May 6, 1999 | Read Time: 5 minutes
“The problem of our age is the proper administration of wealth, that the ties of brotherhood may still bind together the rich and poor in harmonious relationship.” Thus begins “Wealth” (later named “The Gospel of Wealth”), Andrew Carnegie’s 1889 manifesto that launched a century of organized philanthropy.
Though still cited by historians and scholars of foundation philanthropy as the defining document of American charity, the gospel according to Mr. Carnegie is badly in need of revision.
Why? Because the objective realities facing philanthropy today are very different than they were 110 years ago. In fact, many of the problems facing American civilization in the late 19th century have been dealt with and studied — some even solved — by the 50,000 or so foundations that have been created since the old prophet penned his gospel.
That is not to suggest that Mr. Carnegie’s manifesto is totally obsolete or bereft of lasting wisdom. It is an inspiring document that moved many a millionaire to philanthropic purpose. And there is much in it that still applies, most notably support of Christ’s admonition about a camel having an easier time getting through the eye of a needle than a rich man getting into heaven.
“He who dies rich dies disgraced,” is how the sage of philanthropy worded it. But the point is clear. Anyone who gets rich in this life should give it all away “before he is called upon to lie down and rest upon the bosom of Mother Earth.”
Andrew Carnegie obviously believed that a foundation left in the trust of children, tax lawyers, and business associates is tantamount to giving it all away. We might quarrel with that premise, but it’s a small problem compared with other pronouncements of the gospel.
What is in greater need of modification — and it remains a characteristic of contemporary philanthropy — is Mr. Carnegie’s overweening paternalism. “The man of wealth [women are never mentioned] thus becoming the mere trustee and agent of his poorer brethren,” he wrote, “bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.” Also in need of modification is his implicit social Darwinism, such as his view that “the concentration of industry and commerce in the hands of a few, and the law of competition between them being … essential to the future progress of the race.”
Perhaps it was true in 1889 that “individualism, private property, the law of accumulated wealth, and competition” were “the highest result of human experience, the soil in which society has produced … the best of all that humanity has yet accomplished.” But in the century that followed, much was accomplished that did not call upon individualism and the law of competition, but rather on collaboration, altruism, and cooperative effort, producing triumphs of science and social justice — many of them spawned and supported, incidentally, by philanthropic initiative.
A 21st-century gospel of wealth would take account of the fact that not all wealth is earned. In fact, most of the assets that will be owned by the next generation of rich Americans will have been inherited, following the largest and fastest wealth transfer in world history. That certainly begs a different ethos than Mr. Carnegie’s call to “the manufacturer and the merchant” to saddle himself with the burden of philanthropy.
Another verity ignored by Mr. Carnegie, and most of the philanthropists who followed him, is the fact that about 45 per cent of a foundation’s endowment in truth belongs to the public, whose state and federal treasuries would have received that portion of any large estate had it not been left to a foundation. Thus it would seem only fair that 45 per cent of the trustees of all foundations represent those who own that portion — the ordinary citizen. A new manifesto would thus call for the democratization of organized philanthropy. To maintain the ratio of elites that exists on foundation boards today is to perpetuate plutocracy.
So, who is to write the new and improved “Gospel of Wealth” ? Ted Turner, George Soros, Bill Gates? Probably not. In fact, most words that have been heard from them on the subject are sound bites, platitudes, and bravado.
My candidate would be Irene Diamond, a modest but imaginative philanthropist who followed Mr. Carnegie’s advice to all millionaires “to sell all that [she] hath and give it in the highest and best form to the poor by administering [her] estate for the good of [her] fellows.”
In 1987, Mrs. Diamond seized her deceased husband’s $220-million foundation from his ill-intentioned business associates and, as she and Aaron Diamond had agreed before his death, gave away the entire endowment in 10 years, in ways that made a real and immediate difference for people of her time.
The Aaron Diamond Foundation not only supported culture, minority education, and civil rights; it became, under Mrs. Diamond’s direction, the largest supporter of AIDS research in the world. At the Aaron Diamond AIDS Research Center at Rockefeller University in New York, medical-research scientist David Ho developed AIDS “cocktails” — combinations of several drugs, including protease inhibitors, that have proved to be the most effective adversary of AIDS to have been found to date.
Few in medical science believe that Dr. Ho, Time magazine’s 1996 Man of the Year, could have accomplished what he did had Ms. Diamond chosen to distribute 5 or 6 per cent of her fund’s endowment every year. Her gospel of wealth would surely make the point that while there are sound reasons for some foundations to defend their perpetuity, there also are urgencies and crises before us that demand a rapid spending of foundations’ assets.
Mark Dowie, a reporter based in Point Reyes Station, Cal., is writing a book on foundations.
