Abstract
Philanthropy is a growth industry in America today. Schools and programs focusing on the nonprofit sector are springing up in colleges and universities. The roles of public policy and tax law are debated. Researchers measure the sector’s impact on the economy. College students receive credit for volunteer activities. K-12 students start nonprofits and raise funds for local and international causes, often to build resumes for college.
Given the ubiquity of philanthropy in America and its importance to American culture and the American psyche, a new historical synthesis is long overdue. The last major appraisal was Robert H. Bremner’s American Philanthropy, published originally in 1960 and in expanded form in 1988, nearly a quarter century ago. The publication of Philanthropy in America: A History by the distinguished historian and Tocqueville scholar, Olivier Zunz, should be a welcome event.
Rather than to trace the history of American philanthropy from its colonial beginnings to the present day, Zunz focuses on “philanthropy’s contribution to American democracy” (p. ix). The title obviously references Alexis de Tocqueville (Democracy in America), whose observations on the importance and uniqueness of voluntary associations to American character and civic culture have been a touchstone for the nonprofit field.
The book is broad in scope and fast paced. It provides an overall framework but stops along the way to focus in-depth on examples of foundations, organizations, and programs that illustrate its main themes. The nine chapters are arranged chronologically, examining a key issue for philanthropy in each era, while also weaving the themes it develops across time periods. Zunz’s story of American philanthropy begins with Andrew Carnegie and other big-money donors, who used their industrial wealth to start large, general purpose foundations. Designed for the improvement of mankind, their foundations were based on capitalist, managerial, and scientific principles—not acts of “kindness as understood in Christianity” (p. 2). For Zunz, it is primarily a story of how American philanthropy was put to the service of secular, liberal, progressive causes—with a few notable exceptions.
In conjunction with big donor philanthropy, Zunz chronicles the rise of “mass philanthropy,” or charitable giving by donors of lesser means to nationally organized causes, such as the fight against tuberculosis and the Red Cross, and to locally based general purpose organizations, such as community chests and community foundations. Zunz characterizes the book as the “story of the convergence of big-money philanthropy and mass giving that has sustained civil society initiatives over a long twentieth-century” (p. 3).
Another theme developed is the creation of the legal, regulatory and public policy environment for philanthropy at the national level and how it affected American philanthropy over the course of the 20th century. He details what national public officials thought about philanthropy and its proper role; what American philanthropy was asked to do (or not do) for national policies and programs; and the restrictions placed on philanthropy.
Beginning with the creation of the charitable deduction after the federal income tax was enacted in the first part of the 20th century, Zunz explores President Hoover’s belief in the supremacy of private philanthropy to deal with social needs; the New Deal’s takeover of social programs to the exclusion of philanthropy; and today’s mixed public policy approach, fostered by Great Society programs, which uses philanthropy to deliver some of the national government’s priorities. A major piece of the story is the bargain the national government struck with the philanthropic and nonprofit sector in exchange for the charitable deduction, which stipulated that in carrying out its own mission and programs, the sector would not engage in political “action” that might challenge national government policies, restricting itself solely to political “education.”
In this extensive and intricate work, Zunz also focuses on the support structures created for the foundation and nonprofit sector; the unique challenges presented to foundations’ liberal priorities by the divisiveness of race and the North–South political divide; and the use of philanthropy by the political right in the last 30 years to counteract the more liberal foundation agendas.
Readers might be surprised to see how much of the book is concerned with American philanthropy outside the Unite States. Two of its nine chapters deal primarily with American philanthropy abroad. The first explores the uses to which American philanthropy was put during the cold war era. The concluding chapter deals with the role big foundations and big donors, like George Soros and Bill Gates, have played in projecting American values abroad. Mass philanthropy is not absent. It enters the international picture, in particular with the establishment of Israel in 1948, and more generally with the famine in Ethiopia in 1984. The external focus can be explained if one returns to the book’s main aim—to study the role philanthropy has played in American democracy—rather than what its title implies.
The book will be widely received given the importance of the topic. Unfortunately, there are numerous errors of fact, and misinterpretations resulting from those errors, that will limit its usefulness as an authoritative source of information. Part of the problem stems from the book’s reliance on secondary sources. Very little of the research is original, and some of the secondary sources are used uncritically.
One mischaracterization is the story of how Frederick Harris Goff conceived of the first community foundation, the Cleveland Foundation, as a “means of democratizing philanthropy” (p. 55). Zunz relied on the self-published 50th anniversary history of the Cleveland Foundation, a promotional piece written by a newspaperman, which contains invented quotes said to be drawn from Goff’s Walsh Commission testimony from 1915. If the original testimony had been consulted, Zunz would have found that Goff did not view the community foundation as “especially open to poor people.” He also did not “politically . . . [keep] away from [the large foundations].” In his testimony Goff (1915) praised the Rockefeller Foundation as “one of the greatest benefactions the world has ever had.” Goff had been a lawyer for Rockefeller interests in Ohio.
Another mischaracterization involves Zunz’s description of the venture philanthropy model, promoted by high-tech millionaires. It is not as stated “a concept [the venture philanthropists] never really defined.” Venture philanthropy is based on the work of Christine W. Letts, Kennedy School of Government, Harvard University, and is characterized by lessons learned from venture capitalism, including support for operating costs, high involvement with grantees through the provision of expertise and consulting services, and a detailed plan for continuing operations after grants end. It is not concerned with “no longer” managing endowments “conservatively but to maximize profits” (p. 284). Venture philanthropists’ use of the business term portfolio of investments, when referring to their grantees, may be the source of the confusion.
Zunz also wrongly states that the Council on Foundations was founded “in the 1950s in the aftermath of the Cox investigation” (p. 244). In fact, it was formed in 1949, originally as a support organization by and for community foundations. See Council website: www.cof.org These are only a few examples. Another issue is whether the book delivers on its promises. Initially, it sets up big donor philanthropy and mass philanthropy as coequal. However, the story of mass philanthropy pales in comparison with the big donors and their well-studied philanthropy, perhaps due to the lack of research in this area. Some important additions could have bolstered the mass philanthropy side of the equation. When discussing the landmark Tax Reform Act of 1969, the book mentions the excise tax placed on foundations, but pays no attention to the distinction made between private foundations and public charities—vehicles for mass philanthropy—such as the United Ways and community foundations, on which the excise tax was not levied. This differentiation helped spur mass philanthropy at the expense of private and family foundations in the period immediately following its enactment.
The emergence of living donors of modest means who want to be involved in their philanthropy is also overlooked, as is the explosive growth in donor advised funds, pioneered by public charities in the last 30 years. Directly related to this trend is the creation of the corporate charitable gift funds, such as those operated by Fidelity and Vanguard, which sought to benefit from investing charitable dollars. What does it say about mass philanthropy when an individual or family can set up their own minifoundation within another philanthropic entity—or that corporations see market potential in selling philanthropy products? These questions are unexplored.
In spite of its shortcomings, the story Zunz tells in Philanthropy in America: A History is important and highly informative. There will be a temptation to use it as a text in courses on American philanthropy to replace Bremner. The book is not well suited to this purpose for the reasons stated above.