Abstract
This essay provides the very first account of the historical size and scope of German philanthropy from the mid-19th century to the 1950s. Our historical-statistical analysis of various unpublished and published sources about associations, foundations, and endowments supports an interpretation that suggest that foundations and endowments were important sources of financing for many public institutions in Germany. Our article dispels, thus, commonly held notions about the marginal position of philanthropy in German society and further suggests that philanthropy should be acknowledged as an important source for organizing and structuring modern German society.
Keywords
Over the past 30 years, studies about philanthropy in German society have tremendously increased, emphasizing in particular its role in Wilhelmine society. Out of the philanthropic acts studied, historians have given closer attention to the creation of endowments and foundations, as these are better documented than donations and collection drives. Beginning with studies about the Emperor Wilhelm Society (Burchardt, 1975; Vierhaus & vom Brocke, 1990), scholars have since moved on to research the roles of individual Germans and voluntary associations in the financing of museums (Gaehtgens & Schieder, 1998; Kocka & Frey, 1998), high schools (Flöter & Ritzi, 2007), universities (Adam, 2008; Ebneth, 1994), libraries (Krause & Jammers, 2009; Rischbieter, 2004; Vodoseck, Black, & Hoare, 2004), the provision of aid to the poor (Ludwig, 2005; Pielhoff, 1999), and various other elements of modern society (Adam, Frey, & Graf Strachwitz, 2009; Kirchgässner & Becht, 1997). Moreover, comparative studies have dispelled Manuel Frey’s notion of Mäzenatentum, a supposedly unique German model of philanthropy that was characterized by close collaboration between state and philanthropists (Adam, 2004, 2009a; Adam, Lässig, & Lingelbach, 2009; Frey, 1999; Liedtke, 1998). In recent philanthropy studies, German citizens appear as self-reliant individuals who voluntarily contribute their financial resources to public purposes, either during their lifetime or on their death, and shape society according to their visions. While not every wealthy citizen felt compelled to donate money to philanthropic institutions, philanthropy became an essential strategy for established and new local elites to exercise power over their community and shape the public sphere. While scholars of philanthropy have long known this truth, mainstream German historians still claim that German 19th- to early-20th-century society was a state-centered society rather than a civil society.
Since the 1950s, German historians have produced histories that disregard the role of philanthropy and civil society. The experience of Nazism led them on a search for the roots of German society’s failed “modernization.” Thus, they quickly concluded that Germany had a weak civil society or completely lacked civil society. German society’s marginalization of philanthropy after 1945, combined with its increasingly state-centered model of modern society, further promoted the attitude that philanthropy was a nonexistent or remnant part of premodern society. Therefore, scholars of medieval and early modern history were left to research philanthropy, while modern historians focused on state rather than private action. Only in the 1980s at the University of Bielefeld, in the context of research into the bourgeois classes, did some German historians begin to recognize that 19th-century German society did in fact have wealthy citizens that played a significant philanthropic role and shaped society according to their visions, either in collaboration or in conflict with the state. As inspired by this research, German philanthropy finally received its due recognition.
By following the growth of philanthropy from the mid-19th century to the 1950s, this essay aims to dispel previously held assumptions about the marginal position of philanthropy in German society and further suggests that philanthropy should be acknowledged as an important source for organizing and structuring modern German society. To this end, this article presents an evaluation of previously neglected and unknown statistical data; these include compilations of statistics mined from contemporary publications, whose information until now has not been evaluated. While we cannot produce comprehensive national statistics, the available information from Prussia (1865), Bavaria (1901), and East Germany (1953) seems to support an interpretation that foundations and endowments were important sources of financing for many public institutions in Germany.
The documents analyzed for this article come from three very distinct sources. The data for Prussia are gathered from a book about civil society published by R. F. Rauer in 1866. This publication simply contains a list of all associations, foundations, and endowments in existence in Prussia at that time. The data presented here are based on our quantitative analysis of this text. By contrast, the data about philanthropy in Bavaria were gathered, analyzed, and categorized by the statistical office of its state government, which already grouped the foundations and endowments into the three categories: religious, educational, and general foundations. For both sources, the raw data for statistics are unfortunately no longer available. Furthermore, the authors of the Bavarian survey of philanthropy neither elaborated on their method nor provided definitions of what they considered a “religious” or “general” foundation. Finally, the data for East Germany, our third case study, are derived from a quantitative analysis of the raw materials still available in the German National Archives in Berlin. With the help of students, we were able to study the questionnaires sent out by the East German authorities and quantify the information provided in these standardized forms. As some questionnaires are missing or incomplete, specifically concerning the indicated amounts of assets and the income of the foundations, the data presented in Tables 6 to 10 represent only a low estimate of the extent of East German philanthropy in the early 1950s.
Due to the different purpose, methodology, and nature of these statistical surveys and our varied analysis of their data, we created different labels and categories that allowed for quite limited comparisons over time. Furthermore, German law distinguished between independent foundations and dependent foundations. While independent foundations were created with boards of trustees and operated as self-reliant economic institutions guided by their founding documents, dependent foundations were entrusted to communal and state agencies that administered the capital as well as the distribution of the interest according to the wishes of the founder. For simplicity, we will use the term foundation for “independent foundation” and endowment for “dependent foundation.”
Gathering Information About Philanthropy in Bavaria and Prussia Before World War I
Few attempts have been made to provide overviews and statistical surveys of philanthropic activities in individual German states such as Bavaria, in individual cities such as Leipzig and Stuttgart (Geffcken & Tykocinski, 1905; Stuttgarter Stiftungshandbuch, 1913), and in particular fields such as foundations for university education (Baumgart, 1885). These collections of data were often organized and financed by private individuals, who used the collections as handbooks to support their philanthropic goals. Some publications provided information about philanthropy in a particular city; these Stiftungsbücher (books that listed foundations and endowments) also served as a sign of community pride and accomplishment. Common to all these attempts at collecting data about the philanthropic sector is that they included information on foundations, endowments, and in some cases associations, but they did not include nonprofit corporations (philanthropy and 5% model). As our study relies on these sources, it was necessary to limit our analysis to these three forms of philanthropic activity: foundations, endowments, and associations. However, we do not intend to suggest that philanthropy consisted of only these three forms of organization.
The state of Bavaria is the lone exception when it comes to the collection of statistical information about philanthropy. Bavaria was the only German state that kept continuous statistics about foundations within its territory from 1888 to 1914. Its statistical journal annually published statistical information about Bavarian philanthropy. According to these surveys, Bavaria could boast 19,600 foundations with assets (in landholdings, buildings, stock and bond investments, and savings accounts) totaling to nearly 550 million marks by 1901. This total proves to be quite remarkable given that, at the same time, the federal German pension fund’s assets invested in bonds and railway stocks totaled to only 367 million marks (“Statistisches Jahrbuch,” 1902, p. 197).
Table 1 gives insight into the character of Bavarian philanthropy. As most studies about giving in Germany have focused on big cities and urban elites as actors of philanthropy, scholars have perceived philanthropy as an exclusively urban phenomenon. However, Bavaria shows that 83% of its foundations were formed in towns and villages with populations of less than 5,000 people. The two big cities of Munich and Nuremberg together were home to only 4% of all Bavarian foundations. The remaining 13% of foundations were located in towns and cities of 5,000 to 100,000 people. Nevertheless, this imbalance in the number of foundations between rural and urban regions is more than made up for by the distribution of the assets owned by these foundations. At the time, 45% of the total assets belonged to the 10% of foundations located in cities with more than 20,000 inhabitants. Therefore, while the rich Bavarian foundations were a big city phenomenon, most foundations existed outside the big cities. Philanthropy was essential not only to city life but also to life in small towns and even villages. It was not only important for the founding and maintaining of big-city art galleries, but it also provided the basis for small-town institutions, from the provision of care to the village poor to the funding of high schools in school districts and of medical services in rural areas.
Foundations in Bavaria as of 1901.
Source. The data in Table 1 come from Statistischen Bureaus (1904, p. 477).
In the case of Prussia, we were able to extract statistical data about philanthropy from R. F. Rauer’s book about the state’s foundations and associations as of 1866. In that year, Prussia’s philanthropic sector was worth about 130 million marks. This amount was about 4 times greater than the taxes collected by the state from real estate owners across the country (about 30 million marks; Schimmelfennig, 1884).
Table 2 directs our attention to another characteristic of philanthropy in the German states: their regional diversity. Of the German states, Prussia was by far the largest—in territory and in people—and incorporated regions that had been independent German states before their annexation. These territories brought with them different philanthropic cultures and traditions. The unequal distribution of foundations among Prussia’s various provinces suggests that philanthropy was an urban phenomenon in this state, dissimilar to Bavarian philanthropy. The bulk of Prussian foundations and associations were found in regions that were highly urbanized and increasingly industrialized, such as Brandenburg, the Rhineland, Saxony, and Silesia. Philanthropic funds were provided for the rich museums of the Rhineland and of Berlin. Additional funds went into the creation of scholarships at prestigious high schools such as the Graue Kloster in Berlin. However, sparsely populated rural provinces such as Posen, Pomerania, and West-Prussia possessed a significantly lower portion of foundations. The same holds true for associations (Vereine; Menninger, 1998a; Nitsch, 1999). As associations relied on high concentrations of population, they unsurprisingly were a phenomenon mostly found in big cities. While associations involved high numbers of participants, they controlled much smaller financial assets: Only one quarter of the philanthropic sector’s total assets were accumulated in associations.
Philanthropy in Prussia as of 1865.
Source. The data in Table 2 come from a statistical analysis of Rauer (1866).
The Bavarian and Prussian cases, as well as data from the city of Leipzig, further provide important information about the age and longevity of foundations (see Table 3).
The Age of Bavarian Foundations (in 1901).
Source. The data in Table 3 come from Statistischen Bureaus (1904, p. 480).
As the Bavarian case shows, many foundations had a long history and survived major political and territorial changes. While the Protestant Reformation, the Thirty Years’ War, and the Napoleonic Wars had bankrupted and destroyed many foundations, quite a few foundations survived these catastrophes and recovered lost revenue in times of economic prosperity. Foundations that had invested their assets in property and land generally had an advantage over foundations that relied on income from investments. However, before the arrival of stock exchanges and stockholder companies, most financial assets were invested in mortgages and loans that were secured by landholdings.
These statistics also highlight the significant growth of foundations and the expansion of philanthropic activities throughout the 19th century. More than half of all Bavarian foundations were created between 1801 and 1900—a period of economic expansion and tremendous wealth creation. However, foundations did not solely increase in number. Foundations created during the 19th century often came with enormous assets, as the additional example of Leipzig, Saxony, makes clear.
Table 4 clearly shows the increase in assets given to foundations from 1500 to 1902. The authors of the Stiftungsbuch der Stadt Leipzig took into account inflation as well as increases in value of assets; they calculated the value of endowments at the moment of their founding, in the currency and value of their time (Geffcken & Tykocinski, 1905). An astonishing trend is the dramatic increase in the last quarter of the 19th century. During these 25 years, more money was given to philanthropic institutions than in the previous 475 years. This increase in funding was not due to an increase in the number of foundations. In fact, the last quarter of the 19th century saw fewer foundations, but they were richer. About 43% of the 16.6 million marks donated to foundations from 1876 to 1902 came from just four individuals: Karl Philip Tauchnitz (4.6 million), Herrmann Julius Meyer (4.1 million), Franz Dominic Grassi (2.3 million), and Karl Ferdinand Rohde (1.3 million; Adam, 2009a; Geffcken & Tykocinski, 1905; Menninger, 1998b).
The Age of Foundations in Leipzig as of 1905.
Source. The data for Table 4 come from Geffcken and Tykocinski (1905, p. XLIV).
Much of Leipzig’s cultural and social infrastructure—from its university to its museums, public parks, and social housing—was funded by philanthropy and not by the state. Yet Leipzig was no exception. German cities relied heavily on private funds for transforming themselves from medieval towns into modern metropolises, which could offer cultural entertainment for the rich as well as social services for the economically disadvantaged.
In the Prussian case, moreover, Rauer’s book allows for an analysis of the age and longevity of foundations and associations in the state’s different provinces. Table 5 shows that about 50% of the Prussian foundations were created in the short period of 50 years between 1815 and 1865.
The Age of Prussian Foundations and Associations (1865).
Source. The data in Table 5 come from a statistical analysis of Rauer, 1866.
The statistical information from the cases of Bavaria, Prussia, and the city of Leipzig allows us to hypothesize about general aspects of philanthropy in the German states between the middle of the 19th century and 1914. While a few foundations existed for several centuries, dating back to the Middle Ages, the majority of foundations were created during the 19th century as a result of wealth created by industrialization. Furthermore, the information for Bavaria and Prussia highlights strong regional differences with regard to the urban and rural context for foundations and the significance of religion. Most Bavarian foundations were created in a rural environment, while Prussian foundations resulted from urban elites’ activities. The dominance of religious foundations in Bavaria further differentiates the regional philanthropic cultures. In Bavaria, state authorities counted religious foundations as a separate category. Although these government statistics did not provide a definition of what was considered a religious foundation, such foundations could have been characterized as religious due to their purpose or the institution (church) in charge of their administration. In the latter case, however, some foundations could have been labeled “religious” in Bavaria yet were considered simply charities in other German states, thus distorting the statistic. While religious foundations in Bavaria were numerous, they were quite poor compared with secular charities and foundations for education. In 1901, charitable foundations had average assets of 41,755 marks, with foundations for educational purposes possessing average assets of 27,044 marks. By contrast, religious foundations had average assets of only 18,527 marks. These assets, however, tell us little about the money accrued and spent on the foundations’ original purposes. The income on land and the interest produced by stocks and bonds fluctuated greatly over time and differed from region to region. The authors of the Stiftungsbuch der Stadt Leipzig give interest rates on money for the northeastern region of Saxony to be 10% in the 14th century, 7% in the 15th century, and 3.5% in the 19th century (Geffcken & Tykocinski, 1905). The scholarship funds entrusted to the University at Freiburg, which comprised of a cumulative endowment of 1.3 million marks in 1908, produced an income of roughly 58,500 marks (=4.5%) in that year (Adam, 2008). The most peculiar, but not specifically German, types of foundation were the ones created with a very small amount of money and charged with accumulating interest for decades or even centuries before they could become active. One such example was Petermann’s Foundation, created in 1824 by a court servant of the same name with just 25 Thaler in Wangerin (Pomerania). The donor determined that all interest on the 25 Thaler was to be added to the assets until the year 2016, when it was predicted to have grown to 102,400 Thaler. Only at that point was the foundation to begin spending its income on charitable purposes (Rauer, 1866).
No statistical information exists that gives the numbers of foundations versus endowments created during the 19th century. However, anecdotal evidence suggests that German donors favored endowments over foundations. In the case of the city of Leipzig, for instance, about 75% of all philanthropic assets—which by 1905 totaled to 38 million marks—were entrusted to endowments administered by the city government rather than to foundations with their own boards of trustees (Geffcken & Tykocinski, 1905). Furthermore, it was quite popular to entrust endowments to state and municipal-run high schools, universities, libraries, and local municipalities. To 19th-century donors, the advantages of endowments were obvious. First, the donors believed that these institutions had a good chance of longevity—probably lasting for centuries. Thus, their endowments would continue to exist and their fate would be protected by the institutions, which were expected to have a self-interest in the preservation of these gifts. Second, these endowments did not require much money. Endowments of this type could be set up with just 3,000 marks—a comparatively modest amount, given that the annual income of a trained worker at the time stood at 1,000 to 1,500 marks. Even such small amounts secured the donor a prominent position in society, since these institutions listed their donors in annual reports, named funds after them, and provided public acknowledgments of the gifts. Third, such arrangements often allowed the donor to use the services of the institution to which the donor entrusted the endowment, giving the institution control over the administration and execution of the donor’s last will. Donors often left in their wills large amounts of money to universities and high schools. They determined that the income from these endowments first had to pay for the surviving spouse or children until their death; only thereafter was the institution to embark on the charitable mission designated by the donor. Such arrangements were advantageous to both sides. The donor did not have to worry about the financial situation of his surviving spouse, and the institution could expect to receive significant financial gifts from wealthy patrons (Adam, 2008). Last, with regard to donors’ power over their gifts and ensuing usage, endowments were legally not treated differently from foundations. In both cases, donors could impose their will and make sure that the foundation/endowment was used according to their intentions.
Thus, the relationship between donors and the state was characterized by a rather pragmatic attitude. Donors freely entrusted the municipality or the state with their endowments, as most individuals did not have sufficient funds to create a separate foundation. They also believed that the state would guarantee the longevity of their endowments by safeguarding the institution and its capital. Moreover, donors and the state believed that donors’ money should be invested as conservatively as possible and therefore in state bonds. However, this mutual decision unexpectedly led to the downfall of German philanthropy as a result of World War I. When the German government decided to finance the war largely through the selling of war bonds, endowments under the supervision of the state proved to be easy prey for the purveyors of these bonds. Germany’s defeat in the war, the devaluation of the bonds in the 1923 hyperinflation, and most importantly the government’s 1925 decision to reduce its domestic debt from 70 billion marks to 1.75 billion, by simply decreasing the value of war bonds to a mere 2.5% of their nominal value, all together basically expropriated endowments and foundations that had invested their assets in war bonds (Adam, 2009b).
Nevertheless, the financial crisis of the early 1920s was not, as often assumed, the end point of German philanthropy. Germans continued to give to foundations and to establish them. However, over the course of the 20th century, the attitude of German governments toward philanthropy changed fundamentally. Government inaction and disinterest in philanthropy of the 19th century gave way to state policies that limited and even destroyed philanthropy. The German Civil Code of 1900 contained regulations about the dissolution of foundations. The code’s Section 87 allowed state authorities to dissolve a foundation or endowment if it no longer could fulfill its mission as defined in its regulations or if it posed a threat to society. In the latter case, the state would thus seize all assets of the foundation/endowment, which then would either become state property or be given to institutions that had a similar mission to the failed foundation (Sections 87 and 46 of the German Civil Code). Legal expert on German philanthropy Hans Liermann acknowledged that this regulation was clearly not intended to protect foundations, but rather to give the state a legal-administrative tool against them, especially because the “threat to society” was never clearly defined and intentionally left vague (Liermann, 1963, p. 276). Until the end of World War I, this legal provision was of little consequence to German philanthropy. In the context of inflation and state interventionism, however, it took on a new and dangerous meaning. In 1924, probably as a reaction to the hyperinflation’s impact on philanthropy, the German parliament passed a far-reaching law that allowed government authorities to force foundations and endowments, especially those that had lost much of their assets due to the inflation, to merge with other foundations and endowments to form “mega-foundations” or “mega-endowments” (Sammelstiftungen). In the process of these mergers, foundations’ and endowments’ mission statements were altered to better fit them into the structure of the new mega-institutions (“Gesetz über Änderungen von Stiftungen,” 1924; Liermann, 1963).
The German Civil Code and the law of 1924 together provided the legal basis for the destruction of foundations and endowments—first by the Nazis in the 1930s, and then by the Communists in the 1950s. The Nazis had no general policy regarding foundations. While associations were banned after 1933, foundations did not attract too much of the new regime’s attention. However, the Nazis continued and even accelerated the process of merging financially dysfunctional endowments and foundations into mega-endowments and mega-foundations. While these new bodies turned into financially sound and effective institutions, thus recovering some of the losses caused by the hyperinflation of 1923, they were often far removed from the original intentions of their founders. By contrast, Jewish foundations, which represented about 5% of German foundations, were subject to expropriation. Only here did the Nazi regime become proactive, trying to identify all foundations and endowments created by Jewish citizens (Adam, 2008; Werner, 2011). This process was by no means fast-paced, as it continued into the 1940s. Because the Nazi regime showed little interest in collecting information about the scope of philanthropy in general, we move on in this study to the East German government’s treatment of philanthropy in the immediate aftermath of World War II.
Before the East German government developed a comprehensive policy toward philanthropy, it surveyed the philanthropic institutions of the five East German states and Berlin. This survey represents the most comprehensive collection of data about German philanthropy, at least for the territory of Eastern Germany. West Germany never produced a comparable survey.
The Fate of Philanthropy in East Germany
While hyperinflation had damaged foundations and endowments with assets in the form of state bonds but had spared those with assets in real estate and buildings, all philanthropic bodies were affected equally by World War II and the destruction of cities in air raids. In the aftermath of the war, Germany’s currency reform of 1948 and its division into two parts further accelerated the destruction of its rich philanthropic tradition. In East Germany, or formally known as the German Democratic Republic (GDR), foundations and endowments faced a political environment in which institutions of civil society were considered dangerous. In the course of the land reform of 1945, foundations and endowments that had been created by noble families became collateral damage because their large landholdings were expropriated and then distributed among farmers (Schwarz, 2008). This restructuring of East Germany’s economy and financial system impacted foundations that depended on the distribution of interest derived from their financial assets.
Nevertheless, a significant number of foundations and endowments survived the war and the hardships that came afterward. According to official estimates, about 2,500 foundations and at least 5,000 endowments were still active in East Germany after the war (Schreiben von Sorgenicht, 1952). Even so, foundations and endowments that had significant financial resources beyond government control were considered a grave danger by the new political and economic system. Thus, the GDR government searched for ways to limit and destroy philanthropic institutions using the provisions of the German Civil Code and the 1924 law regarding foundations (Schwarz, 2008).
As long as the traditional federal system remained in place, the five East German states—Brandenburg, Mecklenburg, Saxony, Saxony-Anhalt, and Thuringia—and the divided capital of Berlin all developed distinct strategies with regard to the place of philanthropy in society (Schwarz, 2008). In the case of Berlin, which was divided into four zones of occupation, the city government established a specific office for the supervision of philanthropy in 1945. This office was charged with the task of rewriting the statutes of foundations and endowments, attempting to erase all traces of the Nazi period from these documents as well as secure their revival (“Bericht über die beim Ministerium des Innern stattgefundene Besprechung,” 1952, p. 2).
Alternatively, the state government of Mecklenburg left decisions regarding the future of foundations entirely to its cities and towns. In a decree from September 1948, the state suggested three different avenues for the future of foundations. The first option for a foundation in financial distress was to declare bankruptcy. However, the government did not favor bankruptcy because all financial assets of the foundation would have been lost and no longer usable for the mission of the foundation or its successor institution. The second option was to merge various dysfunctional foundations into mega-foundations. Yet this option would not necessarily have improved the situation either, as even mega-foundations could continue to experience financial distress. The third option was to dissolve the foundation according to Section 87 of the German Civil Code, as the foundation was no longer capable of fulfilling its mission. The advantage of this third option was that the boards of trustees could decide which institution or state authority would receive the foundation’s assets. As such, the state clearly favored this third option as it secured the assets of foundations for the municipal and state governments (Abschrift, 1948).
By contrast, the government of Saxony developed a more interventionist policy early on. Immediately after the war, it systematically collected data about the scope of philanthropy within its territory. In 1948 and 1949, the Saxon legislature passed two laws about endowments. According to these laws, foundations and endowments that were militarist and fascist in character and that did not conform to the new political order were forced to merge into mega-endowments under the direct control of the state government in Dresden. The mega-endowments also absorbed foundations created by families for the benefit of their heirs as well as social welfare institutions created by factory owners for the benefit of their work force. The new mega-endowments then were administered by the ministries for education, labor, social welfare, and agriculture. Religious endowments, however, were exempted from this policy, because according to a Saxon law of 1874 and 1876, all religious endowments were considered subject to the Protestant Church and church law (“Bericht über die beim Ministerium des Innern stattgefundene Besprechung,” 1952, pp. 1-2).
After the dissolution of the five East German states in 1952 and the following centralization of political life in the GDR, the situation of East German foundations changed significantly. While the five states had previously been able to pursue distinct policies toward institutions of civil society, the newly formed 14 districts had no power concerning this issue. The fate of philanthropy was now decided entirely in East Berlin. While fears of nationalization were certainly not unfounded, such fears were never conclusively justified by the documents from the Ministry of the Interior. These surviving documents show that, by the early 1950s, no general consensus had been reached about the place of philanthropy in East German society. In May 1954, a high-ranking civil servant pointed out that not all foundations and endowments had to be dissolved. The official insisted that such dissolution could only occur if the requirements of Section 87 of the German Civil Code were fulfilled (meaning that the foundation/endowment was no longer able to fulfill its mission because of lack of funding or because it posed a threat to society; “Brief des Sekretärs,” 1955). Nevertheless, the East German government proves to have actively sought a means to securing close control of all nonstate actors.
As no statistical data existed, the East German government first needed to collect information about foundations and endowments within its territory, such as their number and their assets. For this purpose, the Ministry of the Interior developed a questionnaire that was distributed among foundations and institutions such as the Protestant Churches and city governments, which were in charge of administering endowments. This survey provided the basis for the GDR’s first national policy toward foundations, and it established a seemingly unified approach toward philanthropy. Although this approach was driven by a clear desire to limit the influence of philanthropy, all policies with regard to collecting information about foundations and endowments, their definition, and finally their dissolution were entirely based on existing law: the German Civil Code from 1900 and the law about foundations from 1924. As Hans Liermann (1963) reminds us, German laws have traditionally not served to philanthropy’s advantage. This reflects the Germans states’ attitude toward philanthropy: They took advantage of philanthropic institutions for funding public institutions, yet abused the investment of philanthropic assets in state bonds to finance World War I. Even so, the German states were not willing to support philanthropy or safeguard it against unwanted intrusion. This fact is confirmed by the devaluation of war bonds in 1925, which lifted the debt burden from the German government yet left the philanthropic sector vulnerable to the actions of the East German government in the 1950s.
The reliance of the East German government on Section 87 of the German Civil Code to dissolve foundations and endowments tied the hands of state officials; they first had to prove that a specific institution was no longer capable of fulfilling its mission before it could be dissolved or forced to merge with other institutions. Although many foundations and endowments had lost their assets and, thus, were no longer able to continue their work, many profitable foundations still existed such as Magdeburg’s Hospitals and Cloisters, which owned several retirement homes within the city of Magdeburg in Saxony-Anhalt that were fully functioning and provided much-needed social and cultural services. When Magdeburg’s city council, under pressure from the central government in East Berlin, decided in March 1955 to dissolve this foundation, residents of its retirement homes rose in resistance. They formed a committee and petitioned the President of the East German legislature Johannes Dieckmann to reconsider such a “foolish decision” (“Denkschrift,” 1955, p. 1). The five-page-long petition consisted of a brief description of the current situation of the foundation, which was followed by a long list of cultural, legal, political, and even economic reasons against the proposed closure. On the first page, the petitioners pointed out that this institution had been created for Magdeburg’s old people who had no means of support (meaning for members of the working class)—the very people in whose name the East German government claimed to act. Thus, to close an institution in a system that labeled itself a “dictatorship of the working class” was contradictory to public policies—a contradiction the petition writers consciously invoked to make their case.
As the Magdeburg’s Hospitals and Cloisters were, in contrast to many state-run social institutions, still profitable and provided much-appreciated social services without any state subsidies, this institution was far from meriting dissolution on the basis of Section 87 of the German Civil Code (“Denkschrift,” 1955, pp. 2-5). Nevertheless, the authorities closed it anyway. The buildings and assets (worth about nine million marks) were transferred to the city government, which turned the private retirement homes into a municipal institution (“Brief des Rates des Bezirkes Magdeburg,” 1954). The fate of this particular foundation reflects the fate of philanthropy in East Germany in general. Using the provisions of the German Civil Code and the 1924 law to their fullest extents, the East German government succeeded in completely restructuring philanthropic culture. Foundations and endowments did not completely disappear, but those that had lost most of their financial assets because of inflation, the war, and the concomitant destruction were dissolved and their remaining assets transferred to the state, as according to the 1924 law. Other financially healthy foundations and endowments were forced to merge into mega-institutions. The authorities in each district were authorized to create mega-foundations for various specific purposes such as health care, social welfare, and education. The majority of foundations and endowments in these districts were required to integrate into a mega-foundation according to its profile and mission; for example, all foundations and endowments in a given district that somehow provided health care services had to join the mega-foundation of that district for health care. In some cases, such as the case of care for the blind, countrywide mega-institutions were created, meaning that there was just one such mega-foundation for the care of the blind for the entire GDR (Abschrift, 1953). This countrywide foundation for the care of the blind emerged from the foundation for the care of the blind for the state of Saxony that had been formed in 1950 by the merger of various smaller foundations and endowments. The assets of this foundation were valued at about 1.3 million marks in 1955 (“Aktenvermerk,” 1955). However, religious endowments remained exempt from the pressure to merge with other endowments and foundations and were permitted to exist under the administration of the Protestant and Catholic churches.
The formation of mega-foundations offered a great advantage to the state for several reasons. First, pulling together these various assets provided the state with a significant amount of funding for specific fields of social welfare and provided relief to the state budget. Furthermore, the statutes of the foundations and endowments were abolished when they joined the mega-foundations, and the statutes of the newly formed mega-foundations were written by civil servants. The boards of trustees were filled with representatives of the state, and thus a large part of philanthropic culture—albeit not its entirety—was brought under direct state supervision. Despite the state’s intervention, philanthropy did not come to an end in East Germany. Even though many foundations and endowments were dissolved throughout the 1950s, a certain number indeed survived. The East German Civil Code of 1976 no longer recognized the legal instrument of “foundation,” but stated that existing foundations were subject to previously existing law (meaning the German Civil Code and the law of 1924; 1. Dessauer Stiftungsbuch, 2001, p. 61). A recent study of the fate of foundations in the county of Dessau in Saxony-Anhalt discovered that of 254 foundations still in existence within the border of that county in 1945, only 159 had been dissolved by the East German authorities. Thus, the remaining 95 foundations survived into the 1990s, at least theoretically as not much is known about their fate (1. Dessauer Stiftungsbuch, 2001).
Gathering Statistical Information About Philanthropy in East Germany After World War II
The desire to subject philanthropy to state control fueled an unprecedented and unique drive to conduct a survey of foundations—the most comprehensive and geographically far-reaching survey of its kind in German history. A statistical survey appeared to be essential for the authorities to clearly define philanthropy and to come up with decisions on its fate in a socialist society. However, this attempt quickly proved to be a challenge. The lack of reliable and complete data on the scope and size of philanthropy in East German municipalities became blatantly obvious. Furthermore, the East German authorities faced the same challenge encountered by all who attempt to produce a useful statistical survey of philanthropy: How does one distinguish between various fields of philanthropic activity? The East German officials settled for a grouping of foundations into religious, private, and state foundations. While we could not find clear-cut definitions for these three types of foundations in the files of the East German Ministry of the Interior, we recognized that all endowments and foundations entrusted to city and local governments as well as to universities were considered state foundations. All endowments and foundations in which the Protestant and Catholic Church had a stake were classified as religious foundations. All other foundations—such as foundations created for the benefit of families—were considered private foundations. Based on this classification, the East German authorities were able to collect the data that was used for the following statistical analysis. The data collected by the survey enabled us to reconstruct the distribution of foundations across the different regions of East Germany (see Table 6).
The Results of the East German Survey: The Number of Foundations as of 1953.
Note. The data in Tables 6 through 10 come from a statistical analysis of the questionnaires sent to foundations and stored in the Bundesarchiv.
The results of the East German survey mirror our statistical analysis of Prussian philanthropy from 1866. In both cases, we found significant regional differences. The rural districts of Frankfurt/Oder and Neubrandenburg were the home to only a small number of foundations, while the urbanized districts of Dresden, Erfurt, Halle, Leipzig, Magdeburg, and Rostock showed much higher numbers. These regional philanthropic cultures also differed by the dominance of certain types of foundations. State foundations dominated in the districts of Dresden and Halle, religious foundations in Schwerin, and private foundations in Erfurt and Magdeburg. Even though these differences may have resulted from arbitrary labeling and collecting of data at the local level, they more likely are, given the earlier results for Prussia, the result of centuries-old traditions of philanthropy in different local and regional settings. Court cities such as Dresden and Potsdam had been dominated by philanthropic activities of the ruling royal families, while bourgeois cities such as Erfurt and Magdeburg had been dominated by the philanthropic activities of urban bourgeois elites (Adam, 2007). These patterns were still visible in the second half of the 20th century (see Table 7).
The Results of the East German Survey: Foundations and Their Assets.
In 1953, East German foundations owned, according to our conservative estimate, a cumulative capital of about 155 million DM (Deutsche Mark). The combined savings of the East German population at the same time ran to 2.5 billion DM (“Statistisches Jahrbuch,” 1955, p. 250). Thus, the combined capital accumulated in endowments and foundations amounted to about 6% of East German savings. The unequal distribution of foundations across the East German districts is paralleled by an unequal distribution of their assets. The district of Leipzig proved to be home to the richest foundations with combined assets of nearly 34 million DM. The districts of Dresden, Erfurt, Halle, and Magdeburg followed closely. However, differences between rich and poor foundations were significant. The average assets of foundations in the district of Dresden ran to 99,430 DM while those of foundations in the district of Rostock amounted to only 16,237 DM.
Table 8 alerts us to another characteristic of German philanthropy. Most foundations were small in their financial commitment. Only 17 foundations within the territory of East Germany (which equals only 1%) were foundations with assets above 1 million marks (on founding). The overwhelming majority resulted from the donation of 1,000 to 100,000 marks (about 72%).
The Results of the East German Survey: The Founding Capital for Foundations.
The data from Table 9 confirm the findings of the earlier survey of philanthropy conducted by the Bavarian government in 1901 and the results from the statistical analysis of Rauer’s Preußisches Landbuch from 1866. A small segment of the philanthropic sector in East Germany (about 9% of all foundations) could trace its roots back to the period before the Thirty Years’ War and in some cases even to the Early Middle Ages. However, the majority of foundations (about 55%) were created in the time period from 1815 to 1918. In contrast to the other surveys presented earlier, this survey also provides data for the time after World War I and thus dispels the myth that philanthropy died with the hyperinflation of 1923. Nearly 25% of all East German foundations registered by the survey of 1953 were created in the period from 1919 to 1945. While 44 foundations for the time period after 1945 proves to be an extremely small number, it is evidence for the continuity of philanthropy as a social strategy even after such devastating events as World War II.
The Results of the East German Survey: The Age of East German Foundations.
The East German survey, in contrast to the other available surveys used in this article, also contains information with regard to the gender of the philanthropists. The results of this statistical analysis make clear that philanthropy has never been an exclusive resort for males alone. The data from this East German survey leads to the conclusion that between 20% and 30% of the philanthropists were female (see Table 10).
The Results of the East German Survey: Philanthropy and Gender.
The real surprise from this data rests with its little change over time. As early as in the 17th century, more than 20% of philanthropists were female. This number rose only slightly to about 28% for the period after the failed 1848-1849 revolution and to 30% for the period after World War I.
The East German survey points to another important characteristic of German philanthropy: 321 out of 1,893 foundations were not founded by individuals but by associations, businesses, religious groups, or organizations of various kinds. During the 19th century, businesses embraced philanthropic activities for various reasons. Krupp’s social welfare activities are well known. However, as Viola Effmert has recently shown, support for the arts became an essential business tool for marketing the services of banking firms such as Sal. Oppenheim jr. & Cie. (Effmert, 2006).
Conclusion
Over the course of the 19th and 20th centuries, Germans gave billions of marks to philanthropic institutions, endowing the philanthropic culture of their country with enormous riches. While 19th-century German governments did not care much about the growth of philanthropic giving, 20th-century governments severely limited philanthropy and even worked toward its destruction after hyperinflation. Therefore, philanthropy and civil society proved to be strongest in Germany during the time of authoritarian rule—the Wilhelmine Empire (1871-1918)—and not during the democratic systems of the Weimar Republic or post–World War II West Germany. This strange correlation between monarchical system and philanthropy is due to several factors. First, the Wilhelmine Empire was a time of great economic expansion and accumulation of incredible wealth among those who drove Germany’s industrialization. Germany became a rich country and many individuals used their newly acquired wealth to exchange it for social prestige through engagement in philanthropic activities. The limited involvement of the state in the funding of social, cultural, and educational institutions furthered individuals’ desire to provide funding for hospitals, museums, and research institutes. By contrast, the 1920s were characterized by an economic downturn and the destruction of private wealth in the hyperinflation. Both resulted in a decline of philanthropy. Post–World War II West Germany experienced a quick economic recovery (an economic miracle) and an immense growth of personal wealth, which could have resulted in a revival of philanthropy. However, the West German political system was founded on the belief that, in a modern society, the state had to assume responsibility for financing all aspects of public life. Philanthropy was considered outdated and thus marginalized in society.
Philanthropy did not collapse suddenly and was not, as often assumed, wiped out by hyperinflation. The single most important reason for the destruction of philanthropy in the course of World War I was the legal requirement that philanthropic funds had to be invested in state bonds. This requirement was intended as protection against the financial and economic uncertainty of free markets, yet it turned against philanthropy when Germany lost World War I and the German government decided to rid itself of its domestic debt by devaluating all war bonds. While inflation undoubtedly severely damaged foundations that relied on capital investments, it was the government’s decision that threw these foundations into an existential crisis, bankrupting many of them. Therefore, the decline and destruction of German philanthropy was less the result of financial crisis and more of the political decisions of the mid-1920s and later the mid-1950s in East Germany.
The statistical data from Bavaria, Prussia, and East Germany reveal general characteristics of philanthropy in Germany. Philanthropy emerged before unification in 1871 within the federal system of Germany. It also had significant differences from region to region and from state to state. While in Prussia philanthropy seemed to be an urban phenomenon, Bavaria possessed a significant number of foundations in small towns and villages. Even in Bavaria, cities were home to the richest foundations, but small foundations also had an impact on their environment. The statistics leave no doubt that Germany was a rich country with a large number of wealthy individuals—more than 16,000 millionaires were counted in 1913 (Vierhaus & vom Brocke, 1990)—who gave freely to social, cultural, and educational institutions. Consequently, Germany had a rich and diverse philanthropic landscape, which offered funding for projects independently from and sometimes in competition with the state. Despite its later political and economic challenges, philanthropy in Germany persisted, continuing into contemporary society.
Footnotes
Acknowledgements
We would like to thank the Fritz Thyssen Foundation for the generous support of our research project. We would also like to acknowledge the contributions of our two research assistants Stefanie Kumstel and Moritz Schulz to this project.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The research that resulted in this article was funded by a research grant from the Fritz Thyssen Foundation in Germany. The contributors did not receive direct financial support. The funds were used to pay for the two students who worked with the archival sources in the Bundesarchiv Berlin.
