A look into the open wallet

The hardest thing for anyone writing about philanthropy to fathom is motive. Why do people give away money? Are they driven by religious fervor, the urge to avoid taxation, guilt, noblesse oblige, a desire for immortality, a hidden agenda, narcissism, altruism or a psychopolitical admixture of some or all of the above? Do rich people, who seem to donate proportionately less of their wealth than others, give it away for different reasons than the poor or people of average means?

In “The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism,” Claire Gaudiani evades those questions, attributing all philanthropic activity to a single impulse: generosity. It’s a simplistic analysis, but so is her book, which struggles feebly and unconvincingly to prove that capitalism cannot exist in the absence of philanthropy -- a silly argument and one she needn’t have made. A paean to generosity would have sufficed.

While organized philanthropy and capitalism exist side by side in the same culture in some form of symbiosis and most philanthropic wealth derives from capital accumulation, it does not necessarily follow that capitalism cannot thrive without philanthropy. If capitalism has been assisted by philanthropists, and it has, it’s not because of their charitable leanings but because of a proactive investment of tax-sheltered wealth in the research institutions, programs, universities, think tanks and media outlets that support and sustain capitalism. To call million-dollar grants to Harvard Business School, the Weekly Standard or the Heritage Foundation “philanthropy,” or even true generosity, seems a bit of a stretch.

Could capitalism have thrived without such investments? It did, for centuries. But haunted by the specter of socialism, turn-of-the-century capitalists captured a major sector of organized philanthropy and turned it to their own protection. Thus it may be said that capitalism saved itself by exploiting philanthropy but not, as Gaudiani insists, that philanthropy saved capitalism or in some measurable way drove the American economy.

Kathleen McCarthy’s “American Creed: Philanthropy and the Rise of Civil Society 1700-1865” is a comparative tour de force. McCarthy, a professor of history at the City University of New York, chronicles a time when there were two democracies at work in America: a white male landowners’ electoral democracy and a philanthropic/activist civil democracy. The former dominated state and federal legislatures and worked hard to stifle the other democracy, which openly practiced “moral suasion in lieu of electioneering.” It was civil democracy, funded by small-scale private philanthropy and largely driven by women, that fueled the two great social movements of the 19th century -- the abolition of slavery and the struggle for women’s rights -- and that remains today in what is left of American civil society. It was a time when faith and generosity seemed inseparable -- when, as McCarthy describes it, “religion replaced republicanism as the deus ex machina of American civil society.”

The “creed” that McCarthy describes combines “faith in egalitarian ideas with religious freedom and the right to engage in civic activism,” all three of which had to be defended and reestablished in the reactionary antebellum era, when black social activists, white abolitionists, educational patrons and female labor reformers joined to define themselves as “philanthropists and lovers of equal rights.” We would be wise, in these remarkably counterprogressive times, to remember those people, the strength of their commitment, their energy and the vicious government-sponsored resistance they overcame.

Contemporary philanthropists and foundation trustees, who are largely reluctant to fund any organization that promotes advocacy or practices activism, will find inspiration in the generosity McCarthy describes of early 19th century philanthropists who at great personal risk supported the manumission of slaves, the abolition of slavery, African American civil rights and opposition to the genocidal “trail of tears” relocation of Native Americans from the Southeastern Colonies to desert reservations west of the Mississippi. It was a time when respected philanthropists such as Elijah Lovejoy and the Tappan brothers were true risk takers, as one by one they were literally dragged into the streets and either killed or beaten.

These two books arrive at a time when the very definition of philanthropy is being challenged by a new wave of donors far less courageous than their 19th century ancestors, who nonetheless describe themselves variously as “venture philanthropists,” “social entrepreneurs” or “players in the nonprofit capital market.” They should all read “American Creed” to be reminded of the traditional impulses and motives that inspired earlier American philanthropists, large and small, to use their money aggressively in the creation and defense of social justice.