The current state of philanthropy in America.
January 1, 1998
in this forum:
Are Americans now more concerned with humanitarian and social philanthropy than ever before? Does America's generosity derive from some national benevolence or is it representative of a failure by our government to provide a social safety net for the underprivileged? With respect to Mr. Soros' and Mr. Turner's philanthropic undertakings, do you believe that there is a danger with such large scale donations? With all the attention given to Soros and Turner, it seems to me that the "little man", the average American, has been grossly overlooked. Has not the average American also been giving more? What do you believe can explain the recent upturn in philanthropic donations? New wealth? New spirituality? Alexander T. Gibbons of Madison, WI, asks:
As a nation, are Americans more generous than other Western countries? Does this generosity derive from some national benevolence or is it more representative of a failure by our government to provide a social safety net for the underprivileged?
Kathleen D. McCarthy, Director of the Center for the Study of Philanthropy, responds:With a few exceptions [such as Hungary, where private support supplies a slightly higher percentage of nonprofit revenues than in the U.S.], Americans are by far the most generous in their support of educational and charitable endeavors. Several factors account for this: an ethos of limited government; the lack of a fully developed welfare state; strong religious incentives to give and volunteer; an unparalleled record of economic expansion over the past two centuries; and an enduring ethos of "civic stewardship"-- the belief that people who prosper within a community have a moral obligation to reinvest at least some of their wealth in community betterment. As a result, local citizens — both rich and poor — historically have worked in tandem with their state and local governments to provide social and educational services that the government would not have been able to provide on its own.
On the other hand, it's important not to overemphasize the role of private giving in maintaining these services. All of the data we have so far suggest that nonprofit organizations — everything from charities to "private" colleges and museums — subsist on a mix of public and private support. This is as true in Italy, France, Germany and the United Kingdom as it is in the United States. Moreover, although the ratio of private support varies from one type of nonprofit organization to another, aside from cultural endeavors, most American nonprofits receive the bulk of their support either from government and/or fees for service, with philanthropic giving running third. In other words, government does provide a great deal of support for nonprofits — often far more than individual donors. This is why the government cutbacks over the past two decades have been so devastating. Private philanthropy has been unable to match the magnitude of the cuts, forcing many nonprofits to rely on increased fees and more aggressive marketing to maintain their operations — despite the magnitude of our national benevolence.
The Independent Sector responds:
As a nation, Americans are comparatively far more generous than all other nations--particularly across all socioeconomic levels. Independent Sector research indicates that in the United States giving has maintained a stable share of the nation's economy for three decades. With some slight fluctuations, charitable contributions have represented 2% of the Gross Domestic Product since 1966--the highest giving rate of any nation. (Two percent of the GDP is a large amount since giving would have to increase by more than $75 billion, or 50%, to reach 3% of the GDP). In comparison, in Canada and the United Kingdom, countries with similar infrastructures to the United States, charitable contributions were .72% of the GDP and .55% of the GDP respectively.
Why are Americans so generous? America has a strong tradition of giving as exemplified by the benevolence the Native Americans showed Christopher Columbus. Governor John Winthrop got the spirit of philanthropy off to a good start when he preached "a model of Christian charity" to Puritans bound for New England in 1630. John Harvard in 1638 was the first American to bequeath his library and half of his estate to a newly founded Harvard University in Cambridge, Massachusetts. In 1751, gifts from Benjamin Franklin, Thomas Bond and others established Pennsylvania Hospital, the first general hospital in the United States.
Until the nineteenth century charity primarily involved providing aid for basic support directly to poor individuals. But when the Industrial Revolution and the subsequent population migrations from rural to urban areas created new social problems, philanthropy took a new direction. The new field of social work was developed to address issues of systemic poverty, and the government began taking the responsibility for providing basic human needs.
The middle and late nineteenth century saw major bequests and endowments--which still influence us today:
- The Smithsonian Institution was created by a gift from an admiring Englishman, James Smithson, in 1846.
- The huge fortunes amassed by some American industrialists such as Andrew Carnegie, John D. Rockefeller, and Henry Ford were the basis for the large trust funds that make up the wealth of some of today's largest foundations.
- Industrialist Alfred Nobel established the Nobel Prizes in 1901.
Giving has changed a great deal in twentieth century America. With the establishment of Social Security and other government programs designed to provide a "safety net" for the poor and elderly, Americans have expanded their giving beyond providing basic survival needs. Today, they also contribute to funds to fight specific diseases; protect the environment; support education, research and the arts; and advocate for particular public policies.
Although charitable organizations are asked to pickup the gaps that cutbacks in government programs have generated, this does not necessarily influence the amount Americans have always contributed. Factors such as expansion of the economy, tax incentives, higher salaries and more jobs are more indicative of higher giving percentages than a "need" to fill in the gap left by cuts in government social spending.