Charitable Giving and the Fabric of America

Karl Zinsmeister
The Philanthropy Roundtable

Karl ZinsmeisterKarl Zinsmeister is vice president for publications at the Philanthropy Roundtable. A graduate of Yale University, he also studied at Trinity College Dublin. For almost 13 years he was editor-in-chief of The American Enterprise, and from 2006 to 2009 he served as chief domestic policy advisor to the president and director of the White House Domestic Policy Council. He has written for several newspapers and magazines, including the Wall Street Journal, the New York Times, and The Atlantic, and he is the author or co-author of eleven books, including The Almanac of American Philanthropy.

The following is adapted from a talk delivered on January 29, 2016, at Hillsdale College’s Allan P. Kirby, Jr. Center for Constitutional Studies and Citizenship in Washington, D.C.

Private philanthropy is crucial in making America the unusual country that it is. Let’s start with some numbers. Our nonprofit sector now comprises eleven percent of the total United States workforce. It will contribute around six percent of gross domestic product this year. To put this in perspective, the charitable sector passed the national defense sector in size in 1993, and it continues to grow. And these numbers don’t take volunteering into account: charitable volunteers make up the equivalent—depending on how you count—of between four and ten million full-time employees. So philanthropy is clearly a huge force in our society.

To begin to understand this crucial part of America, it is useful—and also inspiring—to consider some of America’s great philanthropists.

Ned McIlhenny, born and raised in a Louisiana bayou, had a day job in addition to being a philanthropist: manufacturing and selling the hot pepper condiment invented by his family, McIlhenny Tabasco. There is big money in helping people burn their tongues, and McIlhenny used his resulting fortune for an array of good works. I’ll give you just one example. When he was young, hats with egret plumes were all the rage for ladies—like Coach handbags today—with the effect that the snowy egret, a magnificent creature native to Louisiana’s bayous, had become nearly extinct. In response, McIlhenny beat the bushes to find eight baby egrets on a private island his family owned. By 1911, he built up a population of 100,000 egrets on the island. At the same time, he convinced John D. Rockefeller and other philanthropists to help him purchase some swampy land to use as a winter refuge for egrets and other birds.

Another American philanthropist was Alfred Loomis. Passionate about science from early boyhood, he entered law school when his father died in order to be able to support the family. Hating the study of law and wishing to return to science, he went to work on Wall Street, and by the early 1930s he had become one of the richest men in America. Retiring from finance, he set up one of the world’s great experimental labs in a mansion across the street from his home north of New York City.

In 1938, Loomis visited Berlin and was struck by two things: Hitler’s popularity and the brilliance of German scientists. He returned home convinced that war was brewing and that science would have a lot to do with who won. He poured himself and his fortune into a promising new field that had defense applications—a way to use radio waves to detect moving objects—and his lab very quickly became the national leader in what we now call radar. Thousands of radar sets created under Loomis’s supervision did much to turn the tide of World War II.

Even more than his money, Loomis’s methods account for his remarkable success. Appalled by the bureaucracy and sluggishness of government research programs, he took a radically different approach in his lab. When it became apparent how successful his approach had been in producing radar, the Department of Defense copied it directly for the Manhattan Project, even hiring many of the scientists from Loomis’s radar lab. President Roosevelt later said that there was no civilian who did more to win World War II than Alfred Loomis.

Another philanthropist was Kodak founder George Eastman, who popularized photography in the early 1900s. When he began his business, photography was all art and guesswork, and very little science. He hired chemists from an obscure school called Boston Tech, and out of gratitude for what they did for his company he later provided most of the money that transformed Boston Tech into the powerhouse MIT. And he did so anonymously—for years and years, the donor behind MIT was referred to as “Mr. Smith.” Eastman also had a passion for music, so he methodically created and built to world prominence the Eastman School of Music at the University of Rochester. The Eastman School played an important role in popularizing classical music in America, and it remains today one of our top cultural institutions.

Another great American donor was Milton Hershey, who transformed chocolate from an expensive indulgence of the wealthy into an affordable treat for all. More importantly, he was responsible, with his wife, for the creation of a school for orphans. Hershey’s father had been a drinker and a neglectful family man, and he had known great hardship during his childhood. To relieve other children of hardship, he built a ring of houses encircling his home in Pennsylvania, installing in each a married couple to live with a group of orphans. He also built a school to provide the children a sound education and training in industrial crafts. Eventually he announced plans “to make the orphan boys of the United States my heirs,” and he endowed the Milton Hershey School with the equivalent of $11 billion in today’s dollars.