David Goettler February 7 2011 03:42:01 PMThis article was written by Betsy Brill and appears in Forbes.com 01.27.11, 2:40 PM ET
It is standard practice at the start of a new year (and a new decade!) for thought leaders in every field--including philanthropy--to inundate publications with predictions of the emerging trends and "next practices" that will come into play in the year(s) ahead. Indeed, as professionals, we are forever racing forward, scrambling to stay current and to figure out what's next, so much so that we often forget to reflect on the past.
That's why I was thrilled to stumble over the reprint of a New York Times article from Jan. 1, 1911--one century ago--on the then-current state of American philanthropy. It opens by announcing that in 1910, $163,197,125 had been "given back to the people" in the form of charitable contributions by the country's wealthiest benefactors. The article offers rich--and at times surprising--insights into the philanthropy of yesteryear, reminding us of how far we've come but also how far we have left to go.
The most apparent difference between philanthropy in 1910 and 2010 is that a century ago, there was no charitable tax deduction. In fact, the Times reporter commends the most generous philanthropists of the day for being motivated not by "taxation or governmental regulation" but rather by "a desire to relieve and uplift the condition of those less fortunate than themselves." In today's heated debate over the future of the charitable tax deduction, we often forget that the great tradition of American philanthropy began long before the Revenue Act of 1917 made it possible for taxpayers to deduct charitable contributions from their federal income taxes.
Another difference between then and now is that whereas the Times reporter heaps effusive praise on America's wealthy, the media today are apt to portray a more discerning view of high-net-worth philanthropy. Rather than question the motivations behind philanthropists' gifts, the Times reporter takes for granted the altruistic spirit in which these gifts were made. And not once does he question what kind of impact these gifts might have on society.
However, one need only look at the controversy that Bill Gates and Warren Buffet have stirred with their Giving Pledge or the skepticism displayed in response to Mark Zuckerberg's $100 million gift to Newark public schools to see the critical eye with which we view present-day philanthropy. In 2011, unlike a century earlier, media coverage of major charitable gifts tend to include commentary on what philanthropists hope to accomplish with their gifts; social media forums then allow us to debate and discuss the virtues and limitations of particular gifts and to hold donors and charities alike accountable for the outcomes or "social return on investment" their gifts yield. In other words, today, we care not only that the wealthy give, but also about where and how they are contributing to society.
Despite the obvious progress we've made over the past 100 years, it‘s clear that some aspects of American philanthropy have remained relatively unchanged. For example, the list of institutions and organizations favored by the wealthy in 1910 looks as though it could have been published today. In 1910 the largest single gift of the year came in the form of a $10 million ($220 million in inflation-adjusted dollars) bequest to Princeton University. Indeed, almost every philanthropist noted in the Times article contributed a major gift to a college or university. Fast forward 100 years later and not only did 100% of the top five largest gifts in 2010 go to universities, but also over one-quarter of the year's 50 largest gifts went specifically to Princeton University.
Further, in 1910 the majority of total charitable dollars went to educational and religious institutions as well as to certain larger human service organizations (e.g., Salvation Army, the YMCA and the American Red Cross). In 2010, according to GivingUSA, an annual report on charitable giving, education and religion still receive the largest share of Americans' charitable dollars, followed by grantmaking foundations (of which just one existed in 1910) and human service organizations. Indeed, the wealthiest Americans of 2010 contributed to many of the same recipients as did their predecessors: art museums, parks, hospitals and churches.
According to the Chronicle of Philanthropy's online database of top contributors and their beneficiaries, only five of 2010's largest 300 gifts were directed to community service or public affairs organizations. Similarly, there were only a handful of gifts (mostly to orphanages and homes for the elderly) mentioned in the 1911 article that could be classified as "social service," and just one gift was targeted for policy and advocacy purposes; Olivia Sage, widow of financier and railroad executive Russell Sage, gave substantial funds to the women's suffrage movement.
"Very wealthy individuals," observes Pablo Eisenberg, senior fellow at the Georgetown Public Policy Institute, "give their biggest donations almost exclusively to universities and colleges, hospitals and medical centers, and arts institutions. They rarely make large gifts to social-service groups, grass-roots organizations, or nonprofit groups that focus on the poor or minorities. While a few wealthy people have made big gifts to advocacy or activist organizations, such donations are rare."
There is no doubt that America's most generous philanthropists should be commended for their charitable contributions to society. But we must not stop there. Rather, we must continue to question and to critique. To what extent has American philanthropy over the last century helped the most vulnerable people to help themselves? And how can we, as donors, do more to ensure that our philanthropy becomes more responsive to social needs?
What is apparent is that for all of our innovation and sophisticated discourse on the topic, we still have a long way to go in terms of responding to the neediest populations, i.e., the homeless, unemployed and hungry. This is not to say that the philanthropic landscape hasn't changed. In fact, from my experience as a philanthropic advisor to high-net-worth donors, I know there are contemporary philanthropists who are now more attuned than ever to social injustice. Indeed, many of my clients strive to become true partners with those working in the most vulnerable communities around the world on issues ranging from human rights abuses, environmental injustice and poverty eradication.
As we consider how to practice the "best" philanthropy in the years and decades to come, let's continue to take the time to revisit our past and to measure the impact that our philanthropic predecessors have had on the world today. One hundred years from now, I hope people will remark on the commitment 21st-century philanthropists will have made to invest in social change; not only by giving more, but by giving more meaningfully and more effectively.
Betsy Brill is founder and president of Strategic Philanthropy, Ltd., a philanthropic advising practice based in Chicago and serving clients worldwide.
- Comments