The Evolution of American Philanthropy - A Petrus Development Show Episode

It seems obvious that communities should help their members in need, but —but is it really? The reasons behind our philanthropic impulses have shifted dramatically throughout American history, and they're shaped by the social ideals and influential figures of each era.

• Why (and how) do we care for those who struggle?  
  
  
• What makes American philanthropy unique compared to other countries?
  
  
• How did we develop our particular approach to caring for community members who struggle?

Join Andrew and Rhen as they explore these questions through the lens of United States history. Andrew's passion for both philanthropy and the past guides listeners through the distinct phases of American giving—revealing how we arrived at today's charitable landscape and what drove us there.

INTERVIEW TRANSCRIPT

00:02:32.10
Host
Well, howdy, everybody. Welcome back to the Petrus Development Show. I am Rhen Hoehn from Petrus. Joining me today, Andrew Robison. How's it going, Andrew?

00:02:39.56
AROB
Oh gosh, I'm doing good. How about yourself, Rhen?

00:02:42.41Host
Living the dream, having a good time. I was recently with you down at College Station. It was in the 90s. Now I'm back in Michigan, and it is 49 degrees right now.

00:02:50.29
AROB
Yeah, it's warm down here. That sounds nice up there.

00:02:55.31
Host
A little tough to get used to.

00:02:55.57
AROB
That sounds nice.

00:02:57.12
Host
It's fall. I love it. Colors are changing in the leaves. Kids are back in school. And I know you were mentioning that you just kind of finished up wrapping up the classes that you were teaching this summer at St. Mary's.

00:03:09.56
AROB
Yeah.

00:03:10.17
Host
St. Mary's.

00:03:11.03
AROB
Yeah. So I think we've talked about it in episodes past, but I have taught—this was my fifth year teaching in the business school at the University of Mary. We teach in what they call the Institute for Catholic Philanthropy, but it's these courses that you can either take independently for a certificate in Catholic philanthropy, or you can layer into the MBA program and earn your full MBA from University of Mary. But that's been a really fantastic program. I've enjoyed that. And I just had to—a couple of, uh, recently I had to submit final grades. That's why I was, um, and you know, I love the teaching part.

00:03:50.76
AROB
Uh, I love the preparation for the courses, the grading, the submitting the grades, all of that stuff. It feels like even when I try really to get super ahead of it, there's one grade that I miss.

00:04:06.00
AROB
And then I've got, you know, administrators hounding me for "submit your final grade." So I did it. So.

00:04:11.31
Host
Hey, all right.

00:04:13.97
Host
Excellent. And one of the—you, we talked about this, I think a couple episodes ago, the classes you were teaching, and one of them was about the history of philanthropy in America, right?

00:04:24.73
Host
And that's kind of what we wanted to break down today, because I think a lot of us don't know it.

00:04:28.64
Host
Well, how did we get to where we are?

00:04:30.63
Host
Where do we come from? What did it look like in the past? Well, let's just dive into it. Hey, where do you want to start when it comes to the history of philanthropy in America?

00:04:40.48
AROB
Yeah, so I love history. As some of the listeners probably know, and as well, you're very aware, is that we also do the Holy Donors podcast, which we haven't recorded an episode in a while, but we did 15 seasons, covered Catholic philanthropists throughout history.

00:04:59.45
AROB
And I think in that research and understanding those individuals, there was a lot of, you know, kind of trying to place them within the context of history, particularly the American ones.

00:05:11.27
Host
Right.

00:05:11.35
AROB
And so that, you know, it's always kind of been there. Like I love going back and studying history. Why do I love that? I think in part because I like understanding how things work and how we kind of get from point A to point B, or, you know, from point A to point Q or whatever it is.

00:05:33.16
AROB
And when you understand history, when you can—for me personally, when I can see it in a timeline, you know, and I can see this event influenced this event and this event influenced, you know, this mentality, it just sort of helps me to understand. And so being in philanthropy for now—being in fundraising now for 20 years, golly, so long.

00:05:56.49
AROB
Uh, 20 years, you know, there's times that I've been a little bit more diligent in understanding the history. And there's times that I'm just like, "Oh yeah, yeah. Philanthropy goes back a long ways."

00:06:06.79
AROB
And so this preparing for this course and sort of diving into the history of philanthropy, history of fundraising in an intentional way was just fascinating to me. So I loved it. And I think the class, you know, turned out pretty good and students got a lot out of it. So that's what we're gonna talk about today. Yeah, you're right.

00:06:25.20
Host
Excellent. If we were prepared, we would have figured out when all of our holy donors fit into this timeline and dropped them in there so you could do a deeper dive on each of these sections of history.

00:06:31.86
AROB
Yeah, that's right.

00:06:34.76
Host
But maybe that'll be my goal as we go through this.

00:06:38.17
Host
I'll throw in as many as we can. So if anybody wants to go do a deep dive in a particular period of history, they can listen to some of those holy donor stories. But you were a history major in college, right?

00:06:48.36
AROB
I was, yes. I started out my first time applying—it was business, then it was Parks and Rec. And finally, history is where I kind of settled in and actually earned my degree. So it was great. I loved it. I didn't really specify or focus in on any one area of history.

00:07:07.55
AROB
My senior seminar course was on the history of the Soviet Union. So that was, yeah, not something that I really knew anything about, but that was interesting.

00:07:17.91
AROB
And so yeah, I think that was kind of where I just gravitated from a college perspective of like, "What do I want to use college for?" It's not to learn how to be an engineer. It's not to learn how to be a doctor. It wasn't a trade focus for me. It was more, "I want to use college to figure out how to be a critical thinker, how to be educated, how to learn those skills that have served me well for a long time."

00:07:46.48
Host
And look where you are now. They said there was no future in history, right?

00:07:50.50
AROB
You sound like my dad. Yeah.

00:07:54.06
Host
All right. So looking back at philanthropy and American history, where do you want to start?

00:07:58.13
AROB
Okay. So let's start at the very beginning when America was not even really separate from the British, right? So Cotton Mather was one of the Puritans who was part of the early founding of the country. And Cotton Mather was seen as one of the leaders of, you know, colonial America.

00:08:24.80
AROB
And he really had a—he promoted this view that if we, if the country, if this new country, this new settlement was going to survive, then it really was dependent on the community to support the people within the community that were struggling.

00:08:46.14
AROB
Right. So it was like this, you know, us versus them mentality. It was, you know, anybody who's in trouble, anybody who's suffering—their house burns down, you know, the husband dies and, you know, the widow now has four kids that she has to take care of, whatever that is—it was very much a, "Hey, we as a community, we as Christians, we need to gather around, rally around and support this person."

00:09:09.39
AROB
So that was kind of the early American approach to philanthropy—it's good for the country if we take care of the people that are struggling.

00:09:25.08
AROB
Now, even within that, though, there was a divide between how people viewed people that were struggling. And these aren't the words that they use, but there was essentially like the "lazy poor" and the "working poor," right? The working poor were the ones that were down on their luck, were struggling.

00:09:41.93
AROB
The lazy poor were the ones that really didn't try and didn't put forth any effort to better their lives. And even back in the, you know, 18th century, there was already this idea of like, "All right, you can be worthy of support—financial support or community support—and you can be unworthy." And the unworthy ones for the most part kind of got left out and, you know, had to fend for themselves because that was the situation that everybody felt like they had put themselves into. So that was early philanthropy—was very practical in we need to be a strong community. And so by supporting the people that are struggling, that's how we become stronger.

00:12:22.04
Host
Gotcha. All right. Great. You mentioned Mather. Was there anybody else kind of shaping philanthropy in these early colonial times?

00:12:30.36
AROB
Yeah, somebody that we all know about is Benjamin Franklin. And Benjamin Franklin was definitely an advocate for and a tireless worker for building up the community through investments in people's ability to get kind of better.

00:12:45.27
AROB
Not—again, I don't think that Benjamin Franklin necessarily had negative attitudes towards the poor, but he was very much—um, this, you know, last in Episode 176 we talked about charity versus philanthropy, right? Charity is helping people that are in need now—that need food, need shelter, need now. Philanthropy is addressing the societal issues or the kind of upstream challenges.

00:13:10.70
AROB
And so Benjamin Franklin would have definitely been in the camp of philanthropists because he helped build in Philadelphia in like the 1780s, I believe, 1790s.

00:13:21.00
AROB
He helped build a hospital. He helped build schools, libraries. He was very much like, "If our country, if our society, if our people are going to succeed, we need to invest in these things that are going to help—education, health," those as opposed to just letting those things happen on their own.

00:13:43.32
Host
Good. Anything else in colonial times you want to touch on?

00:13:46.34
AROB
No, I think it was—um, I say no and then I keep talking. I hate when I do that. Sorry. The colonial times was definitely this, like, if we're sort of categorizing what does philanthropy look like, it's a practical sort of philanthropy.

00:14:00.27
AROB
You know, it's "if we're going to make it as a country, everybody needs to band together and help the people that are struggling." And so the—um, there were certainly attitudes about, you know, who was worthy and not worthy. But on the whole, it was philanthropy was focused on "we have to make it as a country. And so let's help each other out to be able to do that."

00:14:22.07
Host
Excellent. If you want a bit of a picture of this time in history, about philanthropy in this time in history, we have a couple of holy donors. We have John Melanthi, who was—he was living in Kentucky when that was the frontier.

00:14:30.32
AROB
Yeah, John Melanthi.

00:14:34.94
Host
Remember that.

00:14:35.62
Host
And then he had some interesting travels all over the middle of the country as it expanded west. And he was a part of kind of laying the Catholic foundations of St. Louis. So he was a big part of that.

00:14:46.10
Host
And then also blessed Pierre Toussaint, who was a slave and then earned his freedom, bought freedom of others. A very interesting story. He was born in the 1700s. He lived to be, I think, almost 90 years old.

00:14:58.22
Host
So he was well into the 1800s as well.

00:15:00.55
Host
But a couple of interesting stories from that time of history.

00:15:04.04
AROB
Great. And that's a perfect segue. So Toussaint was a Haitian slave who, when the French Revolution started in France, it kind of spilled over into Haiti because Haiti was a French colony.

00:15:18.66
AROB
That's when—um, I can't remember his name, maybe you can look up—but Toussaint's owners, the plantation owners, fled Haiti with Toussaint, his sister, and a few others to New York.

00:15:29.54
AROB
And so eventually he went back to Haiti, he died—the master died—and then Toussaint spent the rest of his life, or the rest of her life, supporting his mistress, who then she granted freedom to Toussaint, and then he bought freedom for his sister and others.

00:15:48.10
AROB
So that was, you know, not your kind of typical journey of most American slaves who were really freed during the Civil War or the Emancipation Proclamation that then, you know, sort of moved into Civil War 1865-ish.

00:16:04.20
AROB
But after the Civil War was another monumental shift in philanthropy. So did you look up his name?

00:16:14.55
Host
Is it Jean-Jacques Bérard?

00:16:16.79
AROB
That's right, Bérard. Yeah, that's right. So, okay. So we've started in the colonial times with this practical history or practical philanthropy. Now we're in the 1865s post-Civil War time.

00:16:30.13
AROB
We're talking about post-Civil War. We're talking about Reconstruction. So the country has just been, you know, ravaged by the Civil War. There's, you know, this clear divide between the North and the South.

00:16:41.69
AROB
You have this entire now class of people that are referred to as the freedmen, who are slaves, who were who are now freed. And so like the country is just in this massive sort of transformational time.

00:16:57.62
AROB
Well, in order to help rebuild, a lot of people—industrialists, wealthy individuals they and just sort of, you know, forward-thinking people—said, "Okay, if we're gonna like actually rebuild as a country, we need like a strategy around this." And so that's when philanthropy really shifted from practical philanthropy to a little bit more strategic philanthropy—still practical in the sense of like "we want to rebuild," but—this is when we had the introduction of the charity organization societies, which were kind of local networks, local sort of clearinghouses, so to speak, of, um, you know, evaluating—you know, people would give money to the charity organization societies and businesses.

00:17:45.57
AROB
These charitable organization societies would kind of operate a little bit how community foundations operate today, but, you know, like evaluate who needs help. You know, where could we put our money to have the biggest impact in terms of rebuilding or helping people in need?

00:18:01.74
AROB
And so the Freedmen's Bureau was also formed to specifically help freed slaves, you know, kind of transition in life. And so it was much more like a strategic look at philanthropy. And the phrase was actually coined during this time of "scientific philanthropy." So scientific philanthropy is this idea of don't just give money without seeing kind of what the results are, but let's apply some understanding, some strategy to this so we get better return on investment. We put money where it's going to make the biggest impact.

00:18:39.91
AROB
And that was how we sort of shifted into this new phase, which would be more strategic or even, you know, kind of using the parlance of that day, scientific philanthropy.

00:19:00.81
Host
Were there any standout kind of leaders of the philanthropy of that movement at this time?

00:19:04.45
AROB
Yeah. Yeah, definitely. So, so John Rockefeller was born 1838, 1839, somewhere in there. And so he founded Standard Oil, became one of the country's first billionaires, and Rockefeller was also a very devout Baptist.

00:19:27.50
AROB
And so he had this whole, like, idea behind building his wealth and that "I want to make as much money so that I can do as much good with that money."

00:19:38.41
AROB
So, you know, there's a really fantastic book—I don't know if you've ever read "Titan." It's the story of John D. Rockefeller. And why don't you look up the author? 'Cause he's written a number of books he wrote. Oh, sure. No. Ron Chernow wrote "Titan." Phenomenal book. It's really long—on audio, it's like 42 hours or something like that.

00:19:57.77
AROB
But it's phenomenal. I would definitely recommend it. But Rockefeller, you know, I wouldn't say he's like a man to emulate in a lot of ways because, you know, in order to build his wealth, he crushed people's lives. He, you know, he was—he had to stand up to people that were striking.

00:20:17.16
AROB
You know, he waged battles with other oil companies, but he was kind of motivated and driven by this idea of, "I want to make as much money as I can so I can give as much away."

00:20:27.55
AROB
So he did. He founded the University of Chicago. He gave money to a lot of different organizations, schools, education. He was kind of the—where—before Rockefeller, we didn't really have—we had like these sanitary commissions that formed after the Civil War, but there was no like Department of Public Health or Department of Public Safety.

00:20:53.58
AROB
And Rockefeller was really the one that kind of instituted that. It was a really interesting story. So he hired a guy—can't remember his name—but he hired a guy to manage his philanthropy. He was giving away so much money.

00:21:06.26
AROB
He said, "I can't manage it all myself. I need somebody." So he hired this guy and people would come to this guy and say, "Here's a need. Would Rockefeller help?" So he was, you know, kind of the grant manager, so to speak.

00:21:17.07
AROB
And somebody brought this idea to Rockefeller through his support guy—of the South, people in the South are really struggling with this disease nobody can understand.

00:21:31.17
AROB
And it ended up being hookworm, but nobody really knew it at the time. There were some scientists who were starting to try to understand this. And he said, "Look, hookworm is something that makes people fatigued, it makes people tired."

00:21:44.71
AROB
And in fact, there was like this—you know, because people don't understand it—there was this idea that people in the South are just lazy because they're always just sitting around. When in fact, a lot of them actually just had hookworm. And so, you know, this guy comes to Rockefeller's assistant and says, "There's actually a really helpful, really easy way to cure hookworm."

00:22:03.73
AROB
You drink like a cup of Epsom salts mixed in water and then a gallon of fresh water. And somehow by doing this, like it flushes the hookworm out of your body.

00:22:16.21
AROB
And then you're cured—like the hookworm is no longer in your body and you're fine. And so he said, "You know, if you give me a million dollars, I'll take this knowledge of now what hookworm is, how to cure it, and to, you know, communities all over the South and we'll get rid of hookworm." And Rockefeller says, "Well, that sounds smart, yeah, let's do that." Put a million dollars in and basically eliminated hookworm from our country, which then, you know, sort of turned into this like, you know, "Oh, maybe there's like other diseases and things that we can, you know, have this like strategic look at curing or resolving." And so that was Rockefeller—he was very much in this scientific camp.

00:22:58.61
AROB
Rockefeller was a big guy. There's also Andrew Carnegie who—Andrew Carnegie had this famous quote, and you can fact-check me, make sure I get this right—but it's basically like, "We do no good to people by giving them money." And so it was very much this idea of instead of giving money to people that are struggling, we need to build systems that keep them out of the place where they're struggling. And so that's why we have, you know, hundreds or thousands of Carnegie libraries and schools all over the country. He was very much in "what systems can we do to promote education that bring people up out of this sort of struggling life."

00:23:38.45
AROB
Did you look that quote up?

00:23:40.34
Host
I'm looking, he's got lots of quotes.

00:23:42.78
AROB
Yeah, all right. Well, if you find it, I'll keep going. So another person during this time was Catherine Drexel, who we did do a season of Holy Donors on. Katharine Drexel was born in 1858, because I think she was like nine when the Civil War—or she was in her like—in her early seven through ten when the Civil War and kind of came through Philadelphia.

00:24:02.09
Host
I think she was seven when Lincoln's body was paraded through Philadelphia.

00:24:02.25
AROB
You remember that?

00:24:05.40
AROB
That's right.

00:24:05.88
Host
There we go.

00:24:05.96
AROB
That's what it was. Yeah. So, so Katharine Drexel grew up in a wealthy family. Well, she—her parents, her stepparents, died when she was still fairly young, a teenager, I believe. She inherited $20 million. But she had grown up with her mother and her stepmother, Emma, who would basically hold court in their house and people would line up that would come through and she would give them money, right, and she would help them out.

00:24:32.76
AROB
And so Katharine Drexel was trained in this idea of "charity is what we need to focus on because when people are struggling, it doesn't matter whether they can read or write or want to be a doctor 20 years from now, like they need the money now to survive another day, another week, another month."

00:24:48.97
AROB
And so Katharine Drexel embraced this charity—she used her wealth. She founded the Sisters of the Blessed Sacrament. And then ended up opening schools all over the country, particularly for African-Americans, for Native Americans.

00:25:07.81
AROB
She recruited, you know, young women to join the order. And they had this, you know, like very much a charity but also philanthropy approach where "we want to help people that are in need but we also want to build systems to get them into a better place in life."

00:25:28.83
Host
Do you want me to go back to any of those things?

00:25:31.12
AROB
What did you figure out—who that Katharine Drexel—what was her order? Sisters, not daughters, yeah. So why don't you just correct me there and then sort of if any questions you want to ask in there about those people?

00:25:34.97
Host
The Sisters of the Blessed Sacrament, not the daughters.

00:25:44.49
Host
So I think it's the Sisters of the Blessed Sacrament for Katharine Drexel.

00:25:50.03
Host
Just digging into Carnegie here. It looks like he never—I couldn't find the exact quote that you said, but it kind of lines up with his writing of the Gospel of Wealth.

00:25:59.25
AROB
Yes, the Gospel of Wealth.

00:26:00.42
Host
"Help those who help themselves" is one of his main principles in there.

00:26:05.96
Host
And just to throw in a couple other holy donors, because why not? We're going through history here. You mentioned Katharine Drexel, also active at this time. Margaret Haughery, the bread lady of New Orleans.

00:26:14.42
AROB
Yeah, bread lady.

00:26:15.50
Host
She was an adult at this time. She was serving the poor during the Battle of New Orleans, right? So all the Civil War is active on her doorstep. And she lived into the 1880s. Also, Molly Brown was born right around this time.

00:26:30.57
Host
Actually, Margaret Brown.

00:26:31.57
Host
She was never actually known as Molly during her life.

00:26:34.70
Host
But she was born in the 1860s.

00:26:34.73
AROB
But she was unsinkable.

00:26:40.50
Host
And Tim Scanlan, who, if I remember correctly, I'm going off memory here, and that's dangerous, but he was the mayor of Houston at some point, right?

00:26:49.21
AROB
That's correct.

00:26:49.35
Host
And I think he...

00:26:49.53
AROB
He was the mayor and president of the Houston Water Works.

00:26:51.14
Host
He was actually active with that kind of Department of Health type of effort, right? I think, I believe it was yellow fever maybe that he was helping to eradicate.

00:26:59.59
Host
And that was like the big thing back then.

00:26:59.73
AROB
Yes, so yeah, so he was—your memory is correct, yeah. So Tim Scanlan was a mayor of Houston and then afterwards he was the president of like Houston Water Works. And from a public health standpoint, they were having fires ravage the city because the pipes were too thin as the city expanded. And so he rallied the people to invest money into building bigger pipes so that they had clean water so that they could put out fires.

00:27:32.58
AROB
And that was ultimately what set the stage for Houston to grow. Ultimately it's what got him kicked out because they felt like he was sort of doing all this in a shady way to make himself a lot of money, which there's no evidence that he was.

00:27:45.66
AROB
But no good deed goes unpunished. Andrew Carnegie, you mentioned that quote about "help them who helps themselves." And he also had this quote, "Neither the individual nor the race is improved by almsgiving."

00:27:58.93
AROB
So, right. So it's interesting. So like, you know, looking at, you know, history, how did these sort of attitudes—you know, they started with the Puritans and, you know, colonial times of, you know, there's the working poor and there's the lazy poor, right?

00:28:01.75
Host
Yeah.

00:28:14.89
AROB
And now we've got, you know, we've shifted over after the Civil War into the scientific philanthropy standpoint and, you know, where it's like, "We want to have maximum impact for our gift."

00:28:26.24
AROB
We, you know, "nobody has ever been made better by a handout." You know, "We need to sort of help them up with a hand up," right? That's a kind of phrase that you hear today still.

00:28:37.38
AROB
And so it's interesting how, you know, as we look at these sort of major phases of philanthropy, there's still these ideas that permeate, you know, it's like things change, but they still stay the same.

00:28:50.17
AROB
And so I think that it's—and it wasn't only that.

00:28:54.27
AROB
Julius Rosenwald was another big player during this time. He was a Jewish man and he made a lot of money through Sears and Roebuck. I think he was one that instituted the catalog, which, you know, if you watch any old movie about, you know, people growing up on the frontier and they're always, you know, waiting for the Sears and Roebuck catalog to show up and then they order stuff. And, and so Julius Rosenwald made a lot of money through that, but very much believed in the idea of charity and wanted to form relationships. And so Julius Rosenwald was a very wealthy man that kind of could have gone the way of Carnegie and Rockefeller, which was kind of a more removed, you know, scientific, like, you know, maximum impact approach.

00:29:42.90
AROB
And he was known throughout his entire life as being—you know, he would visit the—he built a lot of schools for African-Americans just like Catherine Drexel did and in, you know, poor communities, but he always made a point of like visiting the schools that he built and he was kind of where we get this idea of matching gifts. And so Julius Rosenwald would rarely ever just give the money that was needed to build a school—he would give part of the money and then he would say, "If the school is going to be built or this hospital, then it's going to require input and investment from the whole community." You know, not just the other wealthy people in the community, but also the poor.

00:30:26.23
AROB
He really challenged them to help support and build these, you know, infrastructure systems. And so Julius Rosenwald was, you know, not from a Catholic standpoint, certainly from a faith standpoint.

00:30:39.23
AROB
But he felt like, you know, "You can't practice true charity if you never meet the people that you're ultimately trying to help."

00:30:49.75
AROB
So a lot of really interesting people in this time.

00:30:50.23
Host
Interesting.

00:30:53.16
AROB
And then that takes us kind of up to more or less like, you know, World War I, World War II phase, kind of early 20th century.

00:31:01.84
Host
Well, I want to interject kind of the late 19th—well, late 1800s and the end of the century.

00:31:15.66
AROB
There you go. Nailed it. Mm-hmm.

00:31:16.97
Host
We did a newsletter article in our Raise the Church newsletter earlier this year, after reading where Pope Leo was elected. We looked back at what was philanthropy like last time there was a Pope Leo, which was the 1890s. And a couple of things that stand out—just I think we even mentioned it on the show here, one of the episodes a little bit.

00:31:35.32
Host
There were a couple of things that—a big thing back then was charity bazaars. So basically craft shows where to raise money. And they ended up having to add cigar lounges to the craft shows to attract the men.

00:31:48.09
Host
Because a lot of times the men were the ones in control of pocketbooks at the time. So it was kind of a fun thing. And then the other thing that stood out to us as we were reflecting back on it was the pew subscriptions where you go pay a monthly rate and get your spot saved in that pew at church.

00:32:02.77
Host
We're bringing those back. I think that's going to be a big push going forward here. Fundraising for our parishes.

00:32:09.56
AROB
Yeah, that's right. I'll buy the pew in the back for me and my kids. That's where we like to be.

00:32:16.38
AROB
Yeah, so exactly. I mean, that's, you know, the philanthropy was evolving, was changing, and they were kind of constantly looking for like, "All right, how do we make this enticing for people to give even within the, you know, sort of the confines of the church?"

00:32:37.65
AROB
Okay, so that takes us up to kind of more or less World War I. After World War I—after World War II, is when we saw this—you know, if we're kind of keeping track of major shifts, I would say, you know, we've got the practical philanthropy, we've got the scientific philanthropy, and then...

00:32:55.57
AROB
I don't know what to call this phase. Maybe it'll come to us as we're talking through it. But after World War I—after World War II, and particularly, is when—or after World War I, excuse me—we had the country went through this thing called the Great Depression, right?

00:33:13.82
AROB
And the Great Depression was something that affected everybody.

00:33:17.42
AROB
Right, you know, wealthy people lost all their money in some cases. People that were barely hanging on at the, you know, sort of the lower end of the socioeconomic status, you know, had no work and lost everything. And so the government then, through, you know, under the leadership of Franklin Roosevelt in the 1930s, you know, he was elected to really sort of bring some of these liberal ideologies of the, you know, "the government needs to help people that are struggling," right, that without judgment—there's no working poor, there's no lazy poor, poor are poor and they need to be helped regardless. And so that was when in the 1930s when we had the implementation of, you know, a couple of laws that ultimately, you know, later in life are now called the New Deal, right?

00:34:06.08
AROB
So you had—let me get the names of some of these laws that were passed.

00:34:12.22
AROB
So you had the Emergency Banking Act in 1933, you had the Civilian Conservation Corps in 1933 as well, the Works Progress Administration in 1935, and then the one that, you know, kind of capped it all off was the Social Security Act of 1935.

00:34:28.61
AROB
And that was really where the government stepped in and said, "People that are on the fringes, the most vulnerable are the ones that the government now has a responsibility to take care of with our tax money."

00:34:42.92
AROB
And so that was where, you know, Social Security Administration came to help people on the later end of life after they could work. You know, the implementation of unemployment insurance. So if you're out of work, you know, you can go and get money through the unemployment agencies. People that are children that are struggling. You know, this is where—I don't know if this is necessarily when Medicaid started, but basically this idea of like "children need health care."

00:35:09.14
AROB
And so the government is going to step in and provide health care and care for children. And so, you know, the 1930s was another shift in our philanthropy.

00:35:19.73
AROB
Because you had a mentality shift of a couple of things. One, hey, the government's now getting involved. So, you know, ways that churches, ways that local communities—you know, Red Cross was founded after Civil War, you know, organizations like that—that they provided direct support to people.

00:35:39.49
AROB
Now, a lot of the people that would normally be coming to them for help were now going to, you know, the unemployment office or the Social Security office or, you know, some agency of the government for that support.

00:35:51.57
AROB
And so it kind of gave a little bit of a—it kind of gave a little bit of a—not an identity crisis, that's like way, you know, over-exaggeration of it, but like, "All right, what should nonprofits be focused on?"

00:36:07.42
AROB
And it wasn't necessarily care. So it kind of sort of almost magnified this need to move into even more impact-driven—you know, in the charity versus philanthropy mindset, the philanthropy, right? So how do nonprofits invest more in the systems as opposed to the care? And so that was, you know, that sort of started in the 1930s with the New Deal and is continuing on today.

00:36:33.50
AROB
Some of the people that were involved in some of this were John Raskob. We talked about him, right?

00:36:39.55
AROB
John Raskob was born 18... and nineteen—

00:36:45.37
Host
1879, I believe.

00:36:47.16
Host
He was, yeah, who's an adult going into the early 1800s.

00:36:51.12
Host
Automobiles are coming out. Yeah, DuPont going into World War I. Yeah, and then he was a...

00:36:55.32
AROB
Do you remember, so Raskob was working for GM, right? First he worked for DuPont, and then he worked for GM.

00:37:00.57
Host
Yep.
00:37:01.89
AROB
Do you remember what Raskob, the idea that he had that kind of made GM the main player in car sales?

00:37:10.35
Host
I want to say it was—was it lending?

00:37:12.50
AROB
It was. It was GMAC. Remember? The GM something.

00:37:14.64
Host
That's right.

00:37:16.44
AROB
But it was basically where people could start buying cars with payments on credit versus needing to have the money to buy a car. So that really, you know, changed GM. It changed...

00:37:27.67
AROB
But it was driven by this idea, you know, from Raskob, not just how do we make more money for GM, but, you know, if more families had cars, then more people could get work and more people could take care of themselves and there could be more, you know, sort of benefit to the family if more people had cars. And so it was very much a, you know, not just an economic decision, but also Raskob, who was a very devout Catholic,

00:37:55.24
AROB
You know, was part of that. So, you know, Raskob grew up, you know, sort of witnessed this shift, was part of it, and then in the 1940s—excuse me—built Empire State Building along with Al Smith, and then sold that and ultimately started the Raskob Foundation, which has given away—I think it's over $200 million—to Catholic organizations all over the world. So that was sort of part of that.

00:38:22.02
AROB
One other episode I want to talk about is 1914. This guy, Frederick Goff in Cleveland, started the Cleveland Foundation. And so now we have community foundations, you know, all over the country.

00:38:35.33
AROB
And probably all over the world, but it all started in Cleveland in 1914. And his idea was, "How do we allow people both when they're living and when they're deceased—after they've passed away—to help people in need?"

00:38:52.63
AROB
In a strategic, scientific way. And in a collective way. And so the Cleveland Foundation was the first place where people could either give their money or they could leave their estate after they died.

00:39:04.92
AROB
That money got pooled into one sort of single massive fund, and then the Cleveland Foundation would make grants to organizations that were in need of funding so that they could carry out their good work.

00:39:18.26
AROB
And so they were founded in 1914, 1919, they started making their first grant. I don't know who their first grant was to—that would be interesting. It was $40,000 for their first grant.

00:39:30.73
AROB
And then—but by 19—Goff passed away in 1923. And by 1923, there were over 75 or 74 community foundations across the country that were all modeled after this Cleveland Foundation.

00:39:46.42
AROB
So that was, again, like we're shifting—we just continue to shift into more of a scientific impact, return on investment approach to fundraising and philanthropy, or I guess on the philanthropy side.

00:39:59.71
AROB
And so that was just kind of as the country grew and changed and all these incidents happen is where philanthropy continued to evolve.

00:40:07.63
Host
Interesting. And then that kind of brings us up to roughly the modern-ish age, right?

00:40:14.14
AROB
Yeah, and I think the biggest shift now is—I don't know where this started. Maybe we can kind of dig into this in a later episode. But you had the professionalism of giving money away, right?

00:40:29.54
AROB
The community foundations, scientific philanthropy.

00:40:32.48
AROB
You know, Rockefeller hired this guy to manage his philanthropy. But you didn't have a professionalism of the fundraising process—the getting money side of it—at this time.

00:40:42.58
AROB
It's really, you know, in probably the last 40 years, probably since like the 1980s, that fundraising has really become a profession all on its own.

00:40:54.34
AROB
In fact, when I was in grad school—this was 2005, 2008—I remember one of my papers I had to write or one of the class discussions was "Is fundraising a profession?"

00:41:08.10
AROB
And, you know, even, you know, we were debating that amongst fundraisers.

00:41:12.53
AROB
And it was really because it was, "Well, what makes something a profession versus a vocation versus, you know, anything but just a job?" And it was, "Well, is there professional associations? Is there professional training?"

00:41:24.67
AROB
"Is there, you know—can you go to school to earn a degree in this? You know, are there metrics that are, you know, outside of individual organizations?" And so, you know, we had good, healthy debates about this, but the idea is that, you know, it's only recently that the profession of fundraising has really transformed.

00:41:44.45
AROB
And now, you know, I mean, Petrus is a good example of that, right? We have courses that people can log in and take. We do the podcast to help, you know, professional fundraisers get better. And so we've continued to evolve now into, you know, this new phase of philanthropy, which is not just scientific philanthropy, impact-driven business giving, but now scientific and strategic fundraising practices that maximize the benefit and the impact of a nonprofit by implementing best practices on the fundraising side.

00:42:19.44
Host
I like that. Any topics to explore—we're in this kind of modern fundraising age? Maybe it's one that we're most familiar with.

00:42:28.86
AROB
Yeah, so in 1910—I think is when Gates and Buffett signed the giving pledge.

00:42:39.40
Host
Probably 2010.

00:42:39.53
AROB
So the 19—what did you say? 2010? Sorry. 2010.

00:42:42.18
Host
2010 instead of 1910.

00:42:43.99
Host
We're both off in our centuries.

00:42:44.42
AROB
1910, 2010. So in 2010 is when Gates and Buffett signed the giving pledge. And that idea was that billionaires that signed the pledge committed to giving half of their wealth away to nonprofits or away before they died.

00:43:05.38
AROB
You also had—what was his name? Chuck Feeney, who was the founder of the duty-free stores and became a billionaire, I think, but he—all his life or all his professional life for sure—he sort of covertly would make grants and give money away. And he lived by this mentality of "giving while you're living."

00:43:22.62
AROB
And so, you know, there's definitely been a shift now since 2010—sorry—of, you know, there's certainly some like social credit that people build up by giving money to charity and hosting balls and, you know, doing all these other things. But, you know, this idea of "if we—what are you going to do with all of your wealth?" Right? At some point, you know, a billionaire being a billionaire—you just can't spend all that money. What can you do with it instead of, you know, "wasting it" or living, you know, in such extravagance when there are people that are struggling? Let's be intentional about giving this away. So certainly since 2010 and more recent years, so, you know, you've got MacKenzie Scott, you've got, you know, a lot of very wealthy individuals who are giving away massive amounts of money.

00:44:32.17
AROB
It's interesting. I just recently read "The Generosity Crisis" by Nathan Chappell, which is really good, but he, in that—I didn't realize this—but Mark Zuckerberg and his wife, Michelle?

00:44:47.20
AROB
Mark Zuckerberg and his wife—let's put a pin in her name for now—they, instead of starting a nonprofit foundation to put their money in, they actually started an LLC.

00:44:59.06
AROB
And the LLC has the—that's why I was trying to remember her name because the LLC is named after their two initials.

00:45:06.07
AROB
It's like the CZ company, corporation. But it's an LLC where they put all their money. And the reason they did that is because they are not sort of governed in how they spend that money by the rules that the IRS and the government puts on private foundations.

00:45:25.74
AROB
So they don't have to file 990s.

00:45:27.53
AROB
They can give money to political organizations or political causes without really any—you know, the foundations have to be careful about that. Charities have to be careful about that.

00:45:38.79
AROB
So they started this LLC that they are using as their philanthropic arm, which is really fascinating. So it will be interesting to see like—are we moving into, you know, are we kind of like, you know—are wealthy people like so enlightened now that they've like, you know, superseded this idea of even scientific philanthropy and now are going outside of the philanthropic—you know, sort of the common philanthropic channels—to avoid some of the restrictions that have been put on by government, by whatever that is, to this kind of new phase of philanthropy.

00:46:33.57
Host
Priscilla Chan.

00:46:40.34
AROB
Priscilla Chan. Yeah. So Priscilla Chan and Mark Zuckerberg, and I think it's the CZ company or CZ corporation that is their LLC. And so they've signed the giving pledge. They're committed to this, but they're approaching it in a different way.

00:47:12.82
AROB
Anyways, the Chan Zuckerberg Initiative. That's right. So it's actually not a nonprofit. It's not a foundation. It's an LLC.

00:47:24.58
Host
Very interesting. Yeah, it'd be interesting to see where that goes.

00:47:28.22
Host
Good. Any other kind of thoughts on just the broad strokes here of the history of American philanthropy?

00:47:34.39
AROB
Yeah, I think that, you know, America is unique in really all of history for having, you know, such a—Petrus, we have clients that are outside of the US. I talk with people all the time that are, you know, from Europe or from Australia or whoever who are in the field of philanthropy.

00:47:57.20
AROB
But it's just—it's very, very different in the United States, philanthropy and charities, versus other places in the world. And, you know, there's only so many—you can only chalk that up to like, "Oh, the American spirit," you know, and like so many times before you're like, "Okay, well actually, why is that the reason? Why is America so different when it comes to philanthropy? Why are our laws set up differently? Why are people's mentalities about giving so different?"

00:48:25.73
AROB
And I think a lot of it just goes back to, you know, how is America founded? It was founded in a very resource-rich continent that was struggling for independence from a country, a leader that they didn't want to be restricted by. And the way that they were going to make it was that they don't consider those resources to be just the property and the right to use of the individuals that found it first. It was, "Hey, we're in this together. We have to make it as a community. Otherwise we won't make it."

00:49:06.77
AROB
And that mentality just has stuck for 250 years and, you know, longer than that. And I think it's just sort of—anyways, it's just fascinating to like go back and then, you know, along the way there have been people that have stepped up either for right or for, you know, selfish reasons, whatever it is, you know, whether you're looking at Carnegie or Drexel or John Raskob or whoever it is, right, that have like perpetuated that "No, we are a philanthropic country. We are a country that prioritizes generosity and prioritizes community."

00:49:43.98
AROB
And that's continued and it's taken, you know, it's evolved into these different stages and phases and looks and, you know, what do they say? You know, things change and yet they stay the same. Right.

00:49:55.86
AROB
And so it's just this, like, you know, it's a great country to live in. We were—we're very blessed to live in the country we are. But we're great and we're blessed because we have opportunities to live out that call of generosity, whether that's, you know, "I just want to do good and, you know, be a good citizen," or whether that's "you know, I'm living out what the call that Christ, you know, gave us to care for the least of those among us." Whatever the sort of motivations or reasons are, that's how we've maintained such a strong country, I think, you know, over time. And I hope that it continues in whatever, you know, evolution we see over the next decades and centuries.

00:50:43.64
Host
Yeah, I mean, it definitely is unique. I work with a number of different charities and nonprofits in Canada, and I'm not even sure that the philanthropy is that much different.

00:50:55.56
Host
Kind of the numbers show that it's maybe slightly smaller scale than the US, but kind of scaled to the population size of Canada. It's not dramatically different, but the mindsets toward philanthropy and even the perception of the collective mindsets toward charity are very different than in the US.

00:51:12.23
Host
So when you talk to people there, it is just very different outlook on how everybody approaches charity and giving. It's kind of a more top-down approach rather than maybe a bottom-up approach.

00:51:20.36
AROB
Yep.

00:51:25.22
AROB
Yeah. Yeah. And I think that, you know, hopefully the US maintains that bottom-up, you know, mentality. And I think that we, you know, we see it is really encouraging that, you know, again, there's motivations, there's social credit, there's all of that. But, you know, when you see people that are—that have reached celebrity status, whether they're athletes, whether they're, you know, business icons, whether they're entertainers, whatever.

00:51:53.76
AROB
And sort of baked into everything about their persona and who they are is this idea of "they're still helping other people. They're still giving back in some way, shape or form," right?

00:52:06.99
AROB
Whatever that, you know, motivations are, that mentality of "giving back is good. Generosity is good," is a really powerful motivator for future generations. And so I think that that's, you know, something to continue to support both on the macro level, you know, with these, you know, sort of national approach to generosity and even more so on the micro level of "how do we live out generosity in our own lives and our own families and inspire our kids to want to be generous and give back and help those in need."

00:52:42.81
Host
Well said.

00:52:44.92
AROB
Great. That's all I got.