Old Money, Old Virtues
What's the right way for a billionaire to help the poor? There are two paths to take, with very different results.
A century ago it was Andrew Carnegie. Now it's Bill Gates. A fortune is amassed, and then most of it is given away. It is likely that a large portion of the $946 billion of private wealth represented in these pages will find its way into charitable endeavors.
As there are different approaches to creating wealth, there are different approaches to giving it away. It is oversimplifying only a little to say that there are two ways to be charitable, an old-fashioned way and a modern one, and that they have very different results. You can appreciate the contrast by comparing the works of two folks on The Forbes 400--Theodore Forstmann (see) and Ted Turner (see).
Forstmann has given away upwards of $200 million to the Children's Scholarship Fund, which offers free private-school tuition to indigent kids willing and able to do the work it takes to stay in school. This is a very old-fashioned approach, one that makes moral judgments about potential beneficiaries. Contrast Turner's $1 billion pledge to the United Nations, an organization that, by and large, adopts the modern approach. The U.N. makes moral distinctions not among individuals but among nations. Poverty, in this world view, is caused by large economic forces, and it is the job of the philanthropist to combat these forces.
Philanthropy changed dramatically in the 1960s. Until then, most Americans believed that neediness was only occasionally a material question alone: as when a sober workman needed cash assistance while recovering from an injury or a new widow needed tiding over until she could find work. More often, charity went beyond just handing out cash. Philanthropy in the 19th and early 20th centuries concentrated on education and acculturation, on moral reclamation--on turning lives around and getting people on the right track. It cared for the mind and soul, not just the body. Abhorring the idea of dependency and marginalization, it aimed to make its beneficiaries self-sufficient and to bring them into the mainstream: to make them fully American, fully working class--or, even better, middle class.
Traditional American charity stressed the skills and attitudes of self-reliance and personal responsibility; it aimed to spark an inner change by inculcating missing virtues and skills that allowed recipients to succeed on their own. Secular, or (as was frequently the case) religious, charity was heavily values-laden.
In the 19th century the Catholic Protectory in New York ran a residential school that rescued orphaned or abandoned kids, mostly Irish, who roamed the city's streets, ragged and often dangerous. Between 1863 and 1938 it socialized something like 100,000 youngsters who might have grown up to be low-lifes, if they grew up at all.
The school aimed to make its charges law-abiding and useful citizens by means of a clear set of faith-based values, stressing responsibility and respect. "Our great aim," explained Protectory founder Levi Ives, "is to mold their hearts to the practice of virtue." The Protectory kindled self-esteem by constantly assuring the kids that they were the children of a loving, all-powerful God, even if their own parents had abandoned them. It taught discipline and structure through military-style drills and group music-making, where they learned to play an individual part in a larger, transcendent harmony. Their academic and vocational courses allowed most to become skilled tradesmen and some to attend college.
All this went up in smoke during the 1960s. You can trace the change in such monuments of philanthropy as the great charitable foundations or the annual New York Times "Hundred Neediest Cases" appeal. Its typical beneficiary for the half-century following its founding in 1912 was the delicate wife working long hours to support three babies and a husband dying of TB. Or the "little mother," a 19-year-old orphan working hard as a showgirl to earn enough to care for her younger siblings. The beneficiaries were people doing everything right, who needed help in overcoming temporary (though grievous) misfortune. They were called the "deserving poor"--those trying to play by the rules and help themselves--as opposed to the "undeserving poor," whose self-destructive and antisocial behavior helped cause their troubles.
During the 1960s the focus of philanthropy shifted from the personal to the systemic, and from the moral to the political. If people were poor and in need, no longer were they assumed to be victims of misfortune or in need of developing the skills or moral qualities to succeed on their own. Instead, they were victims of the vast, impersonal forces of capitalism or racism that doomed them to failure, regardless of their own efforts or inner qualities. To help them, philanthropists would need to become political activists and lobbyists for ever-increasing government benefits. Charity became a wholesale, rather than a retail, enterprise.
The Ford Foundation's Gray Areas project, which turned out to be the pilot program for the Johnson Administration's failed, costly War on Poverty, is a luminous case in point. So is the foundation's support of Mobilization for Youth, an in-your-face group that agitated for increased welfare spending, trapping hundreds of thousands of New York women in welfare dependency.
By the end of the 1960s the New York Times "Neediest Cases" appeal was filled with drug-using or alcoholic single mothers dependent on welfare, whose dysfunctional behavior the Times ascribed to the environment to which society had consigned them. No one suggested that any of these needy individuals was creating her own misery (and that of her children)--or that true charity might help her stop the self-destructive (and immoral) behavior that was her real problem.
Such is the world view of many of today's most prominent philanthropic organizations--the NAACP, the Children's Defense Fund, the pro bono operations of some of the big law firms. At the start of the 1970s Catholic Charities changed its focus from charity to individuals to combating "the root causes of poverty and oppression" by means of "social action" and "making a contribution to the formation of public policy." A far cry from the vision of the Catholic Protectory 100 years earlier.
If the Welfare Reform Act of 1996 suggests anything, it is that most Americans believe the modern approach to helping the poor has been a tragic failure, luring millions of people into lifetimes of dependency, stripping away their dignity and making poverty an intergenerational inheritance even as the national economy has boomed and opportunity has proliferated. Nearly $6 trillion later, the U.S. has proved that money alone does not solve problems.
Now our ideas about charity are changing once more, and in a much healthier direction. You can see that change in New York's Doe Fund and its irrepressible head, George McDonald. He was once a noisy advocate for the homeless, preaching that all they needed was "housing, housing, housing." But when he looked closely at them, he realized their problem was their own behavior, since the overwhelming majority of them were drug users, alcoholics, or both. They had to have a change of heart and take control of their lives, McDonald came to believe. So he required those in his program to kick drugs and booze, to labor daily in the organization's street-cleaning program and to work with a job counselor. Over half the graduates end up in their own apartments with regular jobs--remarkable for people who had hit bottom.
You can see the change, too, in President Bush's Faith-Based and Community Initiative, which rests on the idea that the worst-off may need a moral and spiritual transformation more than they need material aid. It has taken us a long detour to return to this understanding, a detour costly in dollars and in human wreckage; but now that we have regained our bearings, we can be confident that our philanthropic giving will do good to those we sincerely aim to help.
This piece originally appeared in Forbes
This piece originally appeared in Forbes