|Philanthropy and Business
Part 1 of 1
March 16, 1998
Very few of my students have an interest in careers in business. A number of
them will pursue professional degrees and will find that there is less
difference between business and the professions than they thought, but
"business" is not what motivates them. A career is about more than "just making
a living," they will say, although they respect both the need to make a living
and their own desire to live a more or less comfortable life.
They don't appreciate getting rich because they see that as mindless and
soulless self-interest. As a result they undervalue the creation of new wealth
and the possibilities of new wealth as a means to a larger social end. Andrew
Carnegie said that he was motivated to make money so that he could give it away
- and did just that. Carnegie's wealth made possible Carnegie's libraries.
There is another important insight into business that my students seem
unaware of. John D. Rockefeller, Sr., once wrote that "the best thing one man
can do for another is to give him a decent job." Business has presented itself
in recent years as preoccupied not with creating decent jobs but with the bottom
line. That is, business is about profits, full stop - it is not about jobs,
products, services, and communities. In fact, some voices of business pride
themselves on the heartlessness of business - downsizing was presented as a lust
for cost-cutting. Job elimination has been more highly valued than job creation.
There are of course quite serious reasons to be concerned with cutting costs
and with eliminating redundancy and other forms of inefficiency, and indeed I
agree with those who bring Occam's Razor to organizational life. Those values
are conceptually smaller than the larger purposes of economic activity, however:
business exists to create decent jobs for producing products and services.
It is reasonable to look on a business career as an opportunity to create
decent jobs - and to improve working conditions and the standard of living.
Business leaders in fact used to talk about business in those terms, and many
business leaders I have known seemed to believe what they said.
My point is that young people should be encouraged to consider business
careers as morally justified if pursued in certain ways. They are instead
taught to think of business as simply small and selfish with no higher or better
end than meanspirited selfishness. The image of business as a career seems -
from my vantage point - to be less honorable than it was a generation or two
ago. To be a business leader in the 1950s and 1960s was to have a wide view of
the role of business. The image was probably pushed too far and too fast.
Corporate social responsibility developed more rapidly than business practice,
and not enough attention was paid to responsible behavior during a downturn. The
more recent generation of business leaders won success by cutting costs and
serving shareholders and themselves at the expense of employees and
customers and the communities where they did business.
As corporate social responsibility pressed too far in one direction,
downsizing clearly overreacted in an opposite direction. Within business, those
concerned with manufacturing lost place to the marketers, and the marketers lost
place to the financial people. In the process, whatever emphasis there might
have been on manufacturing quality yielded to labor and production cost, and
marketing was told to make people like it - make people believe cost is more
important to them than quality.
If business is justified by job creation and the production of products and
services, reduction of business to a financial bottom line obscures the larger
mission. The wider sense of business as part of a larger society is also lost,
as is a longer-term perspective. Technology drives such changes, often without
regard for the larger or indirect consequences. I agree with those who say we're
running ahead of ourselves, unable to reshape society rapidly enough to sustain
social and political and other non-economic values.
I respect "business." I respect the people who make an honest living in the
marketplace and who create decent jobs. It is when business loses sight of those
values and speaks only in financial and narrowly self-interested terms that I
become discouraged. "Getting rich" is not a respectable goal for a young person
unless there is something in mind that one might do with what is
We will always find much to quarrel about in defining "decent" jobs and
"useful" products and services, and "honest" business practices. But the
qualifiers are important reminders that the business of business is always more
than business. The CEO of what was at the time the largest industrial
organization in the world once said that the company would continue as a private
business only as long as the society permitted it to.
If society is to respect business, business must respect society. On the
basis of what some of the very brightest young people seem to think - including
those who head for Wall Street to get rich - there is no reason to respect
Young people in philanthropy approach business in two ways, one consciously
and the other unaware. The conscious way is to say that they would like to work
in "corporate philanthropy." The other way is to say they want to work for "a
foundation," detaching in their minds the business enterprise that created the
wealth that made the foundation possible in the first place. Many young people
are snobs about people who make money yet have no difficulty in helping the
unenlightened wealthy to give their money away. At least two of the largest
foundations - Kellogg and Lilly - make a point of keeping the sources of their
wealth clearly in mind. The sources are two: the individuals named Kellogg and
Lilly who established the foundations, and the corporations that continue to
generate profits and dividends that expand the endowments. These two foundations
constitute a special case under the tax law because they are able to keep most
of their investments in the companies that first made them possible. Almost all
other foundations, beginning with Ford in the 1940s, dispose of the parent
company's assets and invest elsewhere, putting distance between themselves and
That has been a largely unquestioned tax policy for a long time, but as I
write this I'm not sure of its merit. Most serious is the loss of contact of the
foundation with its origins in business. It becomes too easy to think about
distributing wealth without thinking carefully enough about how wealth is
created. The individual and family values that build corporate wealth are often
lost sight of now that public ownership of companies diffuses control. All
shareholders are created equal. It is not appropriate, most corporate executives
now agree, to impose private or personal values on public shareholders. That
detachment from personal morals encourages the amoral philosophies that have
sustained the tobacco companies through their recent troubles. "Morality" is not
a business word.