Philanthropy and Inequality

Does Ford’s Announcement Signal a New Gospel of Wealth?

Editors’ Note: HistPhil co-editor Benjamin Soskis continues the Philanthropy & Inequality Forum with the below post.

One of the welcome, immediate consequences of the Ford Foundation’s recent announcement that it would focus its grant-making on eradicating inequality has been the flood of excellent writing on the subject of philanthropy and inequality that it has provoked—at HistPhil and elsewhere. I’ve offered some of my own thoughts on the topic in this month’s Chronicle of Philanthropy. Alas, the editorial is currently behind a pay-wall (yes, I do appreciate the irony), but I wanted to take the opportunity offered by this forum to expand further on some of the points I made and to delve even deeper into the history.

Sometimes commentators throw about parallels between the turn of the last century and this current “Gilded Age” rather promiscuously. But the echoes, in many of the recent assessments of Ford’s announcement, of Americans’ attempts in that earlier era to grapple with the relationship between philanthropy and the economic system from which it springs, are unmistakable. For instance, Anand Giridharadas’ remarks to the Aspen Institute’s Action Forum, heralded in a recent David Brook column, about how “the winners of our age” stick “Band-Aids” onto “the system that has privileged them,” substituting “generosity” for “justice,” could, with a few tweaks, have come straight from a Social Gospel sermon, or a stemwinder delivered by a Populist reformer.

In my Chronicle piece, I attempted to chart some of the major developments in the thinking about this relationship, and to reflect on whether Ford’s announcement might augur a critical shift in that regard. But it’s striking how securely the basic foundations of the discourse surrounding philanthropy and capitalism were grounded more than a century ago—much has changed since then, but the terms of the debate have stayed the same. A 1913 article in Harper’s magazine, prompted by John D. Rockefeller’s establishment of his own foundation, and titled “Mr. Rockefeller’s Dilemma,” announced them. “All wealthy men who go into philanthropy are more and more subject to the tug and pull of two huge forces, one of which tends to perpetuate the existing order of society, while the other tends to modify the present social system in the interests of the future.” The philanthropist must make a choice; he cannot give “without doing something either to confirm or to change the status quo.”

As I outline in my Chronicle piece—using Andrew Carnegie’s 1889 “Gospel of Wealth” as a touchstone—for most of the history of American philanthropy, givers have tended to select the first option. Philanthropy has served as a confirmation of the existing order of society—and has sought to extend its blessings to the marginalized (what Carnegie termed offering “ladders upon which the aspiring can rise”). Moreover, philanthropists have assumed that the tools, techniques and temperament that led to their accumulation of wealth can and must be applied to its redistribution; the Gilded Age givers were also, by their own regard, philanthro-capitalists. And this imperative provided, is it does now, a sort of stamp of legitimacy to those tools, techniques and temperament, making it difficult to sustain a philanthropy which calls them into question. More generally, because “the existing order of society,” which philanthropy tends to promote, is staked on a certain degree of inequality (and because philanthropy itself requires a certain concentration of wealth), it has infrequently chosen to focus on inequality as a central preoccupation. This is why William Jewett Tucker, whom I cite in the Chronicle piece, critiqued Carnegie’s essay as a “belated gospel,” since it was explicitly premised, in the steel magnate’s own words, on “a condition of affairs…which inevitably gives wealth to the few.” Following this logic, it might not make much sense to look to philanthropy to grapple with inequality in any comprehensive way. As one West Coast Episcopalian journal asked in 1905, if “the power of wealth” was “the great evil of modern times,” didn’t naming “the proper application of parts of that wealth” as a remedy carry with it a contradiction?

Some of the recent skeptical analysis surrounding Ford’s announcement has echoed these critiques and reservations. But the first Gilded Age featured a considerably broader range of conceptions of the possible relations between philanthropy and the prevailing economic order than the one outlined above, in part because that order had not yet secured full moral legitimacy with much of the population. In recent months, Ford seems to have tapped into some of those alternatives as well. As Alice O’Connor phrased it in her astute contribution to HistPhil, the most powerful of these is a notion of philanthropy serving as a “countervailing” force to the prevailing order.

Back then, of course, Americans would not have used that term (the nation would need to wait for the consensus political theorists of mid-century for “countervailence” to really catch on as an analytic tool). Their references were individualist and personal as much as structural and institutional. They often grappled with the question of the relationship between philanthropy and capitalism in the context of how to regard the giving of a particular philanthropist, who had won his fortune in ways deemed suspect by many within the polity. Back then, before a more robust federal regulatory system established clear cut lines between lawful and unlawful corporate practice, that category could contain most major philanthropists of the era. One line of thought held that a benefaction could only be considered legitimate, coming from a member of this class, if it was offered as a form of “restitution.” To secure such status required the philanthropist to express a measure of penitence, gauged not by words of contrition or by statements of benevolent intent but by a willingness to trouble the foundations of his own wealth. In other words, there has to be an element of real self-sacrifice to make philanthropy truly legitimate.

The turn-of-the-century radical revivalist B.F. Mills, for instance, insisted that he would only accept a gift from a philanthropist if it represented an authentic “change of heart,” signaled through a challenge to the corruptions of the prevailing economic system (in my Chronicle piece, I mention an example that would have met with Mills approval, the giving of Joseph Fels, a wealthy soap manufacturer who funded Henry George’s single-tax movement. Mills, for his part, mentioned as a model giver Samuel “Golden Rule” Jones, the progressive mayor of Toledo who supported many reform causes). Commentators also argued that giving as “restitution” needed to be directed largely to the benefit of those who suffered most from the economic system.

What those principles might mean today, how they might be reflected in the Ford Foundation’s attack on inequality, and what sort of light they might shine on the philanthropic sector’s more general engagement with the issue, are important, and unresolved, questions. And they lead to others. How much personal “self-sacrifice” should we demand of this age’s mega-donors? How should we balance the individualist orientation of that sacrifice against the commitment to push broader, structural reforms? How explicit and definite a disavowal of the current economic system is necessary to advance the cause of extirpating the roots of inequality? How direct should the redistribution be that philanthropy affects, from those on the top to those on the bottom of the wealth and income distribution?

I end my Chronicle piece with the hint of one possible answer to those questions that can be detected in Ford’s announcement, and which might herald what I call a new gospel of wealth for the twenty-first century, one with “philanthropy serving now as a wary, chastening, yet ultimately sympathetic redeemer of a wayward economic system.” We don’t yet have the specifics of what this gospel will look like in practice, but it will certainly be a difficult balancing act, as it was a century ago when Harper’s spelled out the choice confronting philanthropists between confirming or changing the status quo. We’ll be watching the sector closely for signs of what those choices might be. For today it’s not just Mr. Rockefeller’s dilemma. It’s our own as well.

-Benjamin Soskis

A co-editor of HistPhil, Benjamin Soskis is a fellow at the Center for Nonprofit Management, Philanthropy, and Policy at George Mason University, a frequent contributor to the Chronicle of Philanthropy, and a consultant for the Open Philanthropy Project, which is funded jointly by Good Ventures and GiveWell, and which has supported his work on this blog.

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