tv History Bookshelf Claire Gaudiani Generosity Unbound CSPAN April 18, 2021 8:00am-9:26am EDT
hello everybody. my name is david blankenhorn. i'm the president of the institute for american values and i want to welcome you to this conversation with claire. gaudiani. dr. claire gaudiani is a professor at the wagner school at new york university. she is a senior fellow here at the institute for american values. she is also a fellow at dimas a excellent think tank also based here in new york. she serves on many numerous corporate and not for profit boards. she served for 12 years as the president of connecticut college she writes prolifically and lectures widely.
and her brand new book, which we will be talking about tonight is called generosity unbound. how american philanthropist can strengthen the economy and rebuild the american middle class. so claire welcome. thank you very much. you are you have an argument to make you have a story to tell? what tell it to us take a few minutes just put the id on the table. okay before i do that, can i thank you and reina for this beautiful center for public conversation. i think all the guests present tonight understand what an important place this is and the fact that democracy is a discussion. and this is a place that starts
from that position and then invites the thinkers and the writers and talkers together to engage in democratic action, which begins with thinking and speaking together and remembering where we came from where we are and where we're going because they're all connected and in the church of what's happening now. which is 24/7 television news wonderful we can get so focused on the present that we forget the importance of the past to the future, so i want to thank david and i want to also thank reina blankenhorn for the spectacular work. she's done to make this evening possible and by the way to make this room possible, and i also want to thank the staff at the institute that has just done an outstanding job making a very tight assignment to write this
book within a year actually possible. so thanks to all the institute staff and the last and among the most important people. i want to thank before i begin. my little remarks is john jackson who's here from the course foundation john had an idea that somebody ought to speak up for the importance of freedom. to the future of philanthrop and he had the courage to. look around and see how that could come true and then to figure out how to make such a piece of work happen. so i'm deeply grateful to john and i'd like to ask you all to thank him with me. thank you, john. these are ideas a lot of us get and get a really compelling idea and then go and have lunch and get over it because making it happen is way too complicated,
but david blankenhorn and john jackson, aren't that kind of person and we're all very much for the better. especially me. so great. thanks. the argument in this book is precisely the importance of freedom. to the future of philanthropist before that statement means anything you'd have to want to think about how important philanthropist is to the future of this democracy and to think about that. you'd have to say. well how important has it been and if i tell you right off the bat that no one here present. and if he bill gates were here he'd be included. no one here present has not been a recipient. of american philanthropist and you may tell me you didn't have a scholarship and you may tell me that you never needed a spin by the soup kitchen when you were a little kid or a married person.
but i would tell you that all through your life. you have shown up in doctor's offices. in lawyer's offices you have shown up in all sorts of professional settings and some of them pastoral and religious settings. where the person who brought you what you needed? was a person who seemed to just have a name tag, but the name tag should have said so and so brought to you by. and the list of people who contributed to that person's education and enabled that person to grow to be the doctor who would attend to you or to one of your children or the lawyer who would help you figure out a complicated problem or advance an important idea, but you get my drift no matter what field you're in you have been surrounded by people whose human capital was developed by donors
whose names aren't on their name tag. but for now on whenever you see a name tag, i want you to see the rest of the ribbon. that says the brought to you by whenever you enter a hospital. most buildings of the arts and and entertainment and aesthetics those buildings were brought to you by and by the way when you just walk down the street and most of you can do that better than i can as you can see, that's okay. that's partially because none of you had polio. and you didn't give that to yourself and that didn't happen from the pharmaceutical industry by itself. that happened from hundreds of millions of american citizens. who joined together to collect money a dime at a time? and that could only happen
because this is a country where everybody takes philanthropist seriously. and people had an idea first time in human history, maybe if a set of people get together, and they decide to fund science it would be possible to actually get after the disease and knock it out. imagine people thinking in 1933 that individual gifts freely offered by individual people who were just stepping out barely in 33 from the great depression. they were asked to just give just give a dime. and they did they collected from our fellow citizens for our well-being today in 2010. billion dimes that's a lot of times there weren't big foundations giving away huge amounts of money.
the government didn't put any money into that effort. and that's why. we and our children my grandchildren whom some of you just saw that's why they and you and i didn't get polio. so when i say that we're all recipients of philanthropist if you ever took an antibiotic antibiotics first research was done by a philanthropist if you ever have had an imaging routine with an mri. all of the initial research on that crazy field was done by these crazy people who decide that they're going to give their own money to make something amazing happen. child labor i could go on and on you could see i teach this and i'm grateful some of my students are here. but what i want to say to you is this country. and it's entrepreneurial energy.
it's idealism and it's optimism are grounded in the assets. of american philanthropist freely expressed by donors who have all sorts of ideas one of the great glories of american philanthropist is its diversity. people are funding all kinds of things and their funding things that seem crazy at the time. but that's only because everybody else couldn't see the future the same way as a philanthropist could who could sit with an entrepreneur and say really? you think it's possible that if we gave you some money you could do a prototype. and and make a machine that would see better than an x-ray. and those three young scientists who came here from germany told that to mr. rockefeller? he didn't understand the physics frankly that they were trying to explain to him, but he gave them
the initial investment. and they produced within a year and a half the electron microscope. and that transformation of seeing is the seed of all the imaging technology and the last of those three fellows in his late 80s just died last year. so philanthrop is at the core of our industrial productivity. it's at the core of our health and it's at the core of who we are as a people we invest in each other in human capital. although scholarships all those new schools k through 12 and in physical capital all the buildings i referred to and in intellectual capital imaging machines. an attack on a virus what? so that's the first thing to tell you and the second thing to
tell you. is american philanthropist. can't exist in a framework of coercion or loss of autonomy. foundations and individuals need to be free. to follow their dream we know that that's what's best for our economy. if each company can try to seek to make it work to see if the marketplace of ideas is going to prove them successful. or not quite in which case it doesn't work. so that great investment that our forefathers made our founders made. in designing a government that would challenge citizens just like us and like people we know to invest in each other that's what we are protecting.
we're respecting that past understanding its impact on us right now the fact that we're not sicker that we have antibiotics that and then understanding the impact for our grandchildren and great-grandchildren. that's what we're protecting when we say we don't need legislative incursions. on philanthropist freedom it's america's great asset. no other country in the world has this kind of an asset that has grown so big and powerful that is a it is called the third sector. it's the third structure in society. there's government commerce and industry corporations and the non-profit sector which is funded by philanthropists who develop whole new structures within our country. so philanthropist unbound has a title. you've already figured out the meaning of from what i've just said and what i've done in the
last couple of chapters is challenge us to think that with this amount of freedom. what if philanthrop? could respecting all of its diversity and all of the diversity and donor intent. decide that this might be a moment when we could do two things one. really look at what needs to be attended to in american society? what if philanthropist? could change society so that we could really address childhood poverty. and in addressing childhood poverty and ridding the nation of the most devastating elements of childhood poverty we could return half a trillion dollars a year. to the economy wouldn't we want to do that? i mean there are lots of different ways people have
proposed to deal with the deficit, but what if we were to say we would all give a bit more we'd get a lot more people to give more middle-income and upper middle income people who aren't maybe doing as much as we wish they were and get that to be focused on a marketplace of ideas to attend to what is really a third world situation for the bottom 15% of our population. we could make a big difference. the second idea is how could we engage an even larger percentage of the population? in creative philanthropist we need people to have more options and i won't talk a lot about that but we can create more options than simply making a check and there's a whole group that i'm working with that will be trying to make that happen. i don't even think david knows
about yet, but the philanthropist sector has another whole gift to bring the economy. it's been bringing gifts to the economy, but there's much more that we can do, but we cannot do it if the government whether it's at the state level or the federal level are tangling the legs of the fast runner. that is american philanthropist and american philanthropy as we know it. it's the expresses the core of our culture. that we are committed to equality to justice. and to all men are created equal and endowed with the rights to life liberty and the pursuit of happiness and that we're all responsible in our little platoons to go around making it better. we need to be free to do that as we see it. and philanthropist unbound makes that argument and might give you
some quotes when you want to go out and convince other people. so, thank you david. okay, well. okay, so i have three. i'm hearing three main components to the argument. one then appreciation and description of american philanthropist its role in the economy, its role in innovation and appreciation and description of that third sector. i'm hearing a plea to keep it to to not over regulate it. right and i'm hearing a kind of a call to action and challenge to philanthrop to mobilize around the creative approach to address the needs of the bottom 15% right? that's that's the argument that's a sort of three parts of the book. that's where we're getting a big expense drain and if we could fix it.
you know imagine that people 30 or 40 years from now would say, you know, the people who got focused on the power of philanthropist figured out how to solve that problem. and the whole national budget changed and suddenly we were in a different place. i want to let me just want to go back to that first part for a minute if i could. it seems to me that the main argument against your idea. would be a probably would could be called a a social justice argument and it would go something like this. it say that if we are helping each other as a society through. freely giving of our resources and time to one another citizen to citizen giving that places all of the power and the discretion in the hands of the donor.
that person has deciding who to give to under what conditions and so forth, right? what other societies do and what has been argued that we should do is citizen to government to citizen you tax. you text the donor. the money goes to the government and therefore a broader policy. it's more democratic. the people receiving the benefits then are not receiving charity. they're receiving an entitlement or they are receiving something that they are due by right. so there's a social justice argument that says charity is not as good as justice. giving is not as good as being entitled. and for free giving is not as good as political decision-making that's democratic. what do you say to that? well, let's look at the pieces of it.
you know, i'm a practicing roman catholic so i can't be against social justice, and i certainly i'm not against charity. and so let me say that up front so i can get accepted back into the church this sunday. however, what we have seen is the importance of investment in fellow citizens by fellow citizens and the fact that 89% of americans give on an annual basis means that it's not just some little group of 150 wealthy people who are making this justice happen. it's really everybody and what we'd like to see is more of everybody more deeply engaged. in this giving now it's true that in the last let's say 20 25 years. so it's not a political issue america has fallen a bit off its
position of the top of the heap in in graduates from high school and literacy levels by age nine and a whole set of statistics infant mortality. we're 26th. out of 30 developed countries. that's not great. so that's why in a sense the people who are on the the side you're talking about, which you're calling the social justice side are gaining momentarily on the side of the freedom lovers, but that's why it's this thinking now is so important because we have time to flip this around to alert people to the importance of fellow citizens receiving an investment from fellow citizens in a community their sense of engagement with each other the sense of expectation that i have when i've seen it you and your family and other people want me to do better and you're willing
to see to it that i can and perhaps not only by checks but by staying involved with helping me as was done in our early history, this is where we came from the very first societies that did philanthropist understood the difference between getting a government check. or having the government deal with it which in 1820 was called an alms house or a poor house. and you would not want me to spend time telling you how awful though circumstances are if you want to know we can talk about it at q&a. but instead what societies did mostly societies of women was they said we're going to set up a house of industry and these widows with their children will each have a small set of rooms in the house and they'll be on the main floor. will be a room with looms and weaving and sewing materials and will bring.
we who are still women in our family situation will bring the cloth and the material you need and will come and babysit so that you don't have to worry you who are widows about the children and you'll be able to earn money in an appropriate and protected setting and then we'll go out and sell what you make. and bring the money back into the women's societies. these were the alternatives to the the arms house public alms house, right? and so people in our culture right after the the ink was sign to the declaration they began to operate as citizens on behalf of federal fellow citizens. we never were a monarchy. we never considered the government the place to go or the place we had to go. so the people who would be coming to the kind of conclusions, you're coming to are people who haven't thought through the difference between
being a subject. and being a citizen if you have forever been a part of a monarchy. you are a subject in some monarchistic settings. you also called a surf. and in those settings each of you was individually frightened by the leader whoever that person was because as this happening in some places still in this world, the leader person can send in the police and do anything. he wants in your household the religion neighbors. let's go this all heart is almost too and exactly so you have more diversity right so forth and so people don't feel connected to each other because if i say anything about what the police did to you last night, they'll do it to me tonight. so i'm stay quiet. whereas in a democracy the kind of government the founding fathers set up what we had instead was citizens engaged with each other as the
entrepreneurial spirit began to build the industrial revolution. it was self-interest rightly understood. that is the principles. that doesn't mean everybody fulfilled the principles property properly, but it means that the principles of self-interest rightly understood mean that i have a relationship to you that involves my seeing to your well-being as the best way to assure my own well-being. oh, well, that means that i'm a citizen and not a subject we the people control the government and we the people are going to watch out for each other's well-being now. i have to say if we fall off the mark and we stop doing that and we let the the society fall apart with a small number of wealthy wealthy people and that's wrecking what the
founders set up so in a way this book wants to ring a bell and get everybody's attention. not just the attention of foundations and people of wealth but everybody and say, we have to understand our relationships to each other and to make sure that we're making investments in each other through our freely expressed contributions the third sector and that's i'm going to take another run at this. by making a here is a recent article from the wall street journal by kimberly dennis. and she's basically saying, you know philanthropist shemale. what's good about philanthropist? i'm glad she didn't say the other word. while businesses may do more for the public good than credit for philanthropist may do less. think about it a moment. can you point to a single
charitable accomplishment that has been as transformative as say the cell phone or the birth control pill? to the contrary the literature of philanthropist is riddled with examples of failure including where philanthropists have actually left intended beneficiaries worse off. now she's actually works for a philanthropist. so she says i don't mean to belittle philanthropist, but then she goes on to say my point is simply that there is nothing inherently better or no blur about using one's resources for charitable purposes than for any number of others. if anything the marketplace does a better job of channeling resources toward where they are most valued. well in fact that's actually not true. philanthropists are the first money in when an idea is way too wacky for an investment when a
company or an investor has an expectation of return on invested funds and you approach him and say i think i can produce something better than a a microscope. and they say, you know, well, not likely this doesn't make sense who's ever heard of anything like this. what do you mean antibiotic what's biotics can invest in that and in fact the gentleman who did polio who did penicillin invented penicillin tried to get money from the market price sector private sector and they said cause why because the philanthropists have a higher tolerance for risk. would that be it? well, the philanthropist makes looks at things differently. he says there's as rockefeller did when he funded that doctor who did penicillin he said
there's a one in three trillion chance. that this bug would actually be something people could take as a medicine and it would kill infections in your body because anything that killed the staphylococcus and the petri dish would obviously kill you if you ate it, right? so all of the industries said no way his government said no way but rockefeller had the money to say there's a one in three trillion chance. but look at the one. if it hit it would be the end of infectious disease. on the planet it would be a total change in the lifespan of human beings. it and he made a few other things like that that you can figure out and he said i'm going to go for it. do you see what i mean? the three trillion was wildly
outpaced. so if by the possible outcome only commercial if only the marketplace it would have to allocates resources, right? you miss a certain level of upside upside right the risk taking that only the philanthropist is going to make right. right because that person is willing to say as many do particularly people like carnegie and mrs. sage say, you know, i have this money in a sense by god's grace or by luck or however they want to put it and i can make this investment whereas when you're a financial investor a commercial you've got responsibilities to other investors. you've got other places that are more sure where you should put the money. it's a whole different. it's a whole different piece. look at how many people are funding scholarships. particularly k through 12 and you look at some little kids and you'd say what are the chances that this little person is going to? i don't think so.
because you're looking in that tiny little space right instead of saying with the proper opportunity. this person could and that's the eye of the philanthropist. so i think she's running short on good ideas when she says that in the other thing. i mean i got this from the book i which i thought was a real to me made made a lot of sense is that if if the threshold for the marketplace is going to not permit the maximum innovation right similarly with politics because with with a political bar you have to build a broad consensus there has to be wide buy-in from a majoritarian view. so the years the create the the the the long shot right the thing that might fail but if it succeeds it would be a breakthrough is unlikely to pass that threshold. that's right. so you have a marketplace.
that is to put it a different way if you have this third sector you're going to have a seed bed for generation for innovation. that would not be possible if all you had was either a political consensus or return on investment from investment invest. absolutely, and that's why america's economy is so innovative because we have this pool of mad money. how at the end, but i mean you have to be realistic at the end of the first world war a young man came back and had seen some airplanes in the luftwaffe in the in the first world war where he served and he came back and he said to his father dad, you know there ought to be a commercial aviation industry. and his father knew president coolidge and they together went to see him and they said, you know, the government should be developing commercial aviation.
calvin coolidge said the idea of commercial aviation is intellectual exhibitionism. it'll never work. now those of you who have invested in airlines probably think he might have had a point but nonetheless most of us have been on a commercial airline and that young man was absolutely right. what did the father do? the father was a philanthropist. and the father said well, even if the government isn't going to do it for exactly the reasons that david just said, i'll fund the first stage. they set up six universities with aeronautical engineering. which no one had heard of before. thank you very much. those six are still in place and they are among the premier
institutions and aerospace. they they set up affairs that would permit people to experiment going up in an airplane and america's county fairs to familiarize people with it. and then they paid for human capital. they bought the intellectual assets. of a person you all know. robert goddard who went off and got funded to do aeronautics and aerospace engineering and rockets? he was a crazy guy. but 300 of his patents. continue to be in every airplane that you and i travel on today. this was so when she says there's a lot in the articles. she says, oh, there's lots of failures. that's part of the point. right? i mean there couldn't have innovation without failure the minute you want to be failure free. it turns right. you're pretty boring, dude. sorry.
do american philanthropists underserve the poor? yes. and therefore if they do underserve the poor why wouldn't a few well. my understanding of the legislative initiatives the green lining national commissioner committee for responsible philanthropist. they want to have a rules that would. require either directly or indirectly that the money be spent in a certain way or that they go to people go to groups that are certain kinds of groups. so if it is true that american philanthropists are under serving the poor. why wouldn't it be a good idea to have new rules that require them to? correct that imbalance because that is a medicine that kills the pharmaceutical industry that is creating it. american philanthropist doesn't
work like that. so if they want the medicine to be coerced philanthropist then philanthropist. we are not set up. for philanthrop to be a second kind of taxation. we pay taxes. thank you very much. you can argue about whether we should pay more or less. that's another argument, but now we're talking about citizenship and citizen action and the call for citizens to be engaged with each other. that's a whole different cultural and financial framework and if you suddenly decide to impose regulation on that you've basically if that's the pharmaceutical house that creates the medicine for the poor. you've just put it out of significant business. which is why i take the position that we need to simply look at philanthropist and look at each other right left and center and
say can we engage more people to give more money to continue respecting the diversity in american philanthropist and look at this issue. just of the third world level poverty we have and could we say? that by july 4th. 2026 america's 250th birthday we could have fulfilled founders intent. wow. what if we gave ourselves? 16 years and what if we mobilized all the amazing work that's gone on across this country with evidence-based highly successful programs that individual foundations have going on in 12 places, aren't we thrilled? what if we had gotten penicillin going in 12 or 13 doctors offices?
ah and the rest of us with children with strep throats would see them die. no way. we get a solution like penicillin and we say everybody's going to have it. nobody's going to die of a strep throat. crazy idea, but we're not scaling up. what works. we know how to address infant mortality. we're doing a great job in certain places. what? what if we created a marketplace of ideas? and we let the competition go on for poor communities to decide what they wanted to address. and which kind of program they wanted to invite into their community and what if we challenge them to put in the first five percent of the necessary funding. to raise it the way carnegie did carnegie did it that way the way mr. who build?
537 that's what i thought about when i read her thing name one good idea. how about all the libraries all over america, right. how about on our schools in the south look saying stuff like that gets you published. i mean, that's why anyway you really want to propose things that could work. we have the mechanisms from the commercial sector. like a competitive marketplace of successful ideas people ought to be able to say we want to bring that to our community and we'll raise over the next however long it takes the first five percent and other communities around them in the community the low-income community. that's what rosenwald did that's what carnegie did it respects the dignity of people. it doesn't say we'll come in. we know how to fix it you lie right there and we'll roll over you with a solution carnegie
said he would build the libraries which he did thousands of them, but the community had to show a clear plan to sustain them over time, right and he would not be building first time right unless that had been worked right and rosenwald went into communities with sharecroppers. about 30 years at the at the end of the civil war and he said when he realized that 80% of the black children in the south were not being taught to read and he said no one will be able to engage in buying my products. he was the head of the sears roebuck unless they have a job that can't get jobs unless they can read this was american enterprise inspiring american philanthropists in the face of complete. total abdication of responsibility by state governments and by national government. absolutely. i mean the war ended and let's not even talk about it the level of injustice, but here he walked in as a philanthropist and a
major corporate leader. and he said if you collect funds from each other and whatever you want to do to raise money, i will match it and get the money we need and i'll see to it that you get a school built, you know, the southern ymca's. i know you and the white they did the same thing. they had a and they were funded by him. yeah. yes, right a jewish philanthropist building ymca is all over the south for it was just a great it was right. are as a people a if the current generation doesn't know this. you know i say to my students. who's your momma? if you don't know where you come from and who's your daddy? then you don't know what you're carrying on or not. carrying on we have this great tradition. we need to own it. we need to preserve it. we don't need to cripple it it has never worked like the
european system. there's works for them. we this is they came out of monarchies. yes, and they also came out of huge labor unrest in those transitions. at all, we have a different culture we have to respect our culture and we have to energize it and make it work and that means a lot of us are going to have to look at what we're doing and say i have to do more. i have to do it in a different way. i have to help other people get as invested as i am. i have to want real outcomes. i know you're someone who doesn't just write about it. you're actually working on some ideas to actually convene the people in the discussions to make this happen this i mean i'm what i'm what the what argument is. i hear it is that it is a it is a call to this philanthropistion to rise up and meet this need
right within it with within its own sphere, you know exact you know, the exactly calling upon the best of what it is rather than trying to turn it to something else. that's exactly right and david if i can just take a moment to say that as the book has been passed around. it's been amazing to me. how many people at major foundations? like ford have said this would be an opportunity. for the philanthrop world to get itself focused. on an outcome that would change its profile and help it to fulfill its future for america. we need to have respecting all the diversity and all the donor intent if we had a slice of what we do that we were all thinking of having input on. such as this declaration initiative that by 2026 the
bottom 15% will have well-being statistics that match the statistics of the middle class. guess what? they're going to need fewer services. they're going to be healthier. they're going to be able to work better and participate better in society. what an asset we will have built talk about investing in human capital. and it's something that philanthrop. even though they you know forward and others didn't speak out against, you know legislative incursions when they're looking at the beginning of the book and the end of the book. they say, you know, we'll sign on. this is where we should be going. this is how we should be focusing the nation on something we can all have some input on and imagine the celebration. 2026 if we could say to the founders, thank you for what we have all benefited from and we have made sure that in
benefiting ourselves. we have fulfilled your aspirations for a country where all citizens are created equal and endowed. by their creator with inalienable rights to life liberty and the pursuit of happiness, and we'll be able to remember. that the last words of that declaration that those extraordinary individuals signed said to achieve this end to create this kind of a country we pledge each other. our lives our fortunes and our sacred honor. they weren't just saying gosh folks. we hope this works. or let's all do our own thing. they wrote it up and they said we're here together this kind. of a country and who's responsible for what happens? we are.
and we need the freedom they fought and died for. in order to make that kind of a community exist and maybe in this last 15 years of the 250 we could just crisp up our efforts and finish this work together. right good and center. well, you've just done a great job in bringing together. across the political spectrum arrested we're going to want to open it up for a discussions, and i think we need to just while you're collecting your i think the i don't know if the camera guys have to move but we'll let's have a question first question from someone. comment sheldon garin thank you very much. shelby here. i'm from princeton university. i saw before i teach alongside your son and princeton, and so
let me start out by saying first. thank you and also saying i hardly agree with you. i i've been a tremendous beneficiary of private philanthropist being at a private university right maybe even gotten rich in the process. so so i certainly would be the last person to run down philanthropist. i think it's a wonderful institution for a lot of the reasons that you said particularly in terms of building higher education scientific advancement when you go around the world and you you talk to i mean my colleagues around the world everyone is envious of our university structure our scientific advances right the problem. however that i i sensed in your talk is i wasn't quite sure who you were arguing against the marketplace to be sure and i share your your skepticism that the market can really do these things plantopy is wonderful in that respect but as david pointed out there is government and that wasn't quite sure why you posed everything in terms of an either or one would see that
there in the real world. there are significant partnerships between government social policy and philanthropist efforts. so, so i'd like to hear a little bit more about that and then and then i let me just raise them mundane point that i'm sure you've been asked several times before but let's talk about infant mortality. so you've talked about philanthropist can come up with creative solutions. but as you said, we're 26th, i believe in infant mortality and probably if you look at the 25 who are better than us most of them probably have national health insurance a mundane point, but right significant right? maybe it doesn't take a rocket scientist. let's go dark to to figure all this out, but that maybe the welfare state actually does have a legitimacy and that in partnership with philanthropist. it does things. thanks. thanks very much. show the role of government is very important. we haven't talked about the role
of government i was talking about the role of government as a legislative force to insist on taxing or otherwise depriving philanthropist of its autonomy. and that was the that was the generator of the discussion on ungovernment the role of government as responsible under the constitution to promote the general welfare. just actually the line from the constitution is an important role and that is a role that there's no reason it cannot be or shouldn't be shared with private enterprise for all the reasons some of the reasons we talked about that is government can certainly provide large amounts of funds, funds, which the private sector can't i mean foundations raise somewhere under $50 billion a year just foundations. i'm not talking about the whole
amount raised by individuals and that is i think i calculated 133rd of the amount of money spent on social well-being issues in the country. so the you know, the 800 pound gorilla in the discussion is is the government and we're not going to replace that with private philanthropist like that, but a great deal of the innovation as the current president's innovation fund indicated does come from private enterprise not from government programs. so there needs to be a partnership and to a great extent if we had more of us involved. in creating more dynamic opportunities to address issues like infant mortality it's something we haven't tried yet, and i guess i'd want to try it before i forked over the energy
to a welfare state the nurse family partnership. has been in place for 30 years there are reams of evidence-based proof that it works as a way to stabilize infant mortality rates among the poor at the same level as middle-income families. but the edna mcconnell clark foundation has only so much money. so they fund additional places and they have to make sure that the ones they did stay strong and what if you know the private sector in philanthropist had an opportunity to enable them to really grow because we know where the poor are we have a census. that tells us the zip codes. with a poor exists, so it's not as though we can't find them and where those people are. that's where the infant mortality rates are bad and we have a couple of programs with
that kind of of success, so i don't think it's either or it's partnership, but it's a very very important role for philanthrop. they're also examples aren't there where you would have? something that is born in a philanthropist given birth by philanthropist right that then proves to be a successful and durable enough that it is been picked up by government, right it becomes you know, because it is able to build that broad political support and and so it's that it's not it's not it's not either or but the i'm what i'm hearing is that the philanthropist sector is kind of a laboratory for experimentation innovation and citizen to citizen giving right that has a quality to it right that you don't want to give up right and also changing of certain habits.
i mean a great deal of the difficulty that particularly very poor people experience is that they're not able to they don't know how to handle certain things because they haven't been in a framework where they were able to learn that and when that learning can go on over time, you actually get a change there isn't an american program. that i've been able to find that. has have the cases of blindness and amputation suffered by diabetics of extremely low income. and there's a foundation that developed a program with a my former migrant worker at the head of it that has actually achieved those ends. that needs to be scaled up and scaled out. could we afford community by community with community foundations and family foundations to actually do that nationwide. maybe if we decided to maybe it would have to be part of a
broader health program that the government funded. but our to kill the energy and the innovation in american society by saying the government will do it would be an enormous fatality to our culture. and i share your impatience with the rate of change particularly for the poorest the rest of us lives. so well, so i think this is a very important moment where we say we get it. we're going to make a change because we think our culture. is so important. but go to tom here. tom sylvester, i was a few minutes late. so maybe i missed it if you talked about the ways that government is crippling philanthropist. maybe it's proposals that would cripple it. so if you haven't spoken about that, i was wondering if you could speak about that a little more and what ways government could promote philanthrop.
ist i guess. increasing the taxes or other policy changes we did talk a bit in the in the beginning about that. that's okay about the ncrp in the green lining proposals that are in various ways potentially very injurious to foundations. i didn't say that even the process of writing this book there were foundation heads who said to me, you know, if any of this stuff continues we're going to take the foundation offshore or a conversely. we're going to close down. i'm not going to spend my time fighting with lawyers and accountants and and the government over how to run the foundation. so we're just going to close so, you know, those things are absolutely true. i think frankly in the deep issues of disaster that have
occurred to the economy since the ncrp in green lining activities, there has been much less ferment around these issues of curtailing philanthropist, but you know, that doesn't mean the second everything gets better. they're not going to all revivify. my point is those of us who care about america and understand that american philanthropist in its freedom is the core. of our culture. we've got a breather. to change the focus and get us operating the way we ought to be operating and we ought to use this time very in government changes to promote to help. well that some things could be easily undertaken and they've been talked about we could have additional tax relief for philanthropists. they've talked about higher tax deductions for philanthropist to
disadvantaged communities. all of those would be very helpful and it would show that the government honored the work of philanthropist and wanted to encourage it and i would say particularly among young people. that as you know, all of you the president has developed a social innovation fund somewhat controversial, but and he's trying to fund the best. of the highly productive programs that have worked so he's given money to fund the harlem children's zone model in a bunch of cities throughout the country. good, that's good and innovative thing for government to do probably it's a little bit scary, but there isn't that much money in it and and other features like that including nurse family partnership is going to get a bit of a let's see how many programs we can
start with government money. i'm just crazy enough to think that if we're going to do that at the same time, i'd want the rest of us to be funding local programs as carnegie did and let's let the best program win if it turns out that it's better for the government to do the scaling up. okay, fine, but let's do a tenure. study to see what happens if it's better for some of us to go into communities and say, you know, here's what you could do. here's how you could raise the first bunch of money. here's how we'll match your funds. here's how we can work with you to make the community you want. and work with them citizen to citizen. you know what? that might respect people's dignity and really work. and we won't discover that unless we have, you know, it's a competitive marketplace. let's let the government do certain things and then let's see if we can beat it.
yeah, just to make good things happen. yeah. yeah. that's the way let's go back to mark burner. unclear you not you know, the unr on the same page philosophically and in many ways on. let me put a case to you we have talked about. i think you're probably right about green lighting but the wind is going out of that sale. but i think there's a bigger mark. do you just want to take one minute to say but the green lining proposal the green lighting is around the country to get the government to impose a requirement. on foundations of a certain size that a certain portion of their corpus must be invested in poor communities or certain percentage of their employees have to reflect the communities in which they often they live and operate they think different
approaches and that was quite successful in california in what some people regard as a shakedown of some of the major foundations that like packard hewlett and others that kind of collapsed and cut a deal. 4.2 avoid the legislation the legislation gave up stated a fund. to to give to these organizations give these organizations. yes, and it's kind of whether with a donor intent question that the stated attorney general in california didn't obliged them to answer right? this is my question. i see the biggest problem is in the states. we 've some more biggest states in new york not least among them is nearly bankrupt and it's going to worse before it gets better. the federal government currently taxes private foundations at about two and a half percent from the income off the corpus. i can well imagine a state government coming and saying new york just a creature of federal law. you're all so organized in a state right and you take up
resources you tax benefits you can accumulate income off of your investments. and you're not really providing anything to the public wheel because you all your money might go someplace else outside the stator. those are not necessarily based on our community. so we want to impose on you a text the way the federal government does. because your creature of state law you should pay something other than a franchise franchise tax to renew your state. profit status once a year and we're going to impose a 1% tax and we're going to sell that to the public by saying there's how many billions of dollars that's is dead money to us as citizens and we can either raise your taxes so we can impose a tax of it. 500 basis points or 1% or one and a half percent on these foundations of over a certain size. it'll be very difficult politically. fight them and so what would you and that? i believe that's going to happen. it's public don't have to start in california today in new york is going to be lots of and it's not going to be so onerous.
it'll be 1% 2% 3% more and a half percent. and it will be incremental. maybe like the frog and the pot. that's right, but just you see that as likely and what would you and what effect will that have if it occur on private foundations? i'm an optimist mark. so i am. thinking it probably won't work. but that is the optimist in me more than the sort of middle of the road. how do i really think it will be i think there there are communities in extremis that will look at that as a real possibility particularly for foundations. unlike community foundations that are funding something that doesn't directly benefit not in that state, right? yeah, so i don't think it's an impossibility, but i think what we need to do is we need to
educate a larger percentage of the population. not just the professionals but everybody to understand what philanthropists writ large and we need to help everybody understand that if philanthropists leave this country as companies have when they could get a more comfortable deal somewhere else including just offshore. that local communities will be at a big disadvantage. they will lose jobs. they will lose small businesses that serve the non-profit sector and stay in business based on that commerce. they will lose the occupancy of real estate in their downtown. that is there would be a net commercial loss to communities that appear to be imposing unfair restrictions on the workings of foundations.
but all of that rests on people understanding that a foundation that does something good for people who have a certain disease or who people who are seeking education in american art or in asia, and we don't all do that here in lubbock. that's that's a way of saying that the foundations elsewhere that do attend to things that affect us here in lubbock are going to find their communities unfriendly and the whole system starts to come down and shrink. yeah and shrink and that kind of shrinkage and alienation not only harms the foundation sector as it is. but imagine young entrepreneurs who are saying i've gotten to a certain point, i don't want to just keep doing this.
i'm going to let the business work hire people to do it, and i'm going to become a philanthropist part of that is because it seems fulfilling it seems as though they'll be appreciated. and suddenly if they're not appreciated and they're harassed. they may decide not to do the philanthropistic effort, and i'm you know teaching young people who are interested in philanthropists some of them very wealthy scions of families who want to see what it looks like from the academic standpoint. they're they've been part of their family foundations for a long time. if they start to see that this is the bad guys. trade why would they want to do that? they won't have the same interest and what we'll see is over time a shrinking and a weakening of the whole sector and this is all part of my
concern that we take where we are and strengthen it and give it focus and backbone while giving it maximum running room. which is called freedom and making sure that we make good on some promises and i think we're close. to the founder's promises. so i go to chuck stetson. hi claire. i'm thinking about it and there's a couple issues that i think that come up. that to me are a little bit of troubling in the flint in the philanthropist world in the government world and the philanthrop world and i kid some of my friends about this we have this great focus on funding the symptoms and not going after the problem. there's one billion dollar corporation that focus on kids from the birth to aid. probably know the foundation and yet they feel good about they're dealing with all these problems that have been created but they
don't cut off the upstream, which is the problem, right and that is on them on the marriage stuff where you have all these families that break up and they got all these problems, but they don't go up to solve the problem. right if we if we ever cut off the stuff upstream and how do we kind of focus on that? and then we've got the government doing some crazy things like the government just here in new york state. it was the last hold out on no fault divorce. they decide in the middle of a big budget crisis to increase the state cost by passing no fault divorce and hurting children. we're pushing kids into poverty. we got 59% of the kids of the families where they were kids under six. 59% are with single mothers, we only have less than 8% we have 8% with with married couples. i mean we're pushing people into power. we have the government pushing people of property. how can we do this? and we and we can't we can't we
can't and get involved in public policy because the government won't let us have public policy and lobbying because they say that's not the world of philanthropist. i think it is. but thank you. thank you. i think there's two two huge issues that have to be part of the problem. you're trying to address right? well. chuck i couldn't agree more that dealing just with the symptoms and not what the problem generation is is crazy and people work at this all the time. where do you intervene? you know, the problems are so massive. this is like with disease. you have to pick a point and decide you're going to start working on the genetic end of it or on the microbial end of it or on the disease transfer end of it or you pick up position and you start to work. first of all, we need public education. we're insufficiently engaged in this discourse on these issues.
what generates human ill being absence of well-being whether it's at the poverty level or any other level. i hate to get off on this but the founders knew. that the most important element in continuing a democracy was virtue virtue in the people the most popular book read by the founders according to peter gay who is a no joke historian? american historian was multiscued. and he focused on the importance of virtue in the people in order to maintain a democracy. so greed and avarice and the kind of selfishness and ignorance that people think they
can maintain in a democracy doesn't work. we have information that's not being conveyed to people and they are finding it easier because of public policy and because we're not helping people appreciate their responsibilities the responsibilities of parenthood people get into situations that doom themselves and their children and then that creates larger doom in society. so we have to refocus our society and we have to be willing to speak about generosity and self-discipline industriousness thrift. i mean these were the actual issues that the founders talked about. nobody tells us that because it seems repressive. would want to talk to anyone about thrift. well, like you should go out and buy as much stuff as possible. well some crazy, but that's like some crazy philander, right? you know, take flyers on crazy.
subjects, so we have a real public education. we have changes in personal behavior that we have to be willing to speak up about and we have to approach government with an intense focus on the long-range plan. which is not the same thing as the church of what's happening now just on this point i think that issue that you raise of family structure is something that is much more amenable to the work of philanthropist than it would be to government policy because there isn't. there just isn't a consensus among the within government that this is a legitimate issue. and you know, i was involved with this for years with the
previous administration and also the current administration there is no willingness to say anything about this but there would be and could be and is within. parts of the philanthrop world and my idea would be rather than try to think of the government department of you know family strengthening it would be finding good efforts that are working that can be funded by foundations and private gifts that show that this is a way to promote thriving and reduce child poverty, and then maybe it will be scaled up by government, but i don't think i don't think i don't think that we're it hasn't reached that level of acceptance to be made into government policy, right? peter wood i'm president of the national association of scholars and interested in your past partly as president of the
connecticut college. thank you. there's a component to your book the dominant component, which is a pitch for the continuing importance of generosity and the threats that come. from pretty much without outside the things that are undercutting the motives to be generous and on this particular philanthropist. i was wondering if you had something to say about the threat within the philanthropist and by that i'm referring back to what goes on in higher education a lot. we've had numerous instances of donors who have found their funds. misspent or spent an inflation that they did not intend there's famous instances of foundations that have sunseted themself because they're afraid of being captured by the professional fun givers who want to nudge the
organizations towards purposes that the founders didn't intend and there is this this broad problem of those both individuals and foundations that want to give finding that the spirit of philanthropist somehow gets corrupted or gets under cod or gets channeled away from the purposes that people intended that would seem to me to be one of the things which those of us who both depend on philanthropist as i do on but all those of us who care about philanthropists and basic dynamic of american society would want to worry about what do we do to make this this spirit of freedom really thrive and not have philanthrop become a kind of vortex that centers around the purpose of the professional fungiers. right. thank you very much peter. i think you make a number of very good points. it is easy for people who have a
focus on running an organization to want the money to come in like this instead of perhaps like this and fulfill something that a donor has in mind and it's certainly has happened that that kind of transformation happens over time and over different administrations, i think for the most part academic institutions try very hard to fulfill. our intent sometimes the donors can't possibly intend what's needed 50 years later because you know it didn't exist and so within the best framework they can a president will decide we had a scholarship at connecticut college that was designated for a methodist female. from southwestern, kentucky you
couldn't find one. let me just tell you how hard she had to be needy and good enough to get in and my poor admissions office would say to me, you know, we just can't spend anymore money looking for her this year. we're not going to spend it and we actually acquired quite a substantial endowment there. that wasn't being used when i was turning away people whom that family would have loved. but they weren't from right there or they weren't christian. there was something else so you get my drift now there are times when you go back to a family and we all know this but mainly is there good intent in most academic institutions, i think mostly there are notorious cases where a donor, you know, like the basses went back to yale and said, you know, this isn't working the way we wanted but for the most part i think when you think of the billions of
dollars that get transferred to higher education. i think i'm relatively proud of our of our profile and of achievement on the other hand. donor intent is very complicated maintaining it over time is very complicated. and i think part of what i wish higher education would do would be to teach philanthrop. to undergraduates. it's a great interdisciplinary field. you do history you do philosophy you do finance and therefore mathematics you do economics. and just as we have latin american studies and we have early roman studies and all why not philanthropists part of what we need to do is offer courses and at least minors in this field so that people become familiar with donor intent and with how philanthropist has changed.
our country and how we have become who we are because of the power of philanthropist here people who never would have had a nats eyelash of a chance get to be major contributors. somebody invested in them and many of those people are our asshal said our faculty our students are graduate students and and many of the people at the national association of scholars. so we have to keep that going and part of the work. i'd love to see the association do is to begin to press for philanthropists and premiere and all kinds of higher education institutions. you know, there's a big debate ongoing debate about american exceptionalism among the historians and the political philosophers, but i especially after reading your book. i i think that to the degree that the domestically we can be
called exceptionalist. it's rooted in our system of philanthropist, right? it's that that is that if you there are few places where you go to a philanthropist. to try something new you usually go to the you go to some official. and i do i mean, would you agree with that? in other words, did you could argue that we're not in it you could argue the question of american exceptionalism generally, but on this specific issue of philanthrop to the degree that we are to the degree that it feels different here. i think a lot of it is rooted in the distinctive philanthropist tradition. it is just separate from the way. other countries have organized themselves. that's right. and and that's part of what we have to be sure gets brought to
the next and following generations when we say american exceptionalism. we don't have to mean that we are best in everything because statistically that's just not true, but we are profoundly different different in this way. yes citizens engage with each other which has drawbacks and assets but it's different right and that emerges from the three items that i mentioned right in the beginning. that is our optimism our idealism. and our entrepreneurism and they're all deeply connected. they are. very powerfully what makes our commercial sector so successful. we tried all kinds of things that no one had thought of before and they end up transforming a field right so and then creating a market and on the nonprofit side we have
that same energy that creates all kinds of possibilities and innovation is a connection to the future that is very much powered by philanthropist. and that makes us exceptional. that's why people over the world want their children to be raised here. they feel as though they'll have different kind of opportunity and that's true. and if you look at nations across the world that have invested in boys and girls and see which one of them had which ones of them have actually contributed to the well-being of the largest proportion of their citizens. ones who invested in both the ones have just invested in their male children are not doing as well and the way females got to go to school was not because the
government said, let's start schools for girls. philanthropist said we'll start schools for young ladies and will start universities and colleges for young ladies and suddenly it was for both young ladies and young men and then more recently imagine the crazy idea that graduates of elite institutions would be funded to go back and teach. and in low-income schools what a crazy idea. only americans nowhere else with that flown, you'd have to have the idea. undergraduate has an idea like that like wendy copped it then she got investors. i mean it's called that's truly an only in america idea and if you just decided to take one day
a week and notice the only in america things you came in touch with. the people you realize when they tell you where they came from and how they got here and while they got to be you'd say only in america. that's what we have to be sure is free. to run hard and to run better because there are lots of improvements that need to be made in the philanthropist. we've mentioned we have one more. thank you claire. gaudiani. thank each of you for coming out this evening and being a part of the conversation and we'll see you next time.