Giving back: a very American tradition

Despite throwing off the yoke of Great Britain, the Founding Fathers of the United States remained infused with a protestant worldview. Among the religion’s most cherished values is the idea of looking out for one’s fellow man. If, through hard work (and the help of God) you managed to become rich in the new world, you were duty bound to “give back” a portion of your fortune to the community where you lived.

In his celebrated 1835 work entitled Democracy in America, the French political philosopher and historian Alexis de Tocqueville noted with interest the high number of schools and hospices in American cities and, furthermore, whereas in France such establishments would be operated by the government, or in England would be presided over by some Lord or other, in the United States’ fledgling democracy of the mid-1800s, these places were usually run by a charity. And funding these charities were invariably local wealthy entrepreneurs.

Thanks to the industrial revolution, which coincided with the first half-century of the United States of America’s existence, the bank accounts of its entrepreneurs were flushed with cash, and there was a commensurate growth in their philanthropic endeavors. And good WASPs that they were, these men had been brought up to believe that “the accumulation of wealth was not, in itself, a worthy pursuit,” to paraphrase the British historian Eric Hobsbawm.  

Carnegie, Rockefeller and Ford
Among the pioneers of American philanthropy, one name stands head and shoulders above the rest, Andrew Carnegie. The Scottish-born industrialist was an early incarnation of that most American of capitalist concepts, the self-made man. After emigrating to Pittsburg with his parents as a teenager, Carnegie got rich by investing in America’s nascent railroad industry, eventually establishing the Pittsburg Carnegie Steel Company.

In his 1889 essay, entitled The Gospel of Wealth, Carnegie boldly articulated a view of the rich as mere trustees of their wealth who should live unostentatiously, provide moderately for their families, and use their fortunes to promote the greater good. For his part, Carnegie chose to invest his mammoth fortune in education and the arts. He is perhaps most famous for financing around 2,500 libraries across the US (the majority of which are still standing today), New York’s Carnegie Hall and Pittsburg’s Carnegie Mellon University. Upon his death in 1919, he bequeathed a large chunk of his fortune to charitable works.

The other grand philanthropic figure of the age was John Rockefeller. In his formative years he was heavily influenced by the pastor at his local Baptist church who once gave a sermon explaining that money was a gift from God, a belief which would inform Rockerfeller’s philanthropic philosophy of doing your best, saving what you can save and giving what you can give.

After establishing an oil empire that saw the Upstate New York native become the richest man on the planet, he put his words into practice, giving around 60% of his fortune to charity. His main area of interest was scientific research. In 1901 he established a foundation dedicated to medical research which became The Rockefeller University, financed vaccination programs in China and provided millions in humanitarian aid during the First World War.

In the first part of the 20th century Henry Ford took up the philanthropy baton and, via his eponymous Foundation, defended the cause of democracy throughout the world.

Social Washing?
While the philanthropic engagement of these steel, oil and automobile magnates was not in doubt, they nevertheless received a high level of criticism from politicians and public opinion for whom the largesse of these tycoons was a way of making them feel better about their corporate avarice. This was the case for President Theodore Roosvelt, who criticized Rockefeller by declaring that “no amount of charities in spending such fortunes can compensate in any way for the misconduct in acquiring them.”

Andrew Carnegie viewed the rich as mere trustees of their wealth who should live unostentatiously, provide moderately for their families, and use their fortunes to promote the greater good

The 26th President of the United States had a point. The colossal amounts given away were not enough to wash the blood off the hands of America’s leading industrialists of the age. While Carnegie opened libraries for his workers, he did not hesitate to cut their wages and send his muscle to subdue the rabble-rousers when they protested, as was the case in the Homestead Strike in 1892, which resulted in the deaths of 16.

Rockefeller adopted the same heavy handed approach, calling in the National Guard to disperse the Ludlow mining protesters in 1914, with over two dozen losing their lives as a consequence. Meanwhile, to maintain his oil-refining monopoly, Rockefeller unscrupulously ruined the competition, squeezed suppliers and fired large numbers of his company’s workforce. As for Henry Ford, he was a staunch opponent of unions, presided over a reign of terror at his factories and did not hide his admiration for the Third Reich.

Modern philanthropists
Despite growing public cynicism, in the latter half of the 20th century, America’s wealthiest entrepreneurs continued to be inspired by the charitable mores of their forebears. The most high-profile philanthropist of the age is undoubtedly Bill Gates, the founder of Microsoft. Via the Bill and Melinda Gates Foundation, the 68-year-old has spent around $80 billion on fighting world poverty since the charity was established in 2000. Gates has also promised to leave 95% of his entire fortune to battling illness and illiteracy in the developing world.

The King of the Nerds was also the driving force behind 2010’s Giving Pledge which asks American billionaires promise to give at least half of their wealth to charitable causes. To date, some 70 billionaires have taken the pledge. Upon his death, the co-originator of the Giving Pledge, Warren Buffet, will donate 99% of his fortune to charity. And the Oracle of Omaha is not waiting until he passes away to pass on his cash. In 2020 alone, he donated $37 billion dollars to worthy causes. But what about the next generation of America’s most wealthy?

Trickle-down tech industry ethos  
Silicon Valley’s tech industry entrepreneurs like to style themselves as disruptors who delight in tearing up the rule books – an approach that applies to philanthropic donations too, it would seem. Let’s take the example of Tesla and Space X founder Elon Musk, who believes that his professional activities are a form of philanthropy in and of themselves, because they “do good for the future of humanity.” In November 2021, when the head of the UN’s World Food Programme asked Musk to contribute $6 billion to reducing world hunger, the South African said he would consider the request, only if it was explained to him precisely how the money would be used and what it was designed to accomplish. Despite the WFP supplying further information, the wire from Musk has yet to arrive.

Are all tech-bro billionaires cut from the same cloth when it comes to charity? Despite being the third richest man on Earth, Jeff Bezos has been criticized for taking what some call a piecemeal approach to philanthropy – $10 million for a museum of history here, $15 million for a neuroscience research lab there. In the short term at least, we are unlikely to see a Musk Foundation or a Bezos University. An exception to the rule is Netflix guru Reed Hastings, who signed up to the Giving Pledge in 2012.