By the early 1890s, John D. Rockefeller, Sr. had devised one of the world's most brilliant and sophisticated systems to make money. But when it came to giving it away, inefficiency was getting the better of him. Rockefeller had been giving to charity since age 19. He had emerged in the public eye as a very wealthy man, known for his generosity. "He was stalked, badgered, harassed, followed wherever he went," says family historian Peter Johnson. "He couldn't walk down the aisle of his church without people asking for some money, steamer trunks of letters would come in pleading cases, … 'If I could only get $100, I'd be able to move to Arizona and clear up my sinuses,' and things like that. It was constant."
Rockefeller was overwhelmed. Unable to either give donations without investigating the worthiness of the cause or simply ignore the thousands of letters flooding his office, he felt trapped by his own commitment to do good. He needed a vision for his giving.
The idea was not new. In his "Gospel of Wealth," published in 1889, Andrew Carnegie had made the case for wealthy industrialists to donate their "surplus revenues … in the manner … best calculated to produce the most beneficial results for the community."
Rockefeller couldn't agree more with his fellow millionaire. Senior looked for an advisor to help him through his dilemma. He found one in Frederick Gates, a young Baptist minister with a sharp mind and a colorful personality. Gates was quick to understand Senior's predicament: "Your fortune is rolling up, rolling up like an avalanche!" he told him. "You must keep up with it! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children's children."
Gates worked with Rockefeller to develop a system to ensure that his philanthropic donations were put to the best possible use. An avid reader of books of medicine, economics, history, and sociology, Gates believed that the wealthy could do a lot more than have a library wing named after them or mitigate poverty and other social ills. Philanthropy's real potential, he argued, lay in its ability to identify and change the roots of those ills -- not its symptoms. By focusing on the idea of "scientific giving," he and the other new philanthropists at the turn of the century were able to act in a more organized fashion and tackle areas neglected by the government, such as education, science, public health, and agriculture.
Medicine, a relatively new field at the turn of the century, was one of the first testing grounds. In 1901, Gates convinced Rockefeller to found a research facility that would give "men with ideas, imagination and courage," the means to make scientific discoveries aimed at curbing infectious diseases. The Rockefeller Institute for Medical Research (now Rockefeller University) was the first center in the U.S. devoted exclusively to experimental medicine, and has been the site of many biomedical breakthroughs.
Gates was also instrumental in directing Rockefeller's attention to the plight of the South. The former favored a broad approach to the region's problems, building hundreds of high schools through the General Education Board (1903) and launching campaigns to eradicate hookworm and improve Southern agriculture.
But the most significant outcome of the dynamic collaboration between Rockefeller and his inventive advisor was the creation of the Rockefeller Foundation in 1913. The ultimate embodiment of Gates' comprehensive approach, it was a permanent corporate philanthropy on a scale never before seen -- a charitable trust to parallel the oil trust that had made it possible. The Rockefeller Foundation has given away about $170 million every year to hundreds of causes, ranging from the arts to health, education, housing and food for the disadvantaged. In 1999, it changed its mission to focus exclusively on the world's poor and excluded populations.
Gates died of pneumonia in 1929, six years after resigning from the Rockefeller Foundation. His innovative ideas helped shape modern philanthropy, and in the process changed the Rockefellers' reputation forever.