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A Defining Moment in American Philanthropy
Part 4 of 4

The prominence of religion in American philanthropy and the aggressive tactics of the Christian Coalition bring an often Puritanical tone to current debates. Abortion is used as a galvanizing issue; "family values" rhetoric joins with occasional pronouncements that the United States is a "Christian nation" and the more recent inflammatory claims that it is also English-speaking. It is perhaps unavoidable that religion of the Right in the 1990s adds strong ethnocentric tension as the religion of the Left brought to civil rights thirty years earlier. The problematic role of religion in both politics and philanthropy may be the most volatile factor facing any future Filer commission.

Philanthropy is not all about ominous signals and trends, tensions, dogmation of Left and Right. The broad sweep of American philanthropy and most of its energy is devoted to its traditional agenda.

What has happened over the past two decades is that awareness of the scope and importance of philanthropy has led to systematic efforts to improve it. First, by bringing to it the disciplines and practices of modern organization and management. Second, by making it a "subject" in the world of knowledge, research, and education. Third, by making the work of philanthropy more open and accountable.

One pressure, as old as the work of charity organizations that began more than a century ago, is to increase efficiency--in raising money, in allocating funds, in delivering services. Because voluntary associations are usually governed by volunteers, and because many of those volunteers are drawn from the world of business, business practices have been increasingly brought to bear on nonprofit management.

The American public is largely unaware of the business dimension of philanthropy. The largest source of income for philanthropy is neither voluntary giving nor government grants but earned income from fees for services. Fully half of nonprofit income is from for-profit-like activity; the important consideration is not where the money comes from but what is done with it. Nonprofit organizations cannot distribute their surplus income to "owners" or "shareholders" (the so-called "nondistribution constraint").

Whenever government support diminishes or giving declines or fails to rise rapidly enough to meet increasing need, voluntary associations become increasingly entrepreneurial. Some become so entrepreneurial, in fact, that business values creep in along with business practices. The threat then becomes that the focus of mission will shift from those saved outside the organization to those who work within it. Despite these lapses--and they are on the rise--American philanthropy is better managed, more accountable, and more trustworthy than it was twenty years ago.

The second advance has been the surprisingly successful effort to bring the study of philanthropy, both its values and its practices, into the world of the university as a "real" subject. The Center on Philanthropy at Indiana University with which I have been associated for eight years is the largest and most comprehensive of about forty academic centers on American campuses. our work enlists scholars and students across the university, linking the study of philanthropy to the study of history, literature, medicine, philosophy, economics, law, social work, education, nursing, and other fields. Our Center has more than forty faculty members, each of whom shares a commitment to the study of philanthropy and to an established discipline or profession. Students are enrolled in a dozen new degree and joint-degree programs. In addition, more than a thousand "practitioners" take intensive training each year in the courses of The Fund Raising School. We publish books and journals, conduct research, sponsor research by others at other institutions. our work reaches as far as Thailand, South Africa, and the former Yugoslavia. Such an ambitious program would have been beyond the imagination of the Filer Commission of 1975.

More important than education and training, however, are the new connections philanthropy brings to re-engage the university in the life of the larger community. That relationship is bound to result in conceptual development as well as new knowledge; it is also certain to encourage more rigorous critique and evaluation; openness and accountability continue to grow and develop.

There is a fourth factor that enhances the importance of philanthropy for any future Filer Commission. Philanthropic institutions continue to command higher levels of trust and confidence than other institutions. It is clear that philanthropic purposes encourage trust; people want to believe that philanthropy is not only trustworthy but effective.

The future role or roles of philanthropy, then, confronting a new Commission on Private Philanthropy and Public Needs, will include some of the following:

(1) A continuing commitment to the ancient and honored practice of bringing compassionate assistance to those who are suffering. However, I would not predict more than marginal increases in giving and service for the poor and vulnerable.

(2) Maintenance and strengthening of existing social and cultural institutions. Much of American philanthropy is already committed to past philanthropic innovations and establishments. The claims of maintenance greatly reduce the disposable resources for new initiatives or changed priorities.

(3) Advocacy and reform will generate most of the heat, provide little of the light, and absorb less of the money. If anything, there will be a crowding-out phenomenon that will shorten the reform agenda. Moral and cultural issues, however, will dominate the media.

(4) There will be a turbulent decade followed by a settling toward the middle, redefining again, but gradually the balance among self-help, mutual aid, government assistance, and philanthropy.

(5) The two most ominous signs, both arising within voluntary action for the (perceived) public good, are the unraveling of shared understandings of what "civil society" might mean; and the rise of faction, especially fueled by ethnic fear and hostility. As James Madison defined it two hundred years ago: "By a faction I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community."

(6) The big financial news, reported first several years ago, is that the United States faces an extraordinary inter-generational transfer of wealth over the next two decades. Estimates range as high as $10 trillion (about as meaningful a number to most of us as those tossed about by astrophysicist). The transfer is seen as an opportunity for philanthropy on a scale rivaling the ambitious of the generation of John D. Rockefeller and Andrew Carnegie a century ago. New fortunes based on new technologies and new industries mean that first-generation billionaires must think as hard and creatively about distributing their fortunes as they did in amassing their wealth in the first place.

The very size of these fortunes may boomerang, of course; it is conceivable that political initiatives through tax policy may again more widely redistribute wealth, seen as more concentrated than it has been for decades. Philanthropic unresponsiveness or insensitivity may encourage a shift toward increased taxes on the wealthy (especially estate taxes, following Andrew Carnegie's candid opinion in "The Gospel of Wealth").

Philanthropy, despite some critics, has been a seedbed of innovation as well as a culture of reform. Foundations, corporations, and nonprofit organizations are far more open and accessible than a decade ago. Minorities of great variety now have a voice almost denied them by the Filer Commission. Some of the most interesting and promising innovations are in problem-solving and exploitation of the many possibilities of the "mixed economy"--philanthropy working with government and the marketplace.

The long, slow, and epoch-making progress of the values of philanthropy in education is now underway. Service to others will be taught to small children, bringing them an indispensable opportunity for self-esteem development as well as a closer involvement in community. children who develop self-esteem through service to others also learn better. From a global, long-range perspective, the education of children in voluntary service may be the next generation's greatest contribution to making the world better.

Finally, philanthropy is about hope. Hope is as important to us as air and water. Hope gives us the possibility of converting our values into action. Hope is often the only effective corrective of cynicism and despair in difficult times. The act of giving service to others is an act of hope for them, for ourselves, and for unknown others whom we will never know.

 

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