Philanthropy: The Heart of Capitalism
An exploration of how businesses and individuals can contribute in ways that have lasting positive impact.
Philanthropy, The Heart of Capitalism, highlights the role of capitalism in philanthropy, and philanthropy’s effect on society, ranging from public health to education to the arts. Melissa Berman, president and CEO of Rockefeller Philanthropy Advisers; Stacy Palmer, editor of the Chronicle of Philanthropy, Dr. Freeman Hrabowski, President, University of Maryland, Baltimore County; and Stephen Watson, president and CEO of The National WWII Museum, share their insights on the symbiotic relationship between these two powerful economic forces.
Here is a transcript of the video:
Capitalism and philanthropy. One is associated with the accumulation of capital. The other with giving it away. Yet both capitalism and philanthropy are closely linked.
It’s part of the idea of ‘private initiative, private enterprise.’ Using business models to create social good. Philanthropy is also an important expression of people’s values and of how people who find themselves in a fortunate position want to try and create that opportunity for other people.
Philanthropy is just giving of yourself in some way that benefits humanity. And it means giving in any kind. It means giving your time, your talent, and your treasure.
It’s not just “you give money, you go away.” It’s about “how do I use this this amazing American economy and society to pull more people from that bottom economic group to help them dream about the possibilities.”
Philanthropy is hard work. There are no silver bullets. We need to find new ways to innovate and there is no country that does it better than the United States.
Andrew Carnegie’s 1889 Gospel of Wealth called upon the millionaires of the age to distribute their wealth for public good. The Rockefellers took up the cause and managed their giving in a way that mirrored a successful 20th century business.
The ground-breaking foundations that these titans of industry established had far reaching effects on education, culture, science, and public health. They approached philanthropy with the same diligence and determination they used to build their fortunes, strategically investing in areas where they could make the most impact.
Like their contemporary counterparts Ken Langone, Fred Smith, and Robert F. Smith, philanthropists are true capitalists. They want a return on their giving that exceeds the money invested.
What’s less appreciated is the importance of philanthropy and the non-profit sector to the overall economy.
The National World War II Museum will have 800,000 visitors this year, so we have become a significant economic driver, about $150 million a year in economic impact to the state of Louisiana. You see how it goes well beyond what you might imagine when, as a donor, you make a commitment to underwrite an exhibit.
It’s been clear since the very beginning that this was going to be a private foundation, and this was going to be an effort lead by passionate individuals across the country.
A lot of our great supporters like the Bob and Dolores Hope Foundation, Boeing, individuals, these are folks that are committed, who are key stakeholders and whether it’s $25 or $20 million dollars, philanthropy is what drives us. Philanthropy is about individual choices that will help and have an impact and will be central to the museum’s ability to, you know, tell the story for generations to come.
The purpose for a gift could be to shore up an institution and ensure that it endures for a long time, and that’s a great purpose, or it could be to give access to a group of people who didn’t have it before.
Let’s think about philanthropy as a part of the culture. The better educated the citizenry, the more robust the economy will be.
When I moved to UMBC, many students were not succeeding, and minority students were especially not doing well. There weren’t enough women or people of color in math and science or engineering. I was trying to find somebody to support this notion of producing minority scientists. At that time nobody talked about young black males but Robert Meyerhoff, a philanthropist in Baltimore, really wanted to support students of color, African-Americans and others. And so he founded the Meyerhoff Scholars Program.
The first year, the program was for black males. By that second year, we were delighted to bring in women. So, we just had the 30th anniversary of Meyerhoff. We’ve now become the leading university in the country in producing African-Americans who go on to complete M.D.-Ph.Ds. In fact, we have now produced more than any university in the history of America.
Looking at the students, we have produced M.D.s and they will help people individually. But we’re talking about people doing research, and so, because of that Meyerhoff program, other donors of ours have looked at efforts to start other programs and that will have an impact on the lives of people for generation after generation.
Today, a new generation is adapting the tools of private enterprise for a new era. They use data and analytics to measure impact. Form partnerships to take on large issues. Tie their businesses to their philanthropy to create global communities that benefit humanity – and the bottom line. Today’s philanthropists want to donate their thought capital as well as their financial capital. Ideas. Innovation. Insights. These are the building blocks of private enterprise and of modern philanthropy.
The model has changed really dramatically, and we see people constantly trying to reinvent it and think about things in different ways. I think we’re in pretty uncharted territory right now. We’re going to see a lot of people learning and giving smarter and better.
Philanthropy will continue to grow. It will become more competitive. That’s capitalism and that’s what really drives the arts, science, education.
To give people a chance to fufill their potential is really what philanthropy can create. You start with the individual person or place and the ripples go outward.
Philanthropy has a way of building on itself. The more people see others giving, the more they want to give. And that has to be the hope for humankind.