Philanthropy in America: A History

Published by EH.Net (January 2012)

Olivier Zunz, Philanthropy in America: A History. Princeton, NJ: Princeton University Press, 2011.? x + 381 pp. $30 (hardcover), ISBN: 978-0 691-12836-8.
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Reviewed for EH.Net by Donald E. Frey, Department of Economics, Wake Forest University (retired).

Olivier Zunz starts his history in the late 1800s, focusing on big foundations along with the ?mass philanthropy? of the middle class. A recurring theme is the enduring difficulty in defining the boundaries between government and philanthropy.?

The story that Zunz chooses to tell, though not comprehensive, is fascinating; and he tells it well. Chapter 1 recounts emerging dissatisfaction with traditional ?charity? in the late 1800s. But the real story is the forming of the first great foundations, which grandly and vaguely aimed for ?the improvement of mankind? (p. 8). This challenged legal doctrine that had defined charitable purposes very narrowly. Early foundations chose two major emphases: advancing science, which implied reshaping higher education; and improving the status of African-Americans in the U.S. South.
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The second chapter moves to popular ?mass philanthropy,? which was born in fighting diseases, such as TB (as early as 1908). World War I stimulated mass giving as patriotism provided a new motive. About this time, forerunners of the United Way emerged to consolidate charitable appeals and apply business-like, calculating methods to fundraising.
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Chapter 3 introduces the earliest difficulties of differentiating the roles of government and the roles of philanthropy. The issue was related to defining tax incentives for charitable giving. The chapter is too rich in detail to recount here.

Chapter 4 gives major attention to the career of Herbert Hoover, who found many ways to use private resources to solve public problems. However, his efforts to provide Depression relief only with private philanthropy were futile. Conversely, the New Deal mobilized government and tried to minimize the mixing of government and private activities. Zunz only lightly mentions the related ethical questions: Is disaster aid a fundamental human right, mandating government response to victims?? Or, is there no right to aid (exempting government and leaving victims to hope for charity)?? Apparently, this is still an open issue: in 2011 the U.S. House majority leader proposed denying federal aid to victims of Hurricane Irene. (The proposal was that disaster aid could be eliminated for budget-balancing purposes. Those who opposed the proposal presumably viewed aid as a right, and therefore not to be comprised so readily.)

Chapter 5 relates how, during and after World War II, ?philanthropic programs more than once became entangled in the ideological battles that pitted Washington against the Kremlin? (p. 137). The boundary between government and philanthropy blurred once again.? American charitable organizations operated in occupied areas, distributing publicly-funded supplies as aid, but also to influence opinion. And, post-war, American foundations waged cultural war against communism, supplemented by the CIA?s ?philanthropic organizations? (p. 151), which ultimately cast suspicion on all American foundations overseas. The same patterns played out in less developed countries although some private development groups exerted their independence from Cold War goals.?
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This chapter also discusses post-war private American aid to the state of Israel. When President Eisenhower distanced American policy and financial aid from support for Israel, the American Jewish community made up the difference, and more. Fundraising was accompanied by public-relations campaigns portraying Israel as the sole American ally in the Mideast; this prevailed and ultimately forced a change in U.S. policies. All this ?ventured beyond the humanitarian and economic incentives that had up-to-now bounded the partnership between philanthropy and government? (p. 168).
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Chapter 6 considers domestic philanthropy after World War II, when older foundations lapsed into a quiet period of seeking a new vision for their billions. The biggest development was the rise of conservative religious foundations and mass fundraising by evangelical organizations. Zunz concludes that ?the postwar effort to build a more Christian America thus rested on the convergence of big money and mass giving? (p. 199).
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Chapter 7 tells how major liberal foundations found a fresh focus in the civil rights movement of the 1960s. This raised the ire of Southern conservatives in Congress, who set out to limit foundations. They generally failed, but Congressional scrutiny did create tighter limits on political activism by foundations; and it did produce a requirement for foundations to spend at a rate exceeding five percent of their worth annually.? The era of civil rights activity also reversed the New Deal?s divorce of government and philanthropy.
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Chapter 8 relates how, by the 1970s, much government spending on social programs was directed through non-profit groups, some of which came to rely on government contracts for a large portion of their budgets. This created a number of knotty problems for the voluntary sector. How to maintain independence of action while taking government funding? How much can religious agencies mix religion with government-funded services in fulfilling contracts?? And so on. Again, defining boundaries between government and the non-profit sector is crucial.
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The chapter also discusses a series of Supreme Court decisions loosening restrictions on political advocacy by tax-exempt organizations.? This occurred because ?in violation of the tax laws, conservative philanthropies went on funding the political agenda that was transforming America [post-Reagan], and again, the Supreme Court supported them. The court implemented a significant relaxing of the lobbying rules? (p. 259).
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Chapter 9 focuses on recent international developments as non-government organizations wrested a measure of independence from governments ? starting with famine relief where donor governments responded in disjointed ways and recipient governments were corrupt. Foundations also began underwriting the work of indigenous non-government organizations, such as the micro-finance Grameen Bank. The Gates Foundation now routinely bypasses governments in the interest of taking more effective action, unencumbered by political constraints.
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Zunz concludes by deeming modern American philanthropy to be ?a product of the large organizational revolution that American managerial and financial capitalism orchestrated in the last century and a half? (p. 294). One can only hope Zunz does not view capitalism as the only factor in the emergence of American philanthropy.
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Overall, this is a book I would highly recommend, for what it does undertake. But I caution about its blind spots. First, had Zunz started his story earlier, he would not have ignored other factors that shaped philanthropy besides capitalism. Historians have written, without hyperbole, of the American Protestant ?benevolent empire? of the early 1800s, a loose term for religiously inspired organizations that started scores of colleges, supported anti-slavery organizations, advocated temperance, converted the un-churched frontier, operated Sunday schools (the only education for many), created a huge publishing industry for moral uplift, and launched a large foreign-missions effort, among other efforts. For their part, Roman Catholics created major educational and social service networks to serve their large urban, immigrant communities. This was all done before Zunz starts his story and clearly shaped American philanthropy. The Methodist admonition to ?earn all you can, save all you can, give all you can? surely influenced more Americans than Carnegie?s ?Gospel of Wealth? ever did. Yet, by the time Zunz picks up the story, religion is more a minor player than the lead actor. The na?ve reader might conclude from Zunz?s book that philanthropy sprang full-grown from rich entrepreneurs, who started foundations for no reason other than that they could.
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Even in the period his book does cover, Zunz ignores some significant topics, such as university endowments, many of which rival the largest foundations. And, university endowments present problems worth discussing, as when investment returns are largely reinvested rather than used to support the teaching and research goals of the universities. Another extended discussion that is missing is about the overall level of giving by Americans ? for it is important to a balanced picture of mass philanthropy. Finally, the rise of volunteering as an increasingly integral part of American philanthropy deserves more coverage. (Who can forget the images of Jimmy Carter working on Habitat projects?)
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Most of these criticisms could have been rendered moot simply by selecting a more modest title for the book ? one that accurately reflects its primary focus on foundations and big-time ?mass? philanthropy, and which is limited to a certain time frame. Within the limits of Zunz?s actual topic, this book merits high praise.

Donald E. Frey is the author of America?s Economic Moralists: A History of Rival Ethics and Economics (SUNY Press, 2009).

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