and 50,000 more remain on waiting lists. ­Stanford investigators and others find that these children are receiving significantly better educations than counterparts in conventional government-run schools, in some cases even outscoring comfortable suburban schools in annual testing. Yet donors and charter-school operators continue to have to fight through the resistance of reactionary liberals in city hall and the New York City Council.

Or let’s look at another area where conventional wisdom says nothing will happen except under governmental banners: Who saved the refugees disrupted by the two World Wars and the ethnic genocides of those decades? When the U.S. Ambassador to Turkey discovered that Ottomans were starving and killing Jews in Palestine, he sent an urgent telegram to philanthropist Jacob Schiff in New York. A fundraising committee was set up, and over the years to come it distributed hundreds of millions of dollars, donated by more than 3 million private givers, saving many thousands of Jews.

It wasn’t only Jews who needed saving. At that same time, Muslims were carrying out a jihad against Armenian Christians that ultimately took 1.5 million lives. The U.S. government did little, but everyday Americans, missionaries, church members, and philanthropists sprang into action to both save lives immediately and then sustain the Armenians

dislocated by the genocide. Nearly 1,000 Americans volunteered to go to the region to build orphanages and help refugees. They assumed responsibility for 130,000 mother- and fatherless children, and rescued more than a million adults.

It was a similar story when fascism swept Europe. The U.S. government dragged its feet and failed to organize any speedy effective effort to save the Jews, gypsies, Christians, and others targeted by the Nazis. Private donors jumped into the breach. The Rockefeller Foundation, for instance, established two special funds that worked, under the most difficult wartime conditions, to relocate mortally endangered individuals to Allied countries.

As with the civil-rights example, philanthropy taking up crucial burdens in the face of government failure is not just a story in the past tense. In 1993, all ­Western governments were pathetically slow and inadequate in their response to the ethnic cleansing in Bosnia that killed tens of thousands. The most effective actor by far was philanthropist George Soros—who gave $50 million to insert a highly effective relief team into the city of Sarajevo while it was under siege, re-establishing gas and electric service during the bitter winter, setting up an alternate water supply, and bringing in desperately needed supplies. It has been estimated that Soros’s gift saved more lives than the efforts of all national governments plus the United Nations combined.

The list of great ideas and dramatic improvements instigated by philanthropy while government was AWOL could be expanded endlessly, from the Green Revolution and invention of microlending abroad, to domestic achievements like the recovery of desolated urban parks, control of drunk driving, and creation of the country’s best job-training programs for economic strugglers. And philanthropic change tends to come with much less friction. As one social entrepreneur has put it, philanthropy generally practices “the politics of addition and multiplication,” while government action often comes via “the politics of subtraction and division.”

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 detailed 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….

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.

Why philanthropy is indispensable to American freedom This description of America’s social order, and Let’s end with a bit of extended historical analysis its dual devotion to freedom and goodness, is helpful

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.

Because humans are not predictable robots, the healthiest forms of social reform often proceed by experimenting on a small scale. This is an argument for philanthropy.

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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 c­ hildren 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

Philanthropy is essential to keeping America operating as that exceedingly rare society where most individuals can steer their own lives.

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experience a decline in dignity, s­ elf-­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 the vast majority of 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 the 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.

It turned out to be indispensable to both our personal independence and our national success. Philanthropy 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 toward freedom-killing security blankets.

Philanthropy is thus 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. Our voluntary giving isn’t some sweet hobby. It’s not just a nice national sideline. It’s indispensable to our free society. P

The A Public rt of Philan Policy thropy (second in a thr

ee-part

series)

Using the Courts to Improve America In three consecutive issues of Philanthropy we are presenting wisdom from America’s leading experts on public-policy philanthropy. This niche—where donors aim to nudge national opinion and lawmaking in constructive directions—is a difficult art, but one that can have large payoffs for those who understand its mysteries.

In this installment, our authorities look at investing in various forms of legal action

Seamus Hasson & Bill Mumma At the Becket Fund, founder Seamus ­­ Hasson and president Bill Mumma have relied on donors who understand the long-term importance of their strategy.

Providing free, first-rate legal representation to practitioners of all religious faiths when they come under pressure has been Becket’s mission from the beginning. In the process, the nonprofit law firm not only aids individuals under duress, but sets precedents in our top courts that protect the religious freedoms of all Americans.

Religious liberty became a passion of Seamus Hasson very early. “I actually went to law school with the idea of creating a public-interest firm that would defend

as a way for donors to solve problems and improve society. And a sidebar notes that this is not a field for philanthropists seeking immediate gratification.

These expert testimonies are condensed from the new Philanthropy Roundtable book Agenda Setting: A Wise Giver’s Guide to Influencing Public Policy (philanthropyroundtable.org/guidebook/ agenda_setting).

religious liberties. At the time, religious freedom was a divisive issue. One side was saying ‘religion is bad for you, almost like smoking. It’s something you can do in private if you really want to, but whatever you do, don’t do it in public.’ On the other side, the common argument was simply, ‘This is a Christian country,’ which was legally and historically incorrect.”

“So we had a growing problem. Courts were stripping people of their right to follow their conscience and express themselves religiously. But the public counterarguments were weak. What was needed was a defense of religious pluralism.”

“I founded the Becket Fund to represent all religions. Anglicans to ­Z oroastrians, I like to say. We don’t endorse the faiths, just the individual’s right to practice.”

“Many potential donors said we’d get more supporters if we focused on just ­Christians. But there were already people doing that. And they weren’t winning the culture war. Fortunately we found donors willing to try a new tack: the Randolph, Bradley, and Olin foundations, and one little old lady.”

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“Our first notable case involved The Beginner’s Bible. Zack was a first grader in a New Jersey public school. The teacher had an activity where students brought their favorite books to read in front of the class.

His favorite book was a cartoon version of the Bible, and he wanted to read the story of Jacob and Esau. It didn’t even mention the word God. But his teacher told him he couldn’t read that publicly in school.”

“Zack’s mom felt this was a violation of freedom of expression. So we went to war,” states Hasson. “About the same time, we fought for a Muslim police officer who wanted to grow his beard. Our donor roster grew after these cases. We started with a $300,000 annual budget and quickly rose to $5 million.”

Several other top-flight public-­interest law firms focused on protecting religious freedom have grown up in parallel over the past two decades. For instance, the same year Hasson founded Becket, the Alliance Defense Fund was created to offer a ­counterbalance to the ACLU on issues of church and state.

Now known as the Alliance Defending ­Freedom, the group has been influential in 55

Supreme Court decisions, legal training, public education, and other areas.

Becket Fund president Bill Mumma notes that “by definition, religious liberty is about the law, so building a r­ eligious-­liberty movement requires law firms. A range of firms have grown up, but they aren’t ­antithetical to each other. They all take on different aspects of the fight. Our mission is very focused on ­higher-level appeals that will set a precedent.”

“A donor might say, ‘The local school district stomped on this poor Christian teacher. You ought to take that case. This person is suffering.’ That’s true, yet it may not be a case the Becket Fund can take. If it’s in an area of law that has already been established in favor of the teacher our answer is ‘Get yourself a good lawyer. You’re going to win.’ Our limited resources need to be reserved to carving out new protections and precedents in areas where the law is not yet clearly in favor of religious liberty.”

“We have relied on donors who understand the importance of strategy and case selection. Some of them have been helpful in identifying cases.”

“For future litigation, one of our areas of interest is the Blaine Amendments. In the early 1900s, Senator Blaine tried to pass a Constitutional amendment that would prevent public money from going to Catholic schools. His federal effort failed, so he went to the states and asked them to add Blaine amendments to their state constitutions, prohibiting public funding of church-connected schools.”

“The Ku Klux Klan got involved.

Anti-Catholic sentiment was really hot.

The public feeling eventually passed away, but Blaine amendments remain on the books in states all across America. Now instead of Protestants fighting Catholics over these amendments, it’s anti-religious groups fighting defenders of religious freedom. Helping the religious-freedom side win will require a long campaign.”

“Another effort we’re pursuing with donor support is to protect people’s ability to practice their profession without committing acts that are contrary to their religious views. This is an issue in health care, where nurses and doctors are sometimes forced to agree to participate in abortion, for instance. If an employer were 56

to say ‘no Catholic doctors allowed,’ that obviously would be impermissible. But conscience rights for religious professionals are not well-protected.”

“Another frontier is at universities that are now saying it’s discriminatory for student groups to require their leaders to share the central convictions of the group. A Christian student association cannot require its president to believe in Jesus Christ. If a group of atheist students show up at the public meeting and vote an atheist as president of the Bible study, it has to be accepted. We think that’s a violation of religious liberty.”

Philanthropists interested in religion will increasingly find it impossible to avoid law and public policy, says Mumma. “All the religions of the world occupy themselves with marriage, births, raising of the family, sickness, old age, and death.

As governments grow bigger and intrude more and more in these areas, government enters space that was formerly staked out by religious organizations. It dictates issues where people look to religion for answers.

This clash is intrinsic to the expansion of the government. So legal action and political action are required to sort this out.”

“If defenders of religious freedom have the resources to fight, I am optimistic about what will happen over time. But it’s like tuning a piano or a guitar. Every so often you have to go back and tighten the strings.”

Dick Weekley In 1993, Dick Weekley attended a p re s e n t a t i o n detailing how litigation was driving businesses out of his home state of Texas.

Doctors were leaving their medical practices or retiring early. Businesses were reluctant to expand in the state because of abusive lawsuits.

Weekley knew this was a crisis and somebody had to fix it. But “I had no time to lead the effort,” says the h ­ omebuilding entrepreneur. Nobody else stepped up, though. So he became the man who brought legal reform to Texas.

PHILANTHROPY

There was a reason other people kept their heads down. The Texas Trial Lawyers Association, known as “the Trials,” was the most powerful special-interest group in the state. For a generation, the Trials had preyed on hospitals and businesses, driving up the cost of everything. “There was no effective opposition,” says Weekley. “This problem was in the process of destroying the state.”

Weekley and several of his friends had tried to support existing organizations. “Before long, we recognized that we needed to try something different—we needed a new organization that would think out of the box,” he says.

In 1994 Weekley founded Texans for Lawsuit Reform and became the full-time volunteer leader. “I felt like I had been dropped into the middle of the Atlantic Ocean. I didn’t know anything about public policy or politics.”

One of the group’s first insights was to reject the established methods of changing public policy. Particularly the “aversion to risk” of conventional business associations, where “nobody wants to make an enemy or become a target.” In this case “an extremely wealthy group of personal-injury lawyers with a narrow self-interest had been working the legislature for decades and had massive influence.” So Texans for Lawsuit Reform went to work on the legislature.

One year later a breakthrough was achieved. Eight separate pieces of legislation got passed that reined in the power of the Trials in a variety of ways—from capping punitive damages, to prohibiting venue-shopping. Over the next several years, Texans for Lawsuit Reform built up legislative allies and pushed for more reforms.

Arguing for bills on their merits went only so far. “We also needed to engage in politics, and help to elect legislators who had the courage to vote with their conscience and their constituents for lawsuit reform. Research and advocacy is not enough,” says Weekley.

So in addition to performing the traditional work of a think tank, ­Texans for Lawsuit Reform created TLR PAC, which funded candidates willing to solve the state’s litigation problems.

In 2002, it played a key role in the ­Republican takeover of the Texas House of ­R epresentatives, which ­D emocrats

had controlled since Reconstruction. A flood of reforms followed, making Texas courts more balanced, and fairer to retailers, manufacturers, and doctors. By 2006, the Pacific Research Institute’s “U.S. Tort ­Liability Index”—which evaluated every state on its legal climate—ranked Texas as best in the nation.

Weekley summarizes the lessons for other philanthropists who might be contemplating taking on an entrenched public problem. First, think big: “We’re totally against gradualism and halfway measures. We kept hearing that this was how things were done—one bill at a time, always watered down, legislative session after legislative session. We didn’t accept that.”

It’s important to brace for a fight that can turn dirty. “There are vested interests on the other side, and often tens of billions of dollars at stake when you change public policies. It’s going to get rough.” He tells stories of journalistic hit jobs, office break-ins, phone lines being tapped, and even death threats.

Volunteer leadership is essential.

“Unless there are committed volunteers at the top, people won’t get out of their chairs to help.” And, finally, “this isn’t a one-time task.” Continuing effort and attention is needed to keep public policies healthy. (For more on the importance of patience and long-term effort in public-policy philanthropy, see the sidebar later in this story.)

Texans for Lawsuit Reform published a playbook describing how the group met its objectives and achieved one of the last generation’s major donor-led policy reforms. Visit tortreform.com and look for “Template for Reform.”

Clint Bolick For lawyer Clint Bolic k, understanding the power of philanthropically funded public-­interest litigation begins with a history lesson.

“For decades, starting with the creation of the NAACP Legal Defense Fund and

the founding of the ACLU early in the twentieth century, followed by the rise of groups in the 1960s and ’70s that deployed lawsuits against ethnic and environmental grievances, the Left had free rein in the courts. There really were no conservative organizations that were active at all.”

“Starting in the late 1970s, the U.S. Chamber of Commerce added a little bit of balance with some conservative ­public-interest litigation. Initially, theirs was very much a defensive strategy, designed to blunt the highly effective liberal organizations that were basically setting all the new standards in our courts.

Out of that came the first generation of conservative public-interest law firms, organized on a regional basis.”

“These entities had very mixed success.

They tended to receive a large percentage of their giving from corporations, and I would characterize them as pro-business rather than pro-free enterprise. They didn’t attract great talent, did not win many cases, and had a limited impact. Several fell by the wayside.

The two that remain today are Pacific Legal Foundation and Mountain States Legal Foundation, which have evolved into effective organizations. Chip Mellor and I, before we co-founded the Institute for Justice, both worked at Mountain States, and we were frustrated by its defensive agenda and narrow pro-business approach at that time. So we started thinking about what a more effective conservative public-interest law firm could look like.”

“We put together a game plan for what would become the Institute for ­Justice. Our model was national rather than regional. It set goals rather than respond to the Left’s agenda. It developed constitutional precedents that we wanted to achieve.”

“We believed our mission would attract support from foundations and individual contributors—donors with less of a mercenary self-interest, and more desire

to establish legal principles. We wanted to avoid dependence on a small number of large contributors. It was very important for us to have autonomy, and I think our donors appreciated that we weren’t dominated by contributors who might be able to influence the work we were doing.”

The surge of interest exceeded Bolick’s expectations. “No one had really tried to get individual donors invested in litigation. And it turned out that donors were very moved by the stories of the people we represented. It was action-oriented work more than research-oriented, and people felt invested in the cases we filed.”

“The donor base is broader today.

I received my very first seed funding, long before the Institute for Justice, from the Bradley Foundation. I opened the ­Washington, D.C., office of Landmark Legal Foundation—one lawyer with an idea—and they took a risk on me. Bradley has continued to be visionary in strengthening state-based policy organizations and making them more sophisticated and comprehensive in their approach—adding the litigation side, the lobbying side, the investigative journalism side, whatever they don’t have. The Randolph F ­ oundation, Searle Freedom Trust, Dan Peters, and the Challenge Foundation are among those who have been especially open to taking risks. Pioneer donors don’t have to go it alone quite so much anymore.”

After years building court cases at IJ and the Alliance for School Choice, B ­ olick joined a new wave of public-interest litigators a few years ago. “The Goldwater Institute model, started in 2007, was the first time a litigation organization was attached to a state-based policy organization. We use litigation to extend and complement policy work, and we share infrastructure, fundraising, communications, and research with the wider organization. This model has now been replicated in ten states.”

When you change public policies, there are vested interests on the other side, and often tens of billions of dollars at stake.

It’s going to get rough.

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“The state courts and state constitutions are really the virgin territory for conservative public-interest law groups. I see vast expansion opportunities there. Free-market reform is now likelier to come from the states than the federal government.”

“States are incubating ideas that have potential to spread rapidly to other places.

For example, I’m very excited about the ­Vergara v. California case that knocked down teacher tenure, since that policy has created so many dysfunctional schools. I’ve been working with activists in California to develop a follow-up to Vergara that would challenge public-school attendance zones and push for open school enrollment in California.”

“One thing a number of litigation organizations are focusing on is reining in the power of public-employee unions.

Here in Arizona we’ve challenged the widespread practice where employees who were hired to be cops or firefighters are instead paid to work for their unions.

They are still on the public payroll but report every day to union headquarters. We were the first to challenge so-called ‘union release,’ and so far we’ve been successful.”

“Every good lawsuit filed by a public-­ interest law firm should be accompanied by an equally aggressive and sophisticated media agenda. Sometimes you lose a case in the courtroom and win in the court of public opinion, as we did in the Kelo case, where eminent domain powers were abused. Quite apart from what transpires in the courtroom, a lawsuit can be a catalyst for policy change in the legislature.”

“I think that both sides make the other more successful. When we go to court challenging a corporate subsidy, we have a team of economists who help us identify the most vulnerable corporate subsidies. On the other hand, any time we walk into a legislator’s office, they know that we’re not just bringing them a good idea. We may sue if we’re not successful in the legislative arena. We have big litigation guns if necessary.”

Compared to other branches of ­public-policy philanthropy, “It’s much easier to measure victory in tangible terms,” notes Bolick. “One benefit of litigation is that you can win a complete victory without sacrificing your principles in the way that passing legislation often requires.” H P 58

Be Patient Most public-policy philanthropists are quick to point out it’s slow work.

You must lay the groundwork and sometimes then wait for a news event or crisis or ripening of public opinion that will spur policymakers to grab the alternative you have built.

Michael Grebe, president of the Lynde and Harry Bradley Foundation, which donates tens of millions of dollars every year to public-policy philanthropy, warns that patience and humility are important. “We’re not looking for quick, short-term solutions,” he says. “In many cases, we’re trying to solve long-term problems.” He cites Politics, Markets, and America’s Schools, a 1990 book by John Chubb and Terry Moe outlining the potential of school choice. “We didn’t really know how good that book was until years later, when legislators had picked up on it and began to make school choice a reality in so many places.”

And not every grant will work out. “We expect a certain amount of failure,” he says. “That’s what happens when you’re willing to take chances.”

“Public-policy philanthropy is different from other areas of philanthropy—it’s less susceptible to the measurement of outcomes,” he adds. “We try to measure effectiveness, but this is difficult. When you fund a book, what do you ask? How many times was it cited in the press or in academic journals? That tells you something, but what it tells you may not be very helpful.”

Melissa Berman, president of Rockefeller Philanthropy Advisors, notes that “For many people, policy and advocacy work isn’t tactile and concrete enough. You can’t always be sure you’re making progress.”

Public-policy philanthropy can also create unwelcome visibility.

“If you want to take a strong position on policy, one thing you need to understand is how that might impact other members of your family who either disagree with you or hate the limelight.”

For donors who still want to work on public policies, Berman asks them to first decide if they want to change law (create new policy), or change the groundswell support around a law (through advocacy).

“Take the campaign that made drunk driving unacceptable. It was already illegal, but through efforts like Mothers Against Drunk Driving, people began to feel more comfortable saying, ‘No, you can’t get behind the wheel of a car.’”

“One common mistake in investing to change public policies is thinking that just putting facts in front of people creates action.

Everybody wants to believe that the truth will set us free, but that’s not how it happens. There are three stages: Awareness. Agreement. Action.

It’s important to understand that often you have to create all three.”

“Donors need to think through what other resources besides their financial capacity they can bring to bear. Do you have knowledge?

Networks? Reputational capacity? Technical skills? The chasm from funding to doing is one that you need to understand.”

“The key to being an effective donor in this space is patience.

And respect for other people’s points of view is important. Someone who believes that anybody who doesn’t agree with him is stupid is not likely to change many minds. Understanding how to create a coalition is really helpful.”

PHILANTHROPY

CATHOLIC SCHOOL RENAISSANCE

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Catholic School Renaissance A Wise Giver’s Guide to Strengthening a National Asset Andy Smarick and Kelly Robson

A Historic Revival of Catholic Schools is On the Horizon This wise giver’s guide can be your playbook for participating

Available at no charge to Philanthropy magazine readers To order your free printed copy of Catholic School Renaissance: A Wise Giver’s Guide to Strengthening a National Asset e-mail main@PhilanthropyRoundtable.org or call (202) 822-8333 For details, or a free PDF download, visit PhilanthropyRoundtable.org/guidebook Also available in print at Amazon.com and as an e-book in online stores

Over the last generation, Catholic schools have been buffeted by changing demographics, new competition from tuition-free charter schools, and other factors.

Yet two million children remain in Catholic schools today, including a great many low-income and minority youngsters for whom Catholic schooling is a lifeline in an otherwise dysfunctional neighborhood. And Catholic schools get enormous bang for their educational buck.

Now savvy donors are importing fresh management structures, teacher pipelines, helpful technologies, education-reform allies, public-funding programs, and private investors that are priming Catholic schools for new success. If you’d like to aid a ­­Catholic-school revival, this practical guide offers hundreds of opportunities for ­ life-changing philanthropy.

ideas Big Bets and the Aspiration Gap What accounts for the difference between what donors want to achieve and where they make their largest gifts?

BY WILLIAM FOSTER AND GAIL PERREAULT

When Don Fisher stepped down as chief executive of Gap Inc. in the mid 1990s, he and his wife, Doris, looked for ways to improve public education. With the help of an expert adviser they found the Knowledge Is Power Program, which at the time consisted of just two charter middle schools in Houston and New York City. After lengthy scrutiny, the Fishers committed $15 million to bring KIPP’s results-oriented methods to many more communities and students. That amount was roughly three times KIPP’s annual revenue at the time. “Their gift gave us permission to think big,” says KIPP CEO Richard Barth. “We would not have 183 schools today if Don hadn’t encouraged that kind of thinking.” KIPP’s success has been a major factor in the popularity of charter schools, and a spur to ambitious school reform. The Fishers bet big, and they had a major effect.

Research by the Bridgespan Group shows that, like the Fishers, many of today’s largest donors aspire to ambitious social change—providing better educational opportunities for people in need, for example, or eliminating disparities in health care.

Among donors who have committed to the Giving Pledge or been listed as Forbes 50 Top Givers, 60 percent cite a form of social change as their main philanthropic objective; nearly 80 percent include one among their top two or three priorities. Yet only a modest proportion of today’s biggest gifts focus on social change. Excluding the Bill & Melinda Gates Foundation (more on that below), U.S.-based donors devote only 20 percent of their commitments of $10 million or more to social change.

The other 80 percent of large gifts go to what are best described as traditional ­institutions—­primarily universities, hospitals, and cultural centers.

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Those institutions are hugely important to society, and our taxonomy is not meant to characterize any gift as more or less worthy. But the discrepancy between where donors say they wish to give and where they actually give is striking. Many generous and ambitious philanthropists say, “I can’t find enough opportunities to put large amounts of my money to work on the issues I really want to change.”

After years of searching fruitlessly for such defining opportunities, there’s ­frustration—and concern that they’re not making the difference they could.

This “aspiration gap” between ambition and action has global import. If it were to close, billions of additional big-bet dollars could flow to the world’s thorniest problems—the results of which might change the lives of millions of people for generations to come.

The flow of big bets To better understand big bets, we built a database of every identifiable philanthropic commitment of at least $10 million by U.S. donors between 2000 and 2012. We studied the share of those gifts going to organizations or initiatives focused on social change.

W hile ever yone’s definition of social change will differ, we built our categorization around the missions that donors themselves identify, including a broad range of activities covering human services, the environment, social movements, and health care. We considered most giving to universities, hospitals, and cultural institutions to be “institutional” support. We did, however, include big university gifts that specifically focused on social change, such as Robert and Dorothy King’s gift of $150 million to found the Stanford PHILANTHROPY

Institute for Innovation in Developing ­Economies, which aims to fight poverty in the poorest parts of the world.

Between 2000 and 2012, the total dollar volume of all announced philanthropic big bets averaged $8 billion a year. Nonprofits addressing social change received approximately $1.6 billion a year—a fifth. This proportion was roughly constant across the 13 years. The rate was even lower among “giving-while-living” donors: just 16 percent of big bet dollars from this set of philanthropists went to social change, compared to 28 percent from institutionalized philanthropies.

We excluded the Bill & Melinda Gates Foundation from our analysis because of its exceptional size. It gives away more money—by a factor of nearly six—than the second-largest foundation in the U.S., and more than the next 12 foundations combined. During our 12-year study period, Gates gave almost as many big-bet dollars to social change as all other donors combined.

The book Forces for Good profiles some of today’s most successful nonprofit organizations. The authors screened hundreds of groups to identify a dozen standouts.

Their “winners” were entities like the Environmental Defense Fund, City Year, Share Our Strength, and the Heritage Foundation. Of these dozen, 11 received a critical big bet.

Bridgespan identified 14 widely accepted social-movement successes in recent decades. These included the Green William Foster presented this argument at The Philanthropy Roundtable’s Annual Meeting in October. Gail Perreault is a senior director at ­Bridgespan and co-authored a version of this for the Stanford Social Innovation Review. Alison Powell and Chris Addy contributed reporting.

Revolution of the mid-­twentieth century, the rejuvenation of conservatism in the 1970s and ’80s, and the expansion of gay rights in the past decade. Over two thirds of these successes received at least one pivotal big bet from a donor.

Big bets on social change often dramatically alter the organizations or movements they s­ upport. Building leadership teams, launching new services, expanding to new locations, or birthing advocacy campaigns are common innovations. Big bets can create a leap in their recipients’ abilities or long-term ambitions.

Consider the impact of the late­ Robert Wilson’s very large gift to The Nature Conservancy. “Bob was maybe the best donor ever,” says Mark Tercek, TNC’s current CEO. “He was looking for bold ideas, and he had confidence in the organization’s leadership—the kind of confidence private sector investors usually need before they’ll invest big in a company.”

In the 1990s, TNC was already a large organization, with a strong network of domestic donors. The challenge was that while some of the highest impact work to be done was outside the U.S., the donor network centered on TNC’s state chapters. Wilson initiated a powerful challenge to change that. Beginning in 1997 with a $10 million commitment, which ultimately grew to a total of $100 million over the next decade-plus, ­W ilson matched any U.S. donor’s international gift with a gift to the donor’s state chapter. TNC raised $150 million from other donors as part of this challenge, enabling the organization to expand its international work dramatically.

A second challenge grant followed. And even though these challenge grants are over, the beneficial effect on TNC’s international fundraising endures. Compared to its starting point of $12 million in 1997, TNC’s annual international funding stood at more than $140 million in 2014.

Why the aspiration gap?

If roughly 80 percent of today’s largest donors publicly aspire to social change, and there’s evidence that big bets can be a

­ owerful tool, why are only a fifth of all big p bets going to social change? Here are some of the challenges to structuring a successful big bet: Limited ready opportunities. A donor wanting to make a big gift to a university or hospital will have no trouble finding an impressive institution with capacity to make use of a large investment. But capacity can be a real barrier for donations to social change. “There’s a relatively small number of organizations that can effectively metabolize seven- and eight-figure checks,” says James Jensen of the Jenesis Group.

Prospective donors exacerbate this problem if they define their area of interest so narrowly that they end up with few organizations or initiatives on which they can sensibly make a big bet. “As we’ve increased the ambition of the work,” notes Edna McConnell Clark Foundation president Nancy Roob, “we’ve needed our partners’ help to expand what we’re willing to consider.”

Even if the “right” social-change organization does exist, a fully developed opportunity for large-scale action may not.

Among social-change nonprofits, donors often have to roll up their sleeves and get deep into the design of something that can achieve meaningful results. These realities put a premium on genuine collaboration between donor and nonprofit.

Lack of personal relationships.

Whether in the nonprofit world or in business, serious deals often hinge on personal relationships and trust. Most major donors emphasize the importance of their confidence in a nonprofit organization’s leader. For institutional gifts, there is often a personal connection: the

donor went to that prominent university, was a patient at that respected hospital, or attends concerts or exhibits at that impressive cultural institution. Development officers know how to nurture those relationships into big gifts. On the social-change side, the strong donor attachment tends to be more to the issue—preventing hunger, helping kids succeed in school—and less often to an organization or its leader.

Barbara Picower of the JPB ­Foundation tries to get to know promising leaders over several years before she bets big on their work. She became a major supporter of the Harlem Children’s Zone only after meeting its founder Geoffrey Canada in a small office over sandwiches when the organization was still in its early stages, and deepening a relationship from there. The leaders of Teach For America, KIPP, City Year, and other nonprofits that have successfully secured big bets have typically found ways to build strong personal relationships with their donors. Youth Villages, a Memphis-based organization that has benefited many kids in the foster care system, has received multiple big bets, allowing it to grow from serving 40 children to more than 22,000, partly because its leader P ­ atrick Lawler aggressively courts mentors from the business world.

Diff iculties of measuring social change.

For institutional gifts, results are often easy to see: the new wing is completed, the concert hall opens, or you get to shake hands with that distinguished professor whose chair you endowed. With ­social-change bets, defining and measuring what a big gift is supposed to achieve can be one of the most challenging

Donors who want to achieve large social change often have to roll up their sleeves and get deep into program design.

Those who are not willing to put significant effort into campaign strategy may be ineffective.

WINTER 2016

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ideas aspects. It often takes years, sometimes decades, to see the full effects. Even then, attribution is difficult, given the multitude of factors that contribute to social change. ­Barbara Picower has noted these measurement challenges in her grantmaking: “We care a great deal about results, and it has taken a lot to get clear on the effects of our poverty-fighting investments. We have frequently made additional grants above our programmatic ones to support measurement and evaluation of these programs.”

Risking controversy. Generous donors can get lots of negative press if their grants aimed at societal improvement don’t succeed strongly. Consider the pummeling that Facebook CEO Mark Zuckerberg has received in the aftermath of his $100 million gift that aimed to improve teaching in the Newark ­public-school system. Though the funds achieved some clear educational benefits, including a recent study showing that the city’s charter schools had the second highest gains in student performance of any system in the country, opponents generated negative feelings on this particular big bet that are likely to stick.

In contrast, funding a new building or faculty chair typically brings nothing but praise. Naming rights are often a fringe benefit that offer donors prestige for generations. Reporting generally identifies top philanthropists just by how much they give—not by what they support or whether they took a risk.

A high bar for success. Joel Fleishman, who has administered and studied large grants to both higher education and social-change organizations, says that “donors expect a level of outcomes from a gift to social change that they simply do not in support of a cherished institution,” or in search of a business success, for that matter. One executive director who works for a driven, results-oriented donor mentions spending many months and dozens of phone calls refining a potential five-figure grant to a promising yet scrappy social-change organization.

The grant is much better because of 62

that work. As that diligent effort neared completion, though, a campaign at the donor’s alma mater required only one phone call to convince the donor to make a seven-figure gift. These double standards in levels of expectation and review have profound effects.

Underinvestment in foundation-laying.

We all want philanthropy to fund actual programs, not the mechanics of finding and structuring the deals themselves. Yet, for all the reasons above, it takes time and care to put effective social change into motion.

Donors need to be willing to put some resources into determining what issues are important to them, which leaders are most promising, the kind of initiatives that can really be effective, and how philanthropy can make a crucial difference. In a ­private-equity firm, a partner might do well by finding one great deal every two years. “Serious due diligence is one of the biggest missing ingredients in philanthropy today,” says Herb Sandler, who along with his wife, Marion, helped launch the nonprofit media organization ProPublica. Unwillingness to lay this kind of groundwork for success can be especially pointed where donors insist on lean teams and are not willing to put significant time themselves into planning effective action.

Finding organizations that are big-bet ready What will it take for donors to jump these barriers to making big bets on social change? Organizations that have been especially successful attracting big bets offer some lessons. We identified 28 “frequent flyers”—nonprofits that received four or more big bets from at least two different donors during our study period. These organizations represented only about 5 percent of the social-change b ­ ig-bet recipients, but accounted for nearly 30 percent of big-bet dollars. Their commonalities suggest some ways to find arenas and organizations that are ripe for big bets.

Give through intermediaries. Specialized intermediary organizations that PHILANTHROPY

collect and re-grant philanthropic funds made up 43 percent of our frequent flyers. An example is the Robin Hood ­Foundation, created in 1988 by a group of bold and results-oriented businessmen, and now New York City’s largest ­p overty-fighting organization. Donors to Robin Hood don’t have to conduct an extensive search for an organization that might be capable of using their gift effectively, figure out how such a deal might be structured, and create and track metrics that would tell them if their gift was making a difference. That’s what Robin Hood does for them. The group also invests in research to find the kind of solutions and groups that might be hard for individual donors to uncover on their own.

Invest in f ields with the capacities of strong institutions. Some social-change fields can more naturally mimic the attributes that make universities, hospitals, and the arts such big-bet magnets. And some gifts to major institutions may be specifically directed to ambitious social change.

Consider prior big-bet recipients. Naturally, one of the best ways to find an organization capable of handling a big bet is to look for those that have already absorbed one. The frequent flyers we interviewed consistently told us that landing one big bet is one of the best ways to attract more.

Get involved. During the six years when they were building up the KIPP network from its embryonic beginning, the Fishers visited every new KIPP school.

“For KIPP staff who have been with KIPP more than a year or two, there is a good chance they actually met Don,” recalled Barth at the time of F ­ isher’s death in 2009.

“He loved seeing our new schools and was thrilled with the increasing reach of our network.” KIPP and its schools and its teachers and its students were as tangible to Don and Doris Fisher as any research institute or museum wing. This not only gave them confidence to keep investing; it also gave KIPP the benefit of a lifetime of business experience. P

books

Shakespeare’s Savior Henry Folger made it his life’s work to gather up scattered British treasure and bring it to America for conservation

BY ALG IS VAL I UN A S

Nowhere is the significance of Shakespeare to ­America, and of America to Shakespeare's legacy, more vivid than in the Folger Shakespeare Library in ­Washington, D.C. Opened in 1932, just down the street from the Capitol and across from the Library of Congress, the library is the heroic product of Henry Folger, a top Standard Oil executive who became a nonpareil collector of ­Shakespeareana, and his wife, Emily, who was as devoted to the Bard as to her husband. Their story is told in The Millionaire and the Bard by Andrea Mays.

Mays is the biographer for whom Folger has been waiting nearly a posthumous century. She was inspired by her own reading in Folger’s exceedingly well-supplied library, which she ransacked from end to end, opening “box after box of documents, artifacts, engravings, and books.” Every Shakespeare scholar in the world knows the library, but surprisingly little is known of the man who built it. This ignorance struck Mays as a grave injustice, so she set out to tell the story of Henry Folger. He was an all-American world-beater in his chosen field and dedicated himself to making a fortune sufficient to satisfy a craving no one can really explain. He then amassed a literary trove whose richness thrilled him every day of his life and enabled him to erect a monument worthy of one of history’s greatest writers.

His was “a hoarder’s impulse,” Mays writes, “in search of a grand obsession.” But unlike many American stories of vast fortunes and obsessive consumption, Folger’s impulse to acquire ends ­happily—and gives us a treasure of texts that might otherwise have been lost.

For Shakespeare’s guiding spirit was essentially entrepreneurial, and the preservation of his plays was not a priority. Mays writes that he “never authorized the publication of any of his plays for two reasons.

First, it simply was not the custom. Dramas were meant to be seen, not read. Shakespeare and his fellow playwrights thought of themselves as entertainers, not literary paragons. They did not write for all time, but for their own.”

Moreover, Shakespeare could not have preserved his plays in print even had he wanted to: “playwrights,

The Millionaire and the Bard: Henry Folger’s Obsessive Hunt for Shakespeare’s First Folio

By Andrea Mays

WINTER 2016

Shakespeare included, did not own the rights to their plays. The idea of intellectual property was in its infancy in early modern England. For a fee of two to five pounds, a play’s author sold all commercial rights to the theater company that would produce it.” Although, as Mays points out, ­S hakespeare had a hand in several of the ­moneymaking aspects of theater life, he was not entitled to publish his own work.

Where modern bibliophilia has “fetishized an author’s original manuscripts,” in Shakespeare’s time the so-called foul papers were worth literally no more than the paper they were written on. Paper was hard to come by, and an autographed version of a timeless play might be recycled for just about any purpose. “Centuries ago, the pages of a disbound copy of the First Folio were once used in Spain to wrap fish,” Mays notes. Today, collectors fantasize about the marvels that could be concealed where no one has ever thought to look. “A single page written in Shakespeare’s hand might now fetch several million dollars,” she writes.

But Henry Folger did not dream of u ­ nearthing such a rarity; he went after the prizes he knew were available, and he was unrelenting in his pursuit, especially of copies of the First Folio of 1623. This was the first edition of Shakespeare’s collected plays, comprising 36 works, all the extant plays but Pericles.

Previously, his plays had been printed just one play per volume, not made for looks, nor made to last.

The folio, on the other hand, was an exemplar of publishing elegance and durability.

The First Folio was the brainchild of two shareholders in the leading actors’ troupe of the day, who had known the rarest vocational intimacy with Shakespeare, having acted in his plays under his instruction. These men cherished the memory of their colleague, who had died in 1616 at the age of 52, and they were determined to make his name triumph over the ravages of time. Their monumental task involved tracking down the several available versions of each play, from whatever odds and ends they could find of the original manuscripts. These odds and ends often presented an unintelligible thicket, and were justly called the foul papers. The scribe’s more readable handiwork, known as the fair copy, was often covered with a director’s chicken scratches. The actors’ copies contained full lines only for each particular character, to prevent opportunists from selling the entire 63

books script to another company. Most of these sources for the First Folio have disappeared.

Folger acquired 82 copies of the First Folio, each singular in some respect. He scooped up 1,400 copies of the Bard’s collected works in 9,700 volumes. On both fronts the F ­ olger Library outpaced every other library in the world. Folger took a particular pleasure in acquiring volumes that had been owned by literary and political eminences like Samuel Johnson, David Garrick, King George III, Queen Victoria, John Dryden, Sir Walter Scott, Percy Shelley, Samuel Coleridge, Walt Whitman, Edwin Booth, George Washington, John Adams, and Abraham Lincoln. He prided himself in his comprehensive knowledge of Shakespeareana. He once decided not to go through with the purchase of a volume supposedly owned by Lincoln, because when he perused the pages of Macbeth, the play that Lincoln is known to have returned to again and again, they were evidently untouched.

Francis Bacon earned a niche all his own, though Folger did not share the renegade belief that Bacon was the real Shakespeare. Books known to have been sources for Shakespeare were also collected. No fewer than 5,000 volumes were seized upon for their allusions to Shakespeare or his work. Prompt books owned by celebrated actors and some 250,000 playbills filled the vaults. A gifted amateur singer and organist, ­Folger ­g athered 1,000 volumes on Shakespeare and music, and he even extended the collection to period musical instruments.

The money to underwrite this vast project came from Henry Folger’s work as John ­Rockefeller’s right-hand man. He worked demonically hard to learn arcana of paraffin wax, kerosene refining, and petroleum greases, and rose impressively fast. After Standard Oil was cut up into pieces, Henry Folger became president of the ­S tandard Oil Company of New York in 1911, owning shares worth some $400 million in current dollars. Erasmus said, “When I have some money, I buy books; and if I have any left, I buy food.”

Henry Folger had money for books and food alike.

When he retired in 1928 he devoted himself to creating a library worthy to display them.

“A man like Henry Folger was more than a serious collector. He lived through his collection,” Mays writes. He dickered and haggled and sized up the vulnerabilities of potential sellers as a general in the field takes the measure of the enemy. Deploying his shrewdest business wiles, 64

he ­g athered up a treasure meant to outlast him ­forever, his true life’s work.

Joseph Adams, the first director of research at the Folger Shakespeare Library, spoke at its opening in 1932. In the “city of monuments” that Washington, D.C., had become, he said, three stood out “in size, dignity and beauty, conspicuous above the rest: the memorials to Washington, Lincoln, and Shakespeare.” These men are “the three great personal forces that have molded the political, the spiritual, and the intellectual life of our nation.”

Henry Folger did not live to see this opening.

But his legacy, the Folger Shakespeare Library, continues to stand, a haven for those who appreciate human excellence. One hopes that the names of Henry and Emily Folger will be remembered along with that of William Shakespeare.

Algis Valiunas is a literary journalist and a fellow at the Ethics and Public Policy Center.

{books in brief } The Prize: Who’s In Charge of America’s Schools?

B Y DALE R U SSAK O F F

Mark Zuckerberg and Priscilla Chan recently announced their ambitious plans to give 99 percent of their Facebook stock to an LLC that will make charitable contributions, engage in lobbying, and invest in for-profit businesses, all with charitable aims. The announcement inspired skepticism from some pundits, who used the couple’s $100 million grant to the Newark public-school system of several years previous to warn that even the best intentions can end in disappointment.

In her well-timed work The Prize, which takes an in-depth look at the battles in Newark over Zuckerberg’s gift, veteran journalist Dale Russakoff offers her analysis. Her title itself is a cynical reference to the patronage tradition and the purse-string wars, political muscle, and municipal dysfunction that afflicts the struggling Newark school district. She describes how Zuckerberg, with the support of Governor Chris Christie, ­­then-Newark-mayor (now Senator) Cory Booker, and tough superintendent Cami Anderson, hoped to remake the Newark schools into a national model for urban education. But even those savvy advocates ultimately failed to corral the grassroots support necessary to make lasting progress in a damaged and suspicious city.

PHILANTHROPY

When Zuckerberg decided to take the plunge into education philanthropy back in 2010, he went searching for a city in great need of an overhaul. Enter Cory Booker, whose charisma and reformist mindset greatly appealed to Zuckerberg.

It wasn’t long after Zuckerberg and Booker met one another at a dinner in Sun Valley that they, along with Christie, appeared with much fanfare on the "Oprah Winfrey Show" to announce a $100 million challenge grant that required matching funds.

Central to their vision was a new teacher's union contract, and a framework that would attract talented educators by recognizing merit over seniority. As part of this they knew they had to give school principals operational autonomy and real ability to control their staff. Zuckerberg wanted the contract to upend the system that rewarded longevity rather than results, and hoped the replacement could draw talented young instructors from far and wide. Each state official—Christie, Booker, and Anderson—had a demanding part to play if teacher accountability provisions within state law were going to be significantly bolstered, at the same time that union demands would need to be placated, while enough philanthropic dollars were drawn to the city to match Zuckerberg’s commitment.

Throughout the story, Russakoff highlights the disconnect between the optimistic picture Booker and Christie sketched for potential donors versus the reality in Newark’s neighborhoods, where chronically low-performing schools continued to be the norm. Even with the emergence of high-performing charter schools, and some briefly constructive union negotiations, a growing backlash was building within the community. Eventually this would burst to the surface in intractable union demands, parents angry that their local school might close, and eruptions from community militants who felt excluded from the deals.

Newark eventually achieved a new teacher contract with somewhat more accountability, but still lacking many of the reform items on Zuckerberg’s wish list, and with a huge price tag that came from paying off the union. Then the political muscle that is everywhere necessary to advance bold school reform evaporated. Booker moved on to his U.S. Senate seat, Christie pivoted to building his national profile and coping with political opponents, and Anderson was chased out by a new mayor who ran in open hostility to school change.

The Newark experience demonstrates the importance of having sturdy political support when ambitious social reforms are attempted, the dangers of community resistance, and the foolishness of undertaking titanic change before these tasks have been managed. Russakoff quotes Kaya Henderson, current schools chancellor in the District of Columbia and Michelle Rhee’s successor, saying that “movements that don’t include beneficiaries are doomed to fail.” Even the best-aimed reforms and richest philanthropy will flounder if the families who should benefit are reluctant or feel left out. —Pat Burke WINTER 2016

Sir John Templeton.

Roger Hertog.

Charles Koch.

Eli Broad.

John Walton.

Who’s the next exceptional philanthropist whose charitable work strengthens our free society?

The Philanthropy Roundtable is now accepting nominations for the 2016 William E. Simon Prize for Philanthropic Leadership.

To recommend a donor, e-mail esmethurst@ philanthropyroundtable.org between now and February 19.

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Annual Meeting 2015

The 24th Annual Meeting of The Philanthropy Roundtable was held October 15-16 in D ­ allas.

Keynote ­speakers included Purdue University president Mitch Daniels, Success Academy founder Eva Moskowitz, Institute for Justice president Chip Mellor, and Almanac of ­American P ­ hilanthropy creator Karl Zinsmeister. David ­ Weekley was awarded the William E. Simon Prize for ­Philanthropic Leadership during a special dinner.

Annual ­Meeting topics included philanthropy for public policy, enterpreneurship, STEM e­ ducation, and buildings.

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left to right: 1. Al Mueller, Excellence in Giving; Alex Velaj, Velaj Foundation 2. Margaret Miller, Dr. Phillips Foundation; Harvey Massey, Edyth Bush Charitable Foundation; Wendy Oliver and Charles Miller,

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Dr. Phillips Foundation 3. Dick Weekley, Weekley Development Company; Denis Calabrese, Laura and John Arnold Foundation 4. Claire Fiddian-Green, Richard M. Fairbanks Foundation 5. Jim Piereson, Janice Riddell, and Cindy Simon, William E. Simon Foundation; Bonnie and David

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Weekley, David Weekley Family

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Foundation; Sara Fay Snider, Bill Simon, and Amy Allred, William E. Simon

Brianna Dickson Photograpy

Foundation

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PHILANTHROPY

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left to right: 6. Dawn Bray and Judge Richard Bray, Beazley Foundation 7. Mary and Tom Cesario,

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Irvine Health Foundation 8. Gwen and

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Doug Vance, H. N. & Frances C. Berger Foundation 9. Brett Holaday, Bart Holaday, and Catherine Holaday, Dakota Foundation; Donn Weinberg, Harry and Jeanette Weinberg Foundation 10. Marcus Ruzek, Marcus Foundation 11. Konnie Boulter, Oxley Foundation; Steve Rasmussen, Foundation

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Brianna Dickson Photograpy

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AWC Family

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Creating a Hotspot for K-12 Innovation

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On October 28-29, over 150 school-reform philanthropists gathered in Chicago. Donors visited schools featuring personalized learning, and later experienced Chicago’s entrepreneurial spirit by hearing pitches from education startups. Speakers included Campbell Brown of the ­Seventy Four, Diana Rauner of the Ounce of Prevention Fund, and Stephanie Banchero of the Joyce F ­ oundation. Illinois G ­ overnor Bruce Rauner, a philanthropist turned state executive, described the challenges of creating lasting educational change through the political process.

Other conversations focused on new solutions for Catholic schools, advocacy efforts, early education, and litigation.

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left to right: 1. Steve Barney and Kristy Adams, Barney Family Foundation 2. Amy Park,

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Startup:Education 3. Jim Perry, Madison Dearborn Partners; Governor Bruce Rauner, State of Illinois 4. Deborah Quazzo, GSV Advisors; Edith Gummer, Ewing Marion Kauffman Foundation; Barton Dassinger, Chavez School 5. Beth Purvis, Illinois Secretary of Education; Noble Charter Schools

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ZW Photography Chicago

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Michael Milkie,

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PHILANTHROPY

I write a parenting column that runs in more than 200 newspapers across the country.

Kentucky tried to ban my column there because I’m not a Kentucky-licensed psychologist.

I fought back because Americans don’t tolerate censorship.

And I won.

I am IJ.

John Rosemond Charlotte, NC

www.IJ.org

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