Friday, September 15, 2017

Problems with Philanthropy

To the Stars through Difficulties is a new book by Kansas author Romalyn Tilghman. I recently read Romalyn’s delightful novel and enjoyed hearing her discuss it on Wednesday afternoon.
The Case of Andrew Carnegie
The Carnegie libraries of Kansas are the backdrop of Tilghman’s novel. Early on she informs her readers that industrialist Andrew Carnegie (1835-1919) built 59 libraries in Kansas in the early 1900s and that “he gave the country 1689 libraries that served thirty-five million people by 1919.”
That is impressive philanthropy! And it is only part of what Carnegie did with his great wealth.
But on the same page Romalyn acknowledges Carnegie’s “despicable treatment of mineworkers, including the murder of seven men in his attempt to break up the union,” and reports that some Kansas communities “refused to take his tainted money even for the promise of a library.“
She then rightly states that Carnegie was “both a philanthropist and robber baron (p. 7).”  
The Case of John D. Rockefeller
Andrew Carnegie vied with John D. Rockefeller as being the richest man in the world. Like Carnegie, Rockefeller (1839-1937) also started life in rather humble circumstances but through hard work, ingenuity, and shrewd business deals he also became a man of great wealth.
From boyhood and throughout his lifetime Rockefeller was a faithful Baptist church member—and a tither. From his early 50s, he deliberately began his philanthropic activities.
A chapter in Ellen Greenman Coffey’s small book John D. Rockefeller is titled “The Pious Robber Baron.”
In a later chapter, “An Investment in Good Works,” Greenman tells of Rockefeller’s increasing involvement in giving his money away under the tutelage of Frederick T. Gates, a young Baptist minister whom he employed.
Among the many projects Gates (1853-1929) led his boss to support, one of the best-known is the Rockefeller Foundation, established in 1913 after years of planning.
Rockefeller’s philanthropic work, however, was partly in response to the negative publicity he had suffered from Ida Tarbell’s 1904 book, The History of the Standard Oil Company, in which she depicted Rockefeller as “miserly, money-grabbing, and viciously effective at monopolizing the oil trade.”  
The Case of Joan Kroc
Recently, June and I watched “Founder,” the 2016 movie about Ray Kroc, the man who built McDonald’s restaurants into the wealthiest fast food chain in the world—but not without the use of devious means.
Joan was Krok’s third wife. They married in 1969, when Ray was 67 years old, and she inherited his wealth after his death in 1984. Their story is told in Lisa Napoli’s 2016 book titled Ray & Joan: The Man Who Made the McDonald’s Fortune and the Woman Who Gave It All Away.
Joan’s $1.5 billion gift to Salvation Army is said to be the largest philanthropic gift ever made by an individual in the U.S. The bulk of that gift has been used to build and maintain 26 Kroc Centers throughout the country.  
Problems with Philanthropy
Very summarily, here are some problems with philanthropy, clearly seen in that of the three people mentioned above:
(1) There is a problem of how the wealth of the philanthropists is gained, particularly when it is by exploitation of workers and shrewd (bordering on illegal) business practices.
(2) Then, most philanthropists tend to aggrandize themselves in their charitable giving. Everyone knows of Carnegie libraries, the Rockefeller Foundation, and the Kroc centers.
(3) And then consider these insightful words by William Jewett Tucker, a contemporary critic of Carnegie:
I can conceive of no greater mistake, more disastrous in the end to religion if not to society, than of trying to make charity do the work of justice.


  1. The closing quote is also the closing quote in David Nasaw's Introduction to Carnegie's book "The 'Gospel of Wealth' Essays and Other Writings." The quote is by William Jewett Tucker, who later became president of Dartmouth University.

  2. Comments have been slow coming in today, but I was happy to have the following comments from former Kansan Eric Dollard:

    "Thanks, Leroy, for your astute observations about philanthropy.

    "My hometown of Manhattan, Kan., had a Carnegie Library, built in 1904. It was not replaced until about 1970 with a much larger, state-of-the-art facility, which has since been expanded. A library is a treasure, but one hates to think that any library has been funded on the backs of the working poor.

    "In 2010, Judy and I toured the 'Copper King Mansion' in Butte, Mont. It was built in the 1890s by William A Clark, who owned copper mines around Butte, along with other enterprises. Clark made enough money in just one afternoon to pay for the mansion, but his miners were barely paid enough to feed themselves and their families. Mark Twain called him a disgusting human being, so of course Clark went into politics and, despite a bribery scandal, was selected in 1901 for the U.S. Senate by the Montana legislature. He died in 1925 at the age of 86. He left his extensive art collection to the Corcoran Gallery in Washington, D.C.

    "Clark's youngest daughter was Huguette. She was born in 1906, when her father was 67, and died in May 2011 at the age of 104. She had once been married, but for less than a year; she had no children. Extremely reclusive, she left an estate estimated to be worth $500 million, over which legal battles are now being fought.

    "To become a billionaire, one must either underpay his or her workers or overcharge his or her customers, or both. Inheritance also works; it is important to choose one's parents wisely."

    1. Thanks for your comments, Eric.

      You appropriately mentioned inheritance, but it is interesting that Carnegie emphasized that “The man who dies rich, dies disgraced,” and he was in favor of a heavy estate tax to keep wealth from just passing to the wealthy person's children/grandchildren.

  3. In my business travels, I have used numerous Carnegie libraries. These are nothing to sneeze at. They did change the course of education for the United States, especially rural areas. However, Laissez-faire capitalism is by nature an economic structure of anarchy. Outcomes should be judged separate from methods, but the methods must be judged. The violent methods of communism, and even the deception of Alinskyism must all be weighed in the balance before their outcomes are evaluated. To say that the outcomes justify the means is an inexcusable injustice. And yet how often have I used the same rationale?

  4. Great insight Leroy in a controversy subject.
    i think the Bible is clear in this area when Jesus said we should Pray in private instead of how the Pharisees did and that they have already received their awards.
    They certainly shouldn't get credit and Good publicity IF their Wealth was gained by ill means, but I think the money could be used for Good Causes, maybe even to try and rectify how they obtained it.
    GOD will judge and let`s possibly let the money be used for the Good of humanity?
    John(Tim) Carr

    1. Thanks for your comments, John Tim.

      I think you are correct in suggesting that some people have given generously in an attempt to rectify how they obtained their wealth. That, I think, was mostly likely the case for Carnegie and Rockefeller particularly--and that was surely much better than not doing anything to help others with their wealth.

  5. Leroy's third point is often overlooked in discussions of philanthropy. The existence of charity is no excuse for a failure of government. Good government requires the resources to analyze and resolve systemic problems in society. Charity is to random and inconsistent to replace it. For example, consider cases frequently in the news where an appealing victim is highlighted, and funds are raised to help. But what about victims who for whatever reason are not so appealing? Can we assume a black woman whose home is destroyed in a flood will get the same consideration as a white woman who suffers the same fate? How can we be sure? What will be done to prevent the loss from repeating in the next flood? Charity can be a nimble actor, working on the missing links in social policy, but as the quote above says, we should not be "trying to make charity do the work of justice."

    As a current example, see this link at The Nation magazine:

    1. Thanks, Craig, for emphasizing the main point I was trying to make in my article; I am afraid some others were not as perceptive as you.

      Thanks, too, for the link to the article in The Nation; I hadn't seen it previously and thought it was quite good.

  6. Thinking Friend Greg Hadley is an American man who is a scholar and a professor at a university in Niigata, Japan. Here are his comments on the above article, posted here with his permission:

    "This was a very interesting essay on philanthropy. It highlights the problem of ‘boom-bust’ that results from neoliberal thinking. Boom-bust damages societies, because the costs of rebuilding after ‘bust’ rarely exceed the gains of the earlier ‘boom’. So too with the famous philanthropists. As you say, by ripping away the livelihood of millions, they give back generously to thousands.

    "Creating stable employment with fair wages so that more people can build up the society with small acts of daily generosity is the better course of action. The other way only increasingly destabilizes society, and makes the poor dependent upon the philanthropist.

    "A similar argument was made about aid agencies at a seminar that was held in Oxford while I was there. Many aid agencies, it was argued, do not adequately address the deeper issues causing poverty, and their work often gets in the way of real progress. It was a controversial seminar for sure."

    1. Thanks Greg, for the important points you made. I hope many of my readers will also read and think about what you said.

      With respect to Carnegie, though, some would probably say that the libraries he helped build was for the ongoing good of entire communities and that those philanthropic gifts were not just for a choice few.

      Still, the lingering question is whether there can be ethical justification for, as you say, "ripping away the livelihood of millions" and then giving back "generously to thousands."

  7. Here are some brief comments by Thinking Friend Bill Locke in Colorado:

    "Carnegie & Rockefeller, Homestead massacre & Ludlow massacre--Kroc's nefarious business practices, unaware of any massacres on his part.

    "I think it's OK to appreciate money going for good causes without praising the deplorable origins of it. Money is only money."

  8. So should the same thinking apply to these buildings as is used on Confederate monuments. Are the exploitive tactics of these philanthropists on the same par as those who advocated and advanced slavery? Some might say so, but I doubt there will be a rush to demolish the buildings their philanthropy made possible, especially since these buildings (in Carnegie's case, at least) were focused on community good.

    I'm not sure what's to be done about it Leroy, but I guess we need to know the facts and people can decide for themselves. It does seem clear that Millennials and Gen X-ers are certainly concerned about the issue you raised. This is evidenced by student protests on many university campuses where endowment portfolios are invested in questionable areas.

    Most of us are philanthropists on some our resources to help causes in need. I wonder if what motivates the spirit of philanthropy has much (anything) to do with how our resources were earned. Not to say we shouldn't care, but I'd love to hear more from people if they think practices on making money are connected to the motivation to give that money away. Thanks for a though-provoking conversation.

    1. Thanks, David, for your thoughtful comments.

      I don't think I would want to suggest there is a moral equivalence between a Carnegie library and a Robert E. Lee monument, but I think you are correct in saying that consideration has to be given to where money given for philanthropic causes comes from.

      It seemed quite clear to me as I was reading about Carnegie and Rockefeller that they both began serious philanthropic work either out of some feelings of guilt because of how they had made so much money or because of other people's criticism of the way they had earned their wealth--or a combination of those two motives.

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