Wealth, Freedom, and Philanthropy; P. Frumkin

231 Wealth,Freedom, and Philanthropy by Peter Frumkin E galitarians have long argued that the rich serve no real purpose in society, and that vast accumulations of wealth ought to be curtailed. These advocates of "social justice" maintain that the only way to achieve an equitable society is to alter the distribution of wealth sub stantially. Very often, they call for higher rates of marginal taxation, greater inheritance taxes, and even caps on personal wealth. What egalitarians seem to forget is that a mas sive accumulation of personal wealth often leads to increased charity and assistance to those who are needy. In fact, most large philanthropic institu tions in the United States were founded on the wealth of one individual who was free to amass a great personal fortune. Philanthropy'sUniqueMission In 1988,charitable givingin the U.S. to all fields, including religion, human services, health, and education, totaled more than $106 billion. By any measure, this is an impressive number. It is more than the total amount of money U.S. corporations distributed to their shareholders. It exceeds total Federal spending on non-defense goods and ser vices. Over the past decade,as giving has increased, philanthropy has grown to play a criti cal, though often unrecognized, role in society.

Private giving is a powerful vehicle for change, one which often differs radically in approach from government. In fact, the private nature of philan thropy has long been viewed as one of its great Peter Frumkin has written on philanthropy for National Review, The NonProfit Times, The Chronicle of Philan thropy, and other publications. virtues. It enables philanthropy to stand outside the pressures of public opinion and to engage in projects that government either will not or cannot undertake. Because of its often experimental and innovative nature, private philanthropy adds vari ety and competition to civic life. In some cases, this competition can lead to the re-examination of government policy--especially in education where government's track record in designing effective programs has been less than stellar. After philanthropist Eugene Lang "adopt ed" an entire class of innercity school children in New York City and promised to pay for their col lege education if they kept their grades up and fin ished high school, New York State started its own program of scholarships, "Liberty Partnerships,"

which were rather imperfectly modeled after Lang's design. Other examples of privately funded programs which government later tried to emulate include care for the elderly, shelter for the needy, and drug treatment. And yet, while government has learned a great deal about "what works" from philanthropy, the private agendas of foundations and philan thropists have long evoked suspicion. The propos al to create the Rockefeller Foundation, for exam ple, was greeted with unmitigated contempt. President William Taft's Attorney General viewed the plan to devote one of the world's largest for tunes to promoting "the wellbeing of mankind throughout the world" as a dangerous conspira cy-what he called "an indefinite scheme for per petuating vast wealth." To this day, vast wealth engenders a climate of envy and distrust: Why, many wonder, should pri vate citizens be entrusted with distributing large 232 sums of money?How can we be sure that philan thropistswillgivegenerously?To understandwhat drivesprivatephilanthropyandwhy it is crucialto avibrantanddiversesociety,it is importantto con siderthe way in whichphilanthropyand freedom are intertwined.

Freedomand Wealth Accumulation In discussingwhatit meansto be free, philoso phers often differentiate between positive and negative freedom. To experience negative free dom, an individual needs only to be free from restraint, free from interference, or free from unwanted governmentmeddling.Negativefree dom is termed"negative"becauseit is definedby sayingwhatan individualis "free from." The definitionofpositivefreedomis morecom plex and elusivebecauseit is built on a different and in some ways richer conceptionof freedom. Positivefreedom is connected to an individual's needto livea meaningfulandfulfilledlife.Anindi vidual experiencespositivefreedom when he is free to do what is right,to live the good life,or to be virtuous.Positivefreedomis termed"positive" becauseit is definedin termsofwhatan individual is "freeto do or be."Forpeopleto havethechance to accumulate wealth and for philanthropy to flourish,negativeand positivefreedommustboth be present.

Entrepreneursandbusinessmen,whorepresent philanthropy'sfuture,need an economicenviron mentfree ofbarriersandconstraints,onein which privatepropertyis protectedand regulationis lim ited. Wealthaccumulationis also tied to an equi tablesystemofpersonalandcorporatetaxation.It shouldcomeas no surprisethat philanthropyis far lessdevelopedin Europeandthe SovietBlocthan it is in the United States. Indeed, in Communist nations there is little or no independent philan thropy because large accumulationsof personal wealth aren't tolerated. That Americans are far and away the most charitableof all people bears witnessto the factthat negativefreedom,the free dom from unwarrantedgovernmentinterference whichourConstitutioncomesclosestto providing, is crucialto puttingin place the conditionswhich makephilanthropicgivingpossible. Butafreemarketplaceandlimitedregulationof businessaren'tenough.Withouta culturethat rec ognizesand values benevolence,philanthropy's moralrootscannottake hold. Charitablegivingis thus intimatelytied to a specialkind of positive freedom,the freedomto be benevolent.Thisfree dom rests, of course, on a whole series of other moral and religious freedoms. Philanthropy involvesmore than just wealth accumulation.It dependson an appreciationof the needsofothers and an enlightened sense of self-interest.To be charitableimpliesthat one is free to look beyond narrow self-interestin order to find a richer and fullersenseof the good.

A centuryago, AndrewCarnegieexplainedthe rationalitybehind benevolence,and his thoughts remain relevant to this day. Carnegie argued in The Gospel of Wealth that by givingaway "sur plus"wealth,therichcandowhatis at oncemoral ly right and prudent. By investingtheir fortune rather than hoardingit, wealthypeople,Carnegie believed,could defusecriticismof the economic systemwhich made their successpossible,as well as meet some pressing social concerns. Philan thropicinvestmentnotonlywouldstrengthencap italism,but,if properlydone,wouldalso give oth ers the opportunityto competeand succeed. SinceCarnegie'sday,philanthropyhasgrownby leaps and bounds.Not only have new and impor tantfoundationssprungup,butnumerouswealthy individualshave also given generouslyto charity. The reason, as Carnegiepointed out, is that phi lanthropyenablesthe wealthyperson to win the approvaland admirationof others."To die rich,"

Carnegie warned, "is to die in disgrace." As a result,the desirefor respectwhichmostsuccessful people possesswill continueto lead the wealthy towardphilanthropy. Withouttheeconomicfreedomto gamerwealth andthe moralfreedomto actbenevolently,philan thropycannotsurvive.And withouta vibrantphi lanthropicsector,a powerfulforce for socialinno vationand changewill be compromised.To those who worryaboutthe dangersofwealthaccumula tion, these two facts shouldgive cause to ponder. With its stringent economicand moral require ments,philanthropylends crucialsupport to the valuesand principleswhichhave madethisnation prosperousand freefor so manyyears. D 233 "That's Already Been Settled" by Earl Zarbin S olicitations through the mail for one cause or another are endless. Most I ignore, pitch ing them aside unopened. My wife, howev er, looks at all the mail. She reads everything, including all requests for money. Lately, there was an appeal to which she wanted to contribute some cash. This was a lobby in Washington, D.C., trying to get Congress to amend a law so that funds it appropriated for the arts would not go to pornographers or other purveyors of disgustment.