The New Era in Giving

by F. EMERSON ANDREWS

THE old Scotsman was dying, reports a book published in London in 1880. He summoned the minister to his side. “Will I be placed among the elect,” he whispered, “if I leave ten thousand for Free Kirk sustentation?”

The canny minister replied, “ It is an experiment well worth trying.”

To nearly all people at all times, giving has seemed “an experiment well worth trying.” Motives have varied. The Roman emperors gave bread and circuses to keep down insurrection. Some people give to have their names displayed on contributors’ lists, or to build up their self-esteem, or — like the Scotsman as a matter of personal fire insurance. Always, many people have given out of pity and a deep sympathy for their fellow man.

But the rules have changed, some of them within the past few years. Whole large groups of persons, who used to be a first charge upon our charitable purses and impulses, are now taken care of (not always adequately) under the Social Security Act, passed in its first form in 1935. Contributions to endowment funds used to be an effective way of helping schools, hospitals, and similar institutions; with the recent radical decline in interest rates, this form of giving needs rethinking. Surtax rates on individual income have in the past four years reached heights which would have seemed completely impossible a decade ago; this is affecting the stream of giving in several quite diverse ways which will bear examining.

At the same time, the critical attitude of our age of science makes us examine the practical results of our gifts with much more care than had been our custom. We have had an extensive examination of foreign missions. We have hospital surveys, appraisals of all sorts of welfare institutions. The purpose of all these studies is to make our giving more effective; but its first result on us as individual givers is to make us aware that giving is a dangerous business, where sometimes more harm than good may result. Many of us are honestly confused. How much should we give, where, how? The rules have changed so drastically, in the past few years, that we see chiefly the difficulties in this new era in giving and overlook its high promise.

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WHO gives, and how much?

Some years ago I was walking through the Great Smoky Mountains in I ennessee. The depression was in its blackest depths, and a government program was making small allotments to impoverished farmers for seed, stock, or needed improvements. I met one of the government agents, who had just returned from a mountain woman who, all alone, managed somehow to scratch a living from her two acres.

”If the government could allot you two hundred dollars, what would you do with it?”

The woman thought a moment. Her cabin had no floor but the packed earth, and light came through chinks in its wall. Finally she said:

“Reckon I’d give it to the poor.”

The generosity of the very poor is not only proverbial: it is a much larger part of the total philanthropic picture than is generally believed. Reliable, detailed statistics on giving do not exist, but figures available from income-tax reports are complete enough concerning individual giving to be significant, and are highly interesting.

In 1941, which may be regarded as the last pre-war year if we forget December, reported charitable contributions totaled just a billion dollars. More than half this billion — 554 million — came from families whose income was estimated at less than $3000, To this 554 million dollars needs to be added the unknown but considerable contribution of those many other families with income below $3000 who used the short form 1040A, which does not. list charitable contribut ions.

Percentagewise, the income group under $3000 contributed at a rate substantially above the general average of 2.1 cents on the earned dollar. The middleincome families, from $3000 to $10,000, were the poorest contributors, no such group averaging as much as 2 cents on the dollar. Above $10,000, the rate of contribution rose steadily, to a high of 6.8 cents on the dollar for the two persons with incomes reported at above 5 million dollars; but it must be remembered that a mounting proportion of the contributions of these groups would have been taxed away in any event.

Lately, cannily recognizing the high-surtax situation, some fund collectors have been going up and down the land asking us to contribute because it will cost us practically nothing, most of it being deductible from income tax. I have no doubt this is an effective appeal, which has collected much money; but to ask for a gift because it costs us practically nothing approaches the all-time low in charitable motive.

I have private information that the Recording Angel enters in the gift column only those dollars we could have kept for ourselves. By such an accounting, the poor give out of their poverty a larger part of each dollar than any other income class. By any accounting, the amazing fact remains that, of the total dollars contributed by individuals for charitable purposes, considerably more than half come from families with income below $3000.

Individual contributions are the most important but by no means the only resource of philanthropy. Income from endowment, bequests, foundation expenditures, corporation contributions, are other large items. Complete information is nowhere available, but for a broad picture of what private philanthropy had to spend in one recent year, the estimate prepared for the Russell Sage Foundation’s study of American foundations for social welfare may be worth looking at: —

These figures are merely approximate, and doubtless vary considerably from year to year. If they are assumed to he reasonably accurate, the sources of the American philanropie dollar today are approximately these: individual contributions, 76 cents (with only 13 of these cents coming from individuals and families with annual income of $5000 and above); charitable bequests, 4 cents; corporation contributions, 3 cents; income from charitable endowment, not including foundations, 15 cents; from foundations, 3 cents.

At lirst sight, the total of 2.7 billion dollars is impressive, bul it fades somewhat w hen we begin comparing it with the amounts we have been spending in other directions. For instance, we spend annually nearly as much for tobacco alone — 2.4 billion dollars in 1942 according to Department of Commerce reports; we spent nearly twice as much for alcoholic beverages, 5.2 billion dollars in 1942; and our 91.2 billion dollars war expenditure during 1944 would have kept our private charities going for the next thirty-four years!

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WHERE and how we give may be at least as important as how much. Here, too, we are in a period of great change, some confusion, and fresh opportunities which are often overlooked.

Observe the sweeping historic shifts. In early, agricultural societies, giving was usually direct, from one individual to another. The Old Testament is full of admonitions to leave the corners of the field ungleaned, and “when thou beatest thine olive tree, thou shall not go over the boughs again: it shall be for the stranger, for the fatherless, and for the widow.” Gifts were for elemental needs, chiefly food and shelter. Gifts for the gods, which might be established at as much as a tenth of one’s produce, were likely to be in the form of sacrificial offerings, from which the priests could take out their livelihood.

From about the time of Constantine, through the Middle Ages and almost up to the present, the church received nearly all the charitable contributions and was almost the sole almoner. It tried to minister to the same elemental needs, and added schools and some hospitals. In the age of science, with which the church was at first in frequent conflict, many of these services began to drift toward secular control. The battle for tax-supported public education was won about a century ago. After 1900, privately supported “charity organization” societies, associations for the cure or prevention of this or that, multiplied like rabbits, and were finally brought into some coordination by community chests.

We are once again in the very center of a great swing in the auspices of charitable care. This time it is toward government. A quarter of a century ago, in the pages of this magazine, Cornelia J. Cannon¹ expressed a desire for the day “when our philanthropic obligations will he brought to our attention, not by an appeal from boards of directors, but by a tax-bill from the properly constituted authorities. Within the past ten years a considerable part of her dream has come true, with more on the legislative calendars.

The greatest stride in this direction was the Social Security Act, first passed in 1935 but broadened by later amendment and still needing considerable improvement. It does not by any means provide the cradle-to-grave security sometimes advertised, and this is scarcely the place to discuss its broad programs for unemployment insurance and old-age and survivors’ benefits, already in operation, or the new proposal for health insurance urged upon the Congress by President Truman. Where it touches still more closely t lie traditional field of “charity is in its provisions, in which the states participate, for these three groups: the needy aged, the needy blind, and dependent children. The Social Security Board recently reported that payments are now being made to some 2,800,000 persons in these groups, at the rate of $845,000,000 a year.

Consider: in just these three programs, nearly three million persons who would have been first charges upon our private giving are now being taken care of (not always adequately) under government auspices. Moreover, an estimate shortly to be published by the Twentieth Century Fund in a general study of America’s Needs and Resources will state that of all expenditures for social welfare purposes, the government in 1942 accounted for about 90 percent.

These are broad generalizations, which considerably oversimplify the history of giving. I have omitted many exceptions, reservations, and disputed points, for fear that attention to back eddies and crosscurrents might hide the powerful sweep of the main stream toward changed conditions and fresh needs in individual giving.

Person-to-person giving has not died; and for some emergencies and for some delicate situations it is the only effective form that giving can take. But we have learned that the Thanksgiving basket for the poor family and the nickel in the blind man’s cup are cheap sops to our own uneasy consciences, and not effective helps. Tax funds will now supply the elemental needs of food and shelter. What today’s blind man needs from us is help in finding a job the blind can do, not so much for financial rewards as for the deeper satisfactions of being once more a useful member of society. What tomorrow’s potential blind need from us is, perhaps, a scientifically based blindness-prevention program begun today, to include accident prevention, eye examinations, and suitable medical care.

Large contributions to and through religion are continuing, and most of us agree that they should. How large that portion now is, no one really knows, for certain important branches of the church decline to furnish any figures. Some estimates place the share we still give to religion at slightly above half of all private philanthropy, with the remaining fortyodd per cent divided nearly equally among three other large fieldshigher education, personal or organized charity, and health services. But modern church budgets begin to reflect influences of the new era in giving. A generation or two ago an average church budget concentrated on these three items: support for the individual church, including the pastor’s salary; the parish poor; a small sum for home and foreign missions. The church to which I now contribute includes in its budget, among many other unusual items, an employment service, a paid social worker, and a nursery school to which working mothers may bring their children, of whatever race or religion.

Similarly, privately supported associations and societies are recognizing the new era in giving by changed programs. With the government already supplying funds for primary necessities far beyond the amounts they could ever collect for such needs, a large share of their funds may now be devoted to purposes other than direct relief. True, they must still take care of gaps in the government programs, and special situations. But more than a decade ago the family service societies coined an illuminating slogan, expressing the new program : they were interested, they said, “not so much in helping people in trouble as in helping people out of trouble.”

If we may broaden this phrase into also helping people to avoid trouble, and helping them to realize their own full capacities for work and play and growth, then we have begun to define the opportunities —and the difficulties — of the new era in giving.

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How can we accomplish this crereative sort of giving?

1 h;' rules are much more complicated than in simple giving to satisfy an immediate physical want. In material production, we went from the hand chisel to the marvels of mechanical engineering. In giving, we are going from the handout to the principles of a new human engineering— the effective use of power in man and for man.

American foundations are a spearhead of this new era in giving. I hey are, however, a much smaller spearhead than the public imagines, wilh resources quite inadequate for the opportunities of our day. I’he Russell Sage Foundation survey reports 505 foundations with assets estimated at 1.8 billion dollars and total 1944 expenditure of 72 million dollars.

Three possess capital assets above 100 million dollars. According to recent statements, these figures are;

Twenty-six others report assets of 10 million dollars or more, and an additional seven, which decline to report their assets, are believed to fall within this range. The thirty largest foundations concentrate about 87 per cent of the assets of the whole half thousand; but all foundations together have for spending, as we have already seen, only about 3 cents out of the average dollar of private philanthropy.

However, the foundation is the only giver which has been organized for the sole purpose of making giving a science; which devotes full and continuous time to this art and science; and which is usually blessed — if it be a blessing — with the extraordinary gift of perpetual life. What the 3-cent giver has learned to do with his money should therefore be of unusual interest. It will not be strange if we should discover early in the history of the 3-cent giver some of the new trends which are only now becoming apparent, and possible, for us 97-cent givers.

Most foundations early decided against distributing their resources to relieve individual need.

Such need, it was felt, was so humanly appealing that it could better be met by general charitable contribution, and perhaps eventually from voted tax funds; the modest resources of foundations should be employed in longer-range, more difficult projects which would not usually appeal to individual givers. Andrew Carnegie not only established several of the most important early foundations; he dramatized the foundation idea more than any other man of his time. On this point of the use of funds he was saying as early as 1889, " The best means of benefiting the community is to place within its reach the ladders upon which the aspiring can rise.” The 2811 library buildings which he had given by the time of his death in 1919 were one form of brick-and-stone materialization of these “ladders” for the aspiring.

More was needed than ladders: discovery. By 1902, when Carnegie established his first important foundation, the Carnegie Institution of Washington, he gave as its purpose “to encourage, in the broadest and most liberal manner, investigation, research, and discovery, and the application of knowledge to the improvement of mankind.” Discovery discovery in the physical sciences, discovery in the biological sciences (particularly medicine and public health), discovery in the social sciences — has been the keynote for most of the great foundations which followed. Small grants have sometimes brought spectacular achievement, of which the Rockefeller grant of $1280 which started penicillin development is only one recent example.

Exciting as some of the accomplishments have been, serious gaps exist, and persons close to foundation programs are the last to feel contentment. In all these fields, funds have been pitifully inadequate; in the social and economic sciences, far too little has been even attempted. Said the late Frederick Keppel, president of the Carnegie Corporation of New York: “The average man is far from comfortable in the presence of any deep-lying social problems, and in no mood to contribute towards their solution by supporting the very steps he extols when they are applied to problems in the natural sciences.” The’ trustees of a very few foundations have managed to overcome this discomfort, and their foundations are delving into some of the deeper problems amid angry shouts from those who do not like the facts they pull up.

Bui placing ladders and making discoveries are not enough. Particularly in the social sciences, a discovery or a social invention cannot be put to use until many people (a majority of the voters, if it involves legislation) know about it and approve it. Many foundations are therefore adding to their programs public education— the task of bringing existing knowledge into wider understanding and practical use. This may be done by varied means publications, lectures, consultations, health demonstrations, scholarships, radio, forming associations, and many others. These arc the three chief areas of foundation activity: the “placing of ladders” for the aspiring to rise; scientific research, with discovery its objective: and public education, to bring our existing knowledge into practical use. No one who has examined the programs of several hundred foundations, and worked intimately with several of them, is likely to deny that foundations make mistakes, labor at a mountain and occasionally bring forth less than a squeak, must always work hard to avoid the dangers of senescence, and in a few instances appear to be nothing better than a device for avoiding luxation, without any attempt at a program for the social welfare. But their total record is astoundingly good. For all the inefficiencies with which they are sometimes justly charged, their 3 cents of the philanthropic dollar has had the quality of multiplying itself into basic discoveries, progressive movements, and widespread benefits. All givers who take seriously their opportunity can learn much from the experiences of foundations, failures no less than successes; for some foundation has tried nearly everything once.

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WE ARE not, most of us, Rockefellers, Carncgies, Fords, Hersheys, Dukes, or Guggenheims. We cannot, individually, finance a large research or service program, as do some of the direct-operation foundations. The making of grants, which is the method by which most foundations function, might sometimes be within our means; but opportunities like the Rockefeller penicillin project do not normally come to us, and we lack the special knowledge and the hard-bitten experience to choose the hopeful and throw out the unnecessary and even harmful. Every year in America a few people tenderly write into their wills provisions for new orphan asylums

— although experts in child care have long been pointing out that adoption and foster homes are far better for most such children, and many of the orphanages already existing should be closed, To give wisely is a hard job; yet we see the immense benefits which do sometimes spring from really creative giving. How shall we small givers, who together give so much more than the few large givers, join in this “experiment well worth trying

— giving, under the new rules;

We shall have to continue some giving for immediate relief. It. takes a deeper and more farsighted sympathy to build a fence at the top of the cliff than to stay at the base and keep picking up the injured. We shall prefer to finance the fence builders, but until all the fences are built or government lakes over adequately the whole relief problem, the injured need our help.

We can do effective, creative giving through continuing to support the regular religious and secular organizations in our communities, if we make certain as contributors or board members that they are not helping people “in trouble,”but out of it; that they are not merely doing things “for people,”but with them. To give a breadwinner who has lost his arm $10 a week toward support of his needy family seems a commendable act, and will show up irreproachably on the annual report. To take the time to find out the man’s abilities, to consult a specialist in employment for the handicapped, perhaps to pay for some special schooling to fit him for a job and help him find that job, will cost less cold cash than continuing relief, and be infinitely better for the man and his family. Such human engineering applied to the individual looks like “overhead" on the annual report, and has had less tug on contributors’ heartstrings. If our local organizations are doing that kind of enlightened job, they need our financial support and our help in explaining their work to the unenlightened. If they are taking the easy, traditional, ineffective way, they need to be reformed or abandoned.

Many of us will turn somewhat deafened ears to pleas for endowment. Rate of income from conservative investment has decreased nearly one half in two decades; an averaged present figure is perhaps 2.7 per cent. Endowment funds under the new conditions offer very little aid to present programs, and it is not possible to predict that a given school, association, or other organization designed for fairly limited purposes will be needed at all in the remoter future, or will maintain its earlier effectiveness.

Those of us who see the great possibilities for human welfare in fundamental research, and are willing to accept its usual conditions of slow progress and frequent failure, have several means for sharing in these experiments.

One of them is likely to be involuntary. Several hills were before the Congress — S. 1850 passed the* Senate after the social sciences were stricken out, hut died in the House —to create a National Research Foundation. If set up on the scale recommended by Or. Vannevar Bush, whose Office of Scientific Research and Development produced the atomic bomb, this foundation would shorth be spending 122.5 million dollars a year nearly twice as much as all existing private foundations now spend. Or. Bush, proposing it during the war, would coniine it to ihe natural sciences, including biology and medicine, with strong emphasis on national defense. Our gift to research through taxes might accomplish more for mankind if the program of this proposed foundation should be broadened to include research and aid in the social and economic sciences, with ample safeguards against the spoils system, independence in the research function, and full publication of findings.

Existing foundations, and some special associations which have similar programs, art’ a gift channel which is often overlooked. Nearly every foundation and welfare organization is permitted by law to receive additional gifts. At recent income rates, a gift of $'270 is just as effective for one year as the income from $10,000. It seems undesirable 1o set up additional small foundations, because of cost of administration, the need to acquire experience, and low rates of income. If the high hurdle of pride men have in establishing a foundation in their own name can be overleaped, contributions — especially for current expenditure rather than endowment made to existing foundations now doing effective work in a desired field would offer a logical road to accomplishment for givers of moderate means.

Community trusts deserve special mention. Such trusts are foundations, usually organized on a city or county basis, which accumulate the legacies or gifts of many contributors and use them under a single management for charitable purposes, chiefly within the given community. About seventy-five such trusts now are active, in as many cities; their capital funds total $75,092,000. The donor places his gift in the bank of his choice, which manages its investment and turns income over to the community trust. The distribution committee of the community trust spends the income of all its funds in accordance with the expressed wishes of each of the donors, but with a final power to change beneficiary and purpose if the original need no longer exists. While many such trusts are restricted by the terms of most of their gifts to the older type of “relief" giving, a few undertake broad-gauge studies of their communities, and finance programs designed to benefit the whole community, and sometimes the state or nation. Under leadership with vision, community trusts can become an efficient device through which many small givers can pool living gifts and legacies inlo a very adequate instrument of the now giving, constantly adapting its program to the needs and opportunities of their own community.

Dr. Harry Emerson Fosdick once preached a budget-Sunday sermon with a title borrowed from the highway desperado, “Your money or your life!” This paper has been confined, intentionally, to the giving of money. But it needs also to be said that money is not the only available gift, or the one most important.

In the older dispensation, money could buy a loaf of bread and save a man from starving. In the new era of more creative giving, money alone cannot buy the discovery of penicillin, or the needed research toward a sound tax policy. All that money can do is to release for creative work a man of vision and ability, and give him tools. The real contribution comes from the man, who must give long years of patient searchings, destined for delay, disappointment, and frequent failure, with only now and then a glimpse of a far new truth which will benefit chiefly his fellow man— if he does find it.

Such giving, too, is “an experiment well worth trying.”