Editors’ Note: Volker Berghahn continues HistPhil‘s book forum on German philanthropic history. Berghahn contributed to the edited volume, German Philanthropy in Transatlantic Perspective, which Gregory Witkowski introduced in yesterday’s post.
In his recent book, Philanthropy, Civil Society and the State in German History, Thomas Adam endeavors to correct several misperceptions that he found in the literature on this subject. His most important point is to highlight the thousand foundations that had been established before 1914 at a time when Imperial Germany had seen a most impressive rise in prosperity. Like in the United States, these were the decades when living standards rose and great fortunes were accumulated in industry, commerce and finance. This was a period when it was not just the state and the churches that tried to alleviate poverty, illness and other dark corners of modern Western societies. It was also a time when families who had come into wealth became involved in the “secularization of charity” (Oliver Schmidt) and gave money for the advancement of the general public good, cultural organizations, scientific research in the sciences, social sciences, humanities, and exploration overseas.
But then Germany started two world wars that were devastating for all participant nations and especially for Germany. The brief recovery of the mid-1920s and the revival of culture and the sciences, supported by those who had not lost their wealth in the hyperinflation of 1923 was destroyed once more first by the Great Depression and then by Hitler’s wars. When the Germans dug themselves out from under the rubble of their cities and, with American aid, began to reconstruct their economy, the 1950s saw an “economic miracle.” Wealth was once again being accumulated, but it was not a period of great philanthropic activity. The West German finance ministry was reluctant to offer tax advantages to those prepared to give. On the contrary, the 1952 Equalization of Burdens Law (Lastenausgleichsgesetz) imposed a long-term tax on those whose assets had survived the war. The revenue was redistributed to refugees, expellees, bombed-out families and other victims of Nazi policies. In addition, a church tax was levied on all tax-payers that enabled the churches to expand their own charitable programs.
Finally, while a few of the older “secular” philanthropic foundations resumed their activities after 1945, mention must be made of the American foundations and of the Ford and Rockefeller Foundations in particular. After the death of Henry Ford in 1947, his originally small philanthropic organization, based in Detroit, enjoyed a huge increase of its endowment thanks to the transfer into it of shares from the Ford Motor Corporation, making it the largest philanthropy in the world. Once it decided to spend some of its millions on a European program, West Germany also benefited from this largess, mainly in support of intellectual and academic ventures. For example, the foundation donated the Ford Building, a large lecture hall at the Free University in West Berlin, and helped the High School of Design at Ulm to get off the ground. Ford also funded visiting professorships, lecture tours of American academics, and intellectual magazines such as Der Monat. All these efforts were intended to foster democratic institutions and attitudes in post-Nazi West Germany, and by the late 1950s, there was a growing sense that these investments, made of course also against the background of the East-West conflict and the quest to contain communism, were paying off. The Federal Republic had turned the corner and had become a stable and dynamic country with a functioning parliamentary-democratic system.
It was at this point that John McCloy, the U.S. High Commissioner in West Germany from 1949 to 1952 and thereafter a trustee of the Ford Foundation, learned from a Dutch mediator that Alfried Krupp, the owner of the reconstituted Krupp heavy industrial empire in Essen, was thinking of establishing a philanthropic foundation. McCloy and his right-hand man at the Foundation, Shepard Stone, traveled to Essen to advise Krupp’s trusted board-member Bertolt Beitz on how to go about this. Especially intriguing is the argument that they made to help Krupp and Beitz make up their minds. Alfried Krupp had been convicted at the Nuremberg Trials of Industrialists as an accessory to Nazi crimes and had spent several years in prison until McCloy had pardoned him. As a result of the Krupp family’s collaboration with Hitler, its public image had been badly dented. McCloy and Stone now referred to the Rockefeller family and its poor reputation as one of the “robber barons” of the American years of pre-1914 prosperity. But then they had founded the Rockefeller Foundation and now the Rockefellers were widely revered in the U.S. for the good works that their foundation had done in subsequent decades. Clearly, the reputation of the Krupp family would also rise again if they now put their wealth into a foundation. And so the Krupp Foundation was established at about the same time as the Thyssen family next door in Duisburg was thinking of creating the Thyssen Foundation. It is perhaps telling of the competition that arose between the Krupps and Thyssens that Beitz remarked rather critically that the Thyssen Foundation was really more of a tax dodge.
At any rate, by the early 1960s, the discussion on private secular philanthropy in West Germany was in full swing. Older organizations, such as the Bosch Foundation, revived, and the Volkswagen Foundation was established as a semi-public association on whose board the federal state of Lower Saxony, the home of the Volkswagen Works, had a strong voice next to other trustees appointed on account of their recognition as private individuals.
The 1960s saw yet another initiative by the Americans at a time when the big foundations across the Atlantic had begun to shift their attention and programs towards the “Third World.” It is in this context that Stone raised the question of feeding the poor of the non-Western regions of the globe when in March 1960 he met Fritz Berg, the president of the powerful Federation of German Industry. He expressed the hope that Berg’s colleagues, including Hermann Abs, the influential chairman of Deutsche Bank, as well as economics minister Ludwig Erhard, would step up to the plate. Stone had learned that Abs admired the Ford Foundation’s efforts as a model for West Germany’s private sector and would be prepared to support the American food aid program. Stone also paid a visit to Heinrich Lὓbke, the president of the Federal Republic. While Lὓbke apparently mentioned to the development aid that the Bonn government was already giving, he also began to consider a private initiative. Learning about this, Abs got worried about too many cooks in the kitchen and tried to block Lὓbke’s forays, maintaining that they were poorly thought out. Moreover, the government bureaucracy also became alarmed and tried to stop the president, who had few powers under the West German constitution.
Of course, such rivalries between the public and the private sectors existed elsewhere, and it is more important to stress that subsequent decades witnessed another great expansion of private philanthropy in West Germany. As family wealth grew and parents decided not to leave everything to their children, they established many smaller endowments, next to the bigger ones that the Bertelsmanns or Henkels initiated. Those too small to have their own administration were quite happy to put their venture under the umbrella of the Deutsches Stiftungszentrum in Essen. This Center had the staff and expertise not only to administer endowments and to secure compliance with the elaborate laws and rules about associational life, but also to deal with the investment of the endowment in stocks and bonds to enhance the philanthropic capacities of the smaller foundations.
All in all, German philanthropic history is a fascinating field and scholarly research into it is slowly catching up with work done in the United States.
Volker Berghahn, Seth Low Professor of History at Columbia University, specializes in modern German history and European-American relations.