Carnegie's generosity may hold a pattern for today
CITIZENS of Dunfermline, Scotland, might have been forgiven for wondering late last month if Guy Fawkes Night (usually celebrated on Nov. 5) had been rescheduled. But the fireworks dazzling onlookers in the city's park were not a memorial for the fellow who plotted to blow up Britain's Houses of Parliament 380 years ago. They marked another anniversary -- the birth, 150 years ago, in a minuscule weaver's cottage nearby, of one of the most successful acquisitors of money the world has ever kn own. Andrew Carnegie was 12 when he and his family emigrated to America. They went (on borrowed money) in search of a better life. Carnegie's extraordinary success finding just that was a case of the ``American Dream'' par excellence. By 1900, his Pittsburgh Steel Company was making a profit of $40 million a year, $25 million of it going into his own pocket.
Today, however, this 19th-century Scottish-American Croesus is remembered, as he wanted to be, for his philanthropy rather than his wealth. And not only for how much he gave, but for how he gave it.
Carnegie spent the last 18 years of his furiously energetic career trying to avoid the ``disgrace'' of ending his life a rich man. He did not succeed precisely as he wished, but his effort to live by his own philosophy of wise benevolence, of administering his wealth as ``a sacred trust for the good of [his] fellow men,'' led him to distribute more than $350 million.
He aimed to avoid ``the taint of charity'' -- the giving of mere handouts -- by providing, instead, carefully thought-out ``ladders'' which people would be willing to climb up. He was a great believer, of course, in the betterment of the individual. He used his philanthropy to encourage education, research, personal opportunity. He became famous as a donator of public libraries and church organs, both resources for what he considered ``sweetness and light,'' but both requiring the active participa tion and support of their recipients and the cultural development of the individuals using them.
Above all, however, he established some 11 organizations which still, in 1985, not only actively perpetuate his name, but continue to practice his intentions as well. Seven of these organizations are in the United States, four in Britain.
Carnegie had an undying affection for Scotland, and for his home city in particular. So he gave $10 million in trust for Scottish universities and $3.7 million to Dunfermline. The Dunfermline Trust still spends about $250,000 a year, principally to improve social conditions in the city. At the other end of the scale was his endowment in 1911 of $135 million to establish the Carnegie Corporation of New York. This is still no less than the 13th largest grant-making foundation in the US. It was Carn egie's final attempt to get rid of his ever-accumulating money: a single large fund for others to distribute.
In all, the current funds of the Carnegie Trusts and Institutes are reckoned at more than $1 billion. Combined, the organizations spend about $4 a second.
But the ongoing contributions of these institutions, as such, are not the only good reasons for remembering Carnegie today. The ideas and convictions he preached about philanthropy are, perhaps, an even more useful legacy. Flexibility of endowments is key
One such idea is that endowments should always allow for unforeseen changes of need and condition. Simon Goodenough puts it this way in his new book ``The Greatest Good Fortune'': ``The concept of change was important.'' He points out that Carnegie expressly wanted the Carnegie Corporation not to be ``hidebound by any unnecessary strictures.''
Such flexibility in the use of his trusts has been greatly valued by successive administrators. A former president of the corporation, John Gardner, quoted by Mr. Goodenough, recognized that private philanthropic money demanded special uses. In 1959, the corporation (to put things in proportion) spent no more than about one-tenth of 1 percent of the total of America's philanthropic giving. Given the comparative smallness of its funds, Mr. Gardner contended that grants should be aimed at individuals wit h ``significant new ideas,'' at ``promising young people.'' Private philanthropy vs. public charity
The special position of philanthropic trusts, he maintained, meant they could take risks, could use ``venture capital,'' could invest money in ``the good man'' who might produce fresh solutions to problems old or new. For him (and Carnegie's allowance for change encouraged this attitude), the purpose of such a foundation is ``to attack the causes of mankind's woes rather than providing the immediate relief of the trouble.''
A similar line of thinking kept surfacing in talks in a conference last summer on ``The Role of Philanthropy in a Changing World.''
In his opening address for the conference, Alan J. Pifer, president of the Carnegie Corporation from 1967 to 1982, asked whether ``basic charity'' was, or was not, the ``proper function of philanthropy.'' He perceived a new danger in the United States today: that a lessening of government care for the poor might result in ``heavy pressure on philanthropy to revert to its earlier role of being a major provider of charity.''
While recognizing the importance of some philanthropic funds being channeled into welfare, such pressure could too easily mean ``the entire resources of philanthropy'' -- which are not large -- being spent that way.
Mr. Pifer argued that the virtue of the ``private sector'' was its independence. Its roles, he says, should be to serve as an ``effective critic of, and a restraining influence on, the governmental and business sectors.'' It should encourage individuality; serve as ``a locus for truly independent research uncontaminated by the political process, and, most important, [provide] a margin for experimentation. . . .'' Communication revolution's impact
Lord Thompson of Monifieth vividly described the radical implications for philanthropy today found in ``instantaneous communications.'' The ``communications revolution,'' he said, ``releases compassion on a mass scale never known in Andrew Carnegie's day.'' The vast generosity of ordinary men and women in giving to such TV-publicized needs as the starving in Africa or victims of earthquake or eruption is a comparatively new phenomenon.
Pifer claimed that of the $61 billion given out each year for charitable purposes in the US alone, ``over half . . . is given by people whose incomes fall in the bottom three-fifths of the income scale.''
If so, then clearly the use to which such munificence is put should be a weighty public responsibility. Carnegie-type philanthropy may suggest a better approach: attacking the causes of poverty and misery rather than their urgent symptoms.