Seven “New” Concepts that Are Not So New After All: Reflections on a History of Philanthropy

There seems to be an increasing number of books and reports about philanthropy and nonprofits, most promising to improve the efficacy of those who follow their wise words. The best of these acknowledge the distinct challenges of philanthropic and nonprofit effectiveness, and modestly build on what we know – basing their conclusions on real data. The worst of them show little understanding of history, offering up concepts (often based on only anecdotal experience) as if they’re the shiny new cure-all, when they’re neither new nor a cure-all.

As Cynthia Gibson put it in a wonderful NonProfit Quarterly article: “What’s of concern … is the increasing number of reports or studies on so-called innovative ideas or models—or ways to assess impact—that have been generated by individuals who seem to have little or no concern about whether or not what they’re claiming as ‘the next best thing’ is really just ‘been there, done that.’”

Gibson notes that, “A review of the steady stream of studies and reports issued under the guise of innovation reveals much that is merely a restatement or repackaging of ideas and concepts that have already been acknowledged or are being used by people who’ve been working in the nonprofit sector for a while.”

So it felt like a real gift to see the release, last month, of historian Olivier Zunz’s Philanthropy in America. It is an impressively well-researched book that comes at a perfect time, offering an antidote to all who think that everything interesting in philanthropy was invented today, or yesterday (often by them). Turns out, much of what we often talk about as if it’s new – or not happening at all – has been going on in the U.S. for 100 years or more.

Although I was familiar with much (although by no means all) of the history Zunz recounts, I was struck by how helpful it is to remember where we’ve been as a country when it comes to philanthropy. As Alexis de Tocqueville said, “History is a gallery of pictures in which there are few originals and many copies.”

Reading Zunz’s book, I noticed seven examples of things that are often portrayed as new – or not done – despite the fact that this is not, historically, the case.

1. How often do you hear the lament that nonprofits never die, because the sector lacks the forces of “creative destruction” – to use economist Joseph Schumpeter’s term – that buffet the for-profit world? In a 2010 article in Harvard Business Review, Allen Grossman and Bob Kaplan write, “Apparently, Schumpeter’s cycle doesn’t operate in the social sector.” Yet, history offers evidence to the contrary. During the Great Depression, Zunz notes that “one-third of private charitable agencies in the United States disappeared” during a three-year period. (I’ve also argued that, to the extent that nonprofits have been more resistant to these forces, that’s partly the point of them – to operate outside markets.)
2. Heard a lot about “cross-sector collaboration” or, more recently, of the term “collective impact?” A Stanford Social Innovation Review article describes the concept as the “commitment of a group of important actors from different sectors to a common agenda for solving a specific social problem” and discusses the need for a “fundamental change in how funders see their role, from funding organizations to leading a long-term process of social change.” But Zunz recounts how the earliest major American philanthropists saw their role in precisely these terms, and he cites many examples over the past century of government, foundations, nonprofits, and companies working together to address serious social problems, such as the effort to fight tuberculosis in the early 1900s. He describes the work of the Russell Sage Foundation and nonprofits to combat the disease and then notes, “Other funding partners in the fight against tuberculosis came from business, labor, and government. Life insurance companies naturally invested in reducing mortality rates among their customers.” It is likely the case that such efforts remain too rare, but there are many historical examples worth understanding.
3. Today, that work by life insurance companies on tuberculosis might be heralded as “corporate social responsibility,” “blended value,” or, in the newest term for what appears to be essentially the same thing, “shared value.” But there is nothing new about companies seeking to do social good and make a profit – or the recognition that these goals sometimes go hand in hand (although quite clearly sometimes they don’t). Zunz recounts, for example, how the insurer “Metropolitan Life paid for a major study of tuberculosis in Framingham, Massachusetts, and underwrote a large educational campaign.”
4. What about policy and advocacy work – which so often gets described as if it is a new push or something that funders historically haven’t done? This is perhaps the most powerful part of the story Zunz tells: the fact that philanthropy and public policy have been closely connected since the earliest days of institutional philanthropy and the subsequent spread of “mass philanthropy” in the U.S. a century ago. Zunz describes the evolution of the law with respect to this issue, but what is clear is that the earliest major foundations sought to influence policy, recognizing that this was a crucial way to make change. “Philanthropists have invested their resources in the greater American fight over the definition of the common good. They have taken all sides in all the partisan encounters that have divided our society and have strategically intervened in essential debates on citizenship, opportunity, and rights.” Zunz argues that this activity has “enlarged democracy.”
5. And what of the push to move beyond transactional charity to influence systems and lives on a significant scale, or to combat “root causes” of social problems? Reading press coverage of philanthropy, it would be easy to conclude that, before the Gates Foundation, no one really cared if they were making a difference with their philanthropy. But there is nothing new about the quest to make a measurable difference, as Zunz recounts. He discusses the way Julius Rosenwald pursued a strategy of improving education for blacks in the South, or the influence of philanthropy on private colleges and universities to become much more focused on scientific research – and much more secular. Zunz cites a 1907 Outlook magazine article by Daniel Coit Gilman, a founding member of the American Social Science Association and a president of Johns Hopkins University. “Gilman underscored the new philanthropy’s insistence on long-term solutions to social problems instead of temporary relief for the destitute. High among its goals was the search for root causes.”
6. How about PRIs (Program Related Investment) or the broader concept of “impact investing?” Zunz tells the story of the creation in 1967, by nine foundations, of the Cooperative Assistance Fund to invest in minority businesses. To their credit, the thoughtful present-day proponents of this kind of approach, such as Jed Emerson and Antony Bugg-Levine, are quick to acknowledge its history – but much of what is written by others seems ignorant of what has come before.
7. Finally, how many times have you heard that nonprofits don’t know how to market themselves? And yet American history includes many examples of brilliant marketing, fundraising, and education efforts led by nonprofits. Zunz describes how nonprofits mobilized mass participation and action for positive effect in the fights against disease. He also describes the successful campaigns to encourage giving that accompanied the birth of the “community chest” and the community foundation, and the “democratization” of philanthropy. Indeed, the country’s high level of charitable giving is the result of savvy marketing by nonprofits.

Zunz himself does not make the connections to the current debates about philanthropy: he is a historian. He simply recounts the history – I am not doing justice here to the breadth and depth of what he has written – and does so thoroughly and brilliantly.

So why does it matter that so much of what we talk about as if it is new in fact has a long history?

I think it matters, first and foremost, because there is so much to learn from these examples. But I also think it matters because philanthropy and the non-profit sector seem to suffer from a sort of self-esteem problem, accompanied by (or perhaps resulting from) a strange case of amnesia, that doesn’t serve us so well.

Perhaps this is an odd observation for me to make – as someone who believes deeply that philanthropy and the nonprofit sector should push to be much, much more effective than they are today – although I’d say the same of government and business. But I think the push for effectiveness will itself be much more, well, effective, if we remember what’s been tried and what’s worked – and some things clearly have – and if we remind ourselves of the historical significance of nonprofits and philanthropy. And, in this way, Zunz’s book really is a gift. He writes:

From Andrew Carnegie to Bill Gates, and from ordinary people who purchased Christmas seals to fight tuberculosis to those who wear pink ribbons to battle breast cancer, the nation has come to view philanthropy as both a quintessential part of being American and another means of achieving major objectives …. Together they have forged a philanthropic sector that donors, beneficiaries, and the state recognize as a critical source of ideas as well as funding.

Obviously, there is also much that is sobering in Zunz’s history. He tells of considerable timidity on the part of major foundations and their leadership at various important moments. It was also striking to read of concerns about philanthropy’s effectiveness that feel all too much like the concerns I – and many others – have expressed much more recently.

An example: Baptist minister Fredrick Gates, who advised John D. Rockefeller Sr., had worried about what he called “scatteration” almost a century ago. Edwin Embree, who had worked at the Rockefeller Foundation and the Rosenwald Fund, echoed those worries in 1949 in Harper’s, discussing “the sprinkling of little grants over a multiplicity of causes and institutions.” So while that does not make it wrong for me or other advocates for effectiveness in philanthropy to push for focus, as so many of us have, we’re better off understanding fully the long history of this discussion (and, quite honestly, I did not).

Philanthropy in America: A History is ultimately inspiring – and it is an indispensable guide to where we’ve been. It can help us figure out where we need to go – and even how to get there. And it’s a humbling reminder of the truth in Harry S. Truman’s statement: “There is nothing new in the world except the history you do not know.”

Phil Buchanan is president of CEP. To read other blog posts by him, click here.

 

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