PHILANTHROPY IN AMERICA POLITICS AND SOCIETY IN TWENTIETH-­CENTURY AMERICA Series Editors William Chafe, Gary Gerstle, Linda Gordon, and Julian Zelizer A list of titles in this series appears at the back of the book PHILANTHROPY IN AMERICA « « « A HISTORY « « « OLIVIER ZUNZ Princeton University Press « Princeton and Oxford Copyright © 2012 by Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TW press.princeton.edu All Rights Reserved Second printing, and first paperback printing, with a new preface by the author, 2014 Paperback ISBN 978-0-691-16120-4 The Library of Congress has cataloged the cloth edition of this book as follows Zunz, Olivier. Philanthropy in America : a history / Olivier Zunz. p. cm. — (Politics and society in twentieth- century America) Includes bibliographical references and index. ISBN 978- 0- 691- 12836- 8 (hardcover : alk. paper) 1. Charities— United States— History. 2. Nonprofit organizations— United States— History. 3. Humanitarianism— United States— History. 4. Endowments— United States— History. I. Title. HV91.Z86 2012 361.70973— dc23 2011017479 British Library Cataloging- in- Publication Data is available This book has been composed in Minion Pro and Univers Printed on acid- free paper. ∞ Printed in the United States of America 3 5 7 9 10 8 6 4 2 To the memory of my friend Stephen Innes (1946– 2005) CONTENTS Acknowledgments ix Preface to the Paperback Edition xi Introduction 1 Chapter 1: “For the Improvement of Mankind” 8 Chapter 2: The Coming of Mass Philanthropy 44 Chapter 3: The Regulatory Compromise 76 Chapter 4: The Private Funding of Affairs of State 104 Chapter 5: From Humanitarianism to Cold War 137 Chapter 6: Philanthropy at Midcentury: “Timid Billions”? 169 Chapter 7: Investing in Civil Rights 201 Chapter 8: In Search of a Nonprofit Sector 232 Chapter 9: American Philanthropy and the World’s Communities 264 Conclusion 294 Notes 301 Index 351 ACKNOWLEDGMENTS My heartfelt thanks go first to an extraordinary group of dedicated people at the Ford Foundation. Barry Gaberman, Susan Berresford, Christopher Harris, and Alan Divack recognized in the early formula- tion of this book my ambition of telling philanthropy’s contribution to American democracy and helped turn the idea into reality. I am grateful also for the support I received from the W. K. Kellogg Foundation and the Charles Stewart Mott Foundation. The Hagley Museum and Library made it possible for me early in the research to spend a summer explor- ing the Pew Charitable Trusts’ records in the Soda House on the banks of the Brandywine. At the University of Virginia, my long- time academic home, my col- leagues on the committee that oversees the Bankard Fund for the Study of Political Economy have shown much confidence in this project and provided funds over several years. So has the Institute for Advanced Study in Culture, the haven for scholars that James Davison Hunter has so ably created. Very talented students have taken an active role in this work. They have helped research and interpret the appropriate sources. I feel privi- leged to have worked so closely over the years with Andrew J. F. Mor- ris, Derek Hoff, Christopher Loomis, Christopher Nichols, and Daniel Holt, while they were earning their doctorates in history at UVA. Jordan Berman and Brent Cebul also have aided the research. At my second academic home, the École des Hautes Études en Sci- ences Sociales in Paris, I have tried out every idea for this book during my annual presentations to the American history seminar run by Pap NDiaye, Cécile Vidal, and François Weil at the Centre d’Études Nord- Américaines. IX X ACKNOWLEDGMENTS Sustained exchanges with Kim Gould Ashizawa, Arnaldo Bagnasco, Dwight Burlingame, David Hammack, Steven Heydemann, Richard John, Stanley N. Katz, Ira Katznelson, James Loeffler, Eleanor W. Sacks, Holly Cowan Shulman, Nancy Summers, Francis X. Sutton, Thomas Troyer, Joshua Yates, and Philip Zelikow have improved the work dra- matically. Julian Bond has shared with me family papers from the days his father Horace Mann Bond worked for the Rosenwald Fund. Flavio Brugnoli, Piero Gastaldi, and Mario Gioannini at the Compagnia di San Paolo in Turin have followed this research with a sustained interest in the American experience. At Princeton University Press, Brigitta van Rheinberg not only recognized this book early on as one she wanted to publish, but also provided excellent advice on the manuscript. So have two anonymous readers for the Press. Eva Jaunzems has contributed her remarkable copy editing skills. I owe a very special thanks to three long- time close friends. Nicolas Barreyre, Arthur Goldhammer, and Charlie Feigenoff have taken much of their valuable time to review my manuscript in minute detail and have encouraged me to reformulate my ideas as often as needed. Christine, our children Emmanuel and Sophie, and our two splendid grandchildren Henry and Lila have shown much pa- tience with me, each in their own way, as I have completed this work. It is customary but also appropriate to add that deficiencies that re- main are my own. Olivier Zunz Charlottesville, Virginia Spring 2011 PREFACE TO THE PAPERBACK EDITION My ambition for this book has been to draw out, as fully as I could in a single volume, philanthropy’s special role in shaping the “American century,” both at home and abroad. In retracing the large and cumula- tive impact that private gifts have had on national affairs, I examine the ways philanthropic commitments have enlarged American democracy. They have not only been a powerful means of expanding knowledge, promoting social movements, and formulating public policy, they have also given Americans of diverse conditions a stronger voice in defining the common good. I begin my account in the late nineteenth century as the growth of philanthropic institutions mirrored that of the United States’s increasing economic power and influence on the world scene. Participation in this expanded philanthropy, however, was never the exclusive domain of the wealthy as it is too often portrayed or imagined. Americans of modest means were actively involved too. Philanthropy’s various components combined into a powerful mix of fiscally-privileged institutions (and procedures) that Americans of different ideological persuasions have since adapted to their strategies of social change. Wealthy donors created foundations to administer large gifts. They gave also a massive boost to the modern research uni- versity that orchestrated the reorganization of knowledge propelling the country’s ascent to world power. A few reformers engineered a silent, but still evolving, legal revolution that granted trustees the power of broadening donor intent by adjusting it to changing circumstances. At the same time, the emergence of a federated mass philanthropy, based on innovations in fundraising techniques, involved an ever greater part of the population in supporting the public good. World War I provided an added impetus to mass philanthropy and in particular marked a XII PREFACE TO THE PAPERBACK EDITION commitment to public health and humanitarian aid overseas, making philanthropy abroad both an adjunct and a challenge to the Pax Ameri- cana. The federal government, with expanded revenue from the income tax, put in place a legal and regulatory structure to support philanthropy by granting all givers a fiscal exemption, the terms of which we are still arguing. The regulatory state and profit-driven capitalism became then the lasting partners of a heterogeneous philanthropic enterprise that re- juvenated voluntarism in America as large numbers of givers, reform- ers, volunteers, and recipients, acting in opposition as often as in con- cert, began promoting causes bigger than any of them had heretofore envisioned. Not unlike a committed fundraiser who seeks to combine support from many different givers, I focus in this book on how philanthropic institutions overlap rather than attempt a specialized history of each kind. Organizations with similar sounding names come in an array of legal arrangements and operational structures. Thus a “foundation” typically offers grants, but some run their own programs as well. Some foundations are small, family affairs with limited funds, while others are large and wealthy impersonal organizations. Their reach is very dif- ferent. The same heterogeneity characterizes public charities supported by multiple donors, whose divergent opinions in principle guarantee democratic debate over their activities. Some public charities, however, have only a few funders who are often related. The government grants public charities a fiscal status tolerant of political lobbying otherwise restricted in tax-exempt organizations. Rather than treating these insti- tutions separately, my emphasis is on how they have joined to support large social movements, whether it be the legalization of birth control or the spread of evangelical Christianity. I have meant to give a critical view of the ways the philanthropic system has intersected with government and influenced policy in the United States for more than a century. The government has had the dif- ficult role of serving simultaneously as the regulator of philanthropy that has limited its political engagement and a partner in multi-level PREFACE TO THE PAPERBACK EDITION XIII campaigns mobilizing the joint forces of state and civil society. This rela- tionship with government has generated the most important ambiguity at the heart of the philanthropic enterprise. To fulfill their avowed mis- sion of improving mankind, liberal and conservative philanthropic ac- tors have time and again had to cross the regulatory line and engage in major political battles. I have therefore given ample voice to those who fought such philanthropic/political wars. I have shown that the many (not always well-intentioned) attempts to keep philanthropy away from politics have led only to maneuvers on the part of donors and recipients alike that have brought the art of equivocation to new altitudes.