A post to Exponent Philanthropy's blog

A Unique American Story: Public Policy and Private Philanthropy

Some years ago, when Jacques Chirac was still president of France, the U.S. State Department asked me to meet with Chirac’s advisor on domestic affairs. She had completed a national tour of institutions of American voluntarism. I was the last stop on her tour, her opportunity to debrief.

Her leading question to me was, “How can we develop a system of philanthropy and voluntarism in France like you have in the USA?”

My response: “Before sharing some ideas, I have some questions for you: Can you imagine France without a system of healthcare for all citizens? Can you imagine a French higher education system where students pay $30k or $40k or $50k per annum to attend? And so on….”

Her response: “Impossible!” [The discussion ensued.]

This brief anecdote captures several important realities:

  • The American philanthropy/not-for-profit system emerged from a very different set of political assumptions than most of the rest of the post-emancipation world. In the United States, voluntary institutions arose to meet real needs that the political system chose not to provide. Even today there are huge splits in assumptions and beliefs about whose role is what.
  • Public policy and private philanthropy are inextricably interwoven. Sometimes these interconnections are unintended and sometimes quite purposeful.
  • Neither a government-centered system nor a voluntary system has the capacity, on its own, to provide for all needs and interests of growing, aging, and diverse populations.
  • The history of the institutions of the voluntary sector themselves reflect a social history fully connected to the political realities in place when they were created.

For many, the history of philanthropy is conflated with the biographies of famous philanthropists.

To be sure there are many fascinating narratives of the superrich and the lives they lived—some of them tales of atonement, others of beneficence, all ultimately of generosity. But that is neither new nor unique to any one nation or culture or era.

What is distinctive, if not unique, about American philanthropy is not the magnanimity of the mega-rich, but the commitment to give among those of lesser means. This tradition started with the recognition that there really was no option: orphans, widows, the infirm, the aged, and the unemployed had no place to turn other than caring individuals, many of whom they knew from their own neighborhood or social group.

Thus begat institutions. There are needs such as education and health care and policing and firefighting that simply cannot be done by individuals. Organized around ethnic, religious, or national origin backgrounds, many of these institutions, or their successors, continue to be the backbone of the nonprofit service delivery systems around the country to this day.

But the world changed, and the intimacy between those of means and those with needs changed as well.

Industrialization required concentration of large numbers of workers at the same time in the same place. It changed the demographics of cities throughout the world. Those who could afford to do so moved away—to places with cleaner air and more space. The implications for the philanthropy field were profound. Those who moved away did not leave behind their communal commitments. But how?

Intermediaries emerged to solve the problem of how to match means with needs. United Ways, Catholic Charities, Jewish Federations, Protestant Welfare Funds, and community foundations all developed in the late 19th and early 20th century to facilitate this process. These intermediaries guaranteed to cover the annual deficits of their designated agencies that continued to provide vital human services. As the 20th century progressed, these re-granting intermediaries became the central players in community planning, organizational methodologies, and allocation of resources, a role they maintained until the century’s final decade.

Another development profoundly impacting philanthropy behavior was the emergence of a government safety net. Before the national social security system, funders knew that, were it not for their support, those with needs would have no place to turn. Gradually, though, societal commitment that none should fall between the web, no matter how porous it may have remained, allowed individual funders to look at their philanthropy differently. For the first time, philanthropists could respond to subjective interest rather than objective need.

And if funders are going to make subjective decisions, then the non-profit world will make emotive pleas for support. Thus began the competition we all recognize: every organization makes its best case using professional fundraisers, all accessible media, and carefully honed appeals.

And indeed, Exponent Philanthropy readers will hardly be surprised that a parallel sub-sector for funders arose during the 20th century: organizations that evaluate the legitimacy of these organizations, affinity groups of funders to provide mutual reinforcement, and education centers to provide the methodologies for making informed decisions.

Who would have imagined that all of these developments would emerge as unintended consequences of the New Deal?

And now, the 21st century has given us new realities, new policies, new technologies, and new philanthropic methodologies. But we will wait until the conference to discuss those.

Richard Marker advises foundations and philanthropists around the United States and elsewhere in the world through the advisory firm Wise Philanthropy. He is also a part-time educator of funders at both the NYU Academy for Grantmaking and Funder Education and at the University of Pennsylvania’s Center for High Impact Philanthropy. A popular speaker on philanthropy topics, he has spoken in 39 countries and in 40 states.

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