Is America Better Off Because of Its Reliance on Giving by the Wealthy?

In Philanthropy in America, a beautifully written and constantly engaging new book, the historian Olivier Zunz takes the reader on a journey from the mid-19th century origins of organized giving to the present day, all with the goal, he says, of showing how expanded giving by both small and big-money donors has created a successful “bridge between capitalism and community.”

In contrast to most of what currently passes for research and commentary in philanthropy—which means crunching the numbers on giving or writing superficial reports that do little except praise the innovation of their foundation supporters—Mr. Zunz focuses on the broader question of philanthropy’s contribution to society, its relationship to government and the public interest, and how different forms of giving intertwine to enlarge or restrict democracy.

He follows common threads that are instantly recognizable in today’s debates about philanthropy, but he shows that their roots are buried deep in history, like the desire for greater impact, the influence of the wealthy over public-policy concerns, the merits and demerits of “scientific” approaches to resolving social problems, and the ability of foundations to support social movements when constrained by regulations that restrict their political activities.

This is important, because we look to historians not just for their analysis of patterns from the past but also for their guidance in helping us to deal with similar issues in the present. Sadly, on that score I found this book inadequate, for Mr. Zunz fails to grapple with the tough questions raised by philanthropy and whether it has come to grips with the growing disparity between rich and poor in America.

This failure comes in part because Mr. Zunz casts his net so wide—church-based donations, giving to the civil-rights movement, support for international development groups like CARE, and infusions by the dot-com foundations of the 1990s are all treated under the same umbrella. Inevitably, some of the chapters, especially those that focus on the past 30 years or so, are thinner, ignoring arguments that don’t support the book’s positive conclusions about the expansion of American nonprofits overseas. For example, it declares that “civil society-building” in Eastern Europe has been a success, when in fact citizens groups remain quite weak. The book also ignores the negative effects of shifting foundation support from grass-roots groups to universities and big social-service organizations in the United States, which as authors like Robert Putnam and Theda Skocpol have shown, has weakened civil society and diminished democracy.

In the book’s final chapter, Mr. Zunz praises the Bill & Melinda Gates Foundation for its pragmatism, which will surprise those at the receiving end of its pro-market approach to improving America’s public schools or promoting food security in poor countries.

He offers no assessment of the accountability deficits that face large foundations like Gates, which has just three trustees: Bill and Melinda Gates and the foundation’s other major donor, Warren Buffett. Nor does Mr. Zunz question the power of technocratic elites who increasingly dominate the foundation world. And he fails to discuss the downside of business-oriented philanthropy, which is the flavor of the day.

Perhaps it is inevitable that the tools and perspectives of the historian are less useful in assessing contemporary developments.

At a presentation at the Hudson Institute last month, where three of us were asked to comment on his book, Mr. Zunz noted how difficult it is “to write the history of the present” without the benefit of hindsight and with much less material to evaluate.

True enough, but by linking the analysis of past and present and maintaining a critical tone throughout, it might have been possible to shed more light on the biggest issue that faces philanthropy today: Is America better off as a result of its greater reliance on private solutions and noblesse oblige of the wealthy than societies that place more faith in government and civil societies financed heavily by donations from average citizens?

At the end of his 396-page book, Mr. Zunz says the answer is yes.

But Ellen Condliffe Lagemann, a historian at Bard College and another member of the Hudson Institute panel, offered a less encouraging interpretation of the picture he paints. Perhaps the United States would have enjoyed broader prosperity if stronger action had been taken against the accumulation of private wealth that underpins philanthropy, especially donations by the nation’s multibillionaires?

Might the rise of philanthropy have undermined the idea that government’s role is to protect its citizens and promote the common good, not put the concerns of the wealthy ahead of those of others?

Mr. Zunz says philanthropy has always been too small to solve the problems of inequality and injustice. But one can’t claim that philanthropy provides a “successful bridge between capitalism and community” and also insist that it is powerless in the face of national problems.

After all, the United States now has the highest levels of inequality since records began; it sits far below the welfare state economies of Northern Europe on the Legatum Global Prosperity Index; it has dropped from 4th to 23rd on this year’s United Nations Human Development Index; and it scores lower than Gabon and Equatorial Guinea on the Global Peace Index that is published by The Economist.

During the same period, more wealth has been produced, philanthropy has continued to expand rapidly, and new foundations are born every day, so something must be missing from this picture. The question is, what is it?

In the book’s final sentence, Mr. Zunz writes that “if there is a lesson from the history I have told, it is that philanthropy enlarges democracy when it is an activity in which the many participate.”

But if “the many” are participating less and less amid the nation’s mounting economic insecurity and a growing political divide between rich and poor, then what does that say about philanthropy in America? That is surely the ultimate question for Mr. Zunz and other historians to ponder.