History Repeating?

How new is the new philanthropy? This is the question posed by a new BBC Radio series (sorry, UK only) that is looking back at the history of philanthropy. Most discussions about philanthropists of the past go back little more than a century to the founders of ‘modern’ strategic philanthropy, Andrew Carnegie and John D. Rockefeller. The programme’s presenter, the British historian Hugh Cunningham, takes us back another 150 years to the first man described as a ‘philanthropist’, the prison reformer John Howard (whose legacy lives on through the charity the Howard League for Penal Reform).

Howard’s is a great story. A devout Calvinist, Howard became interested in the state of Britain’s prisons when he took on the public office of high sheriff of Bedfordshire, which made him aware of the appalling suffering of inmates. With his inherited wealth from an upholstery business, Howard set about reforming the penal system not by giving money to the inmates but by lobbying for legislative change. This is an important lesson for those who think that there is anything new or different about today’s donors getting stuck into policy questions – influencing government has often been the highest impact way to use limited philanthropic resources.

Professor Cunningham rightly points out that this is a good example of how, in the world of philanthropy, there is nothing new under the sun. Yet he goes even further, arguing that Howard’s willingness to commit his own time and energy to the cause of prison reform around the world (Howard died of typhus, contracted during a visit to a Russian military prison) is not matched by today’s donors. This seems a rather odd assertion, given that philanthrocapitalists like Bill Gates and Ray Chambers are now committed full time to the causes they support. (Or will they only qualify as “committed” by Professor Cunningham’s standards if they die from malaria, which they are working hard to eradicate? By that measure, George Clooney is more committed than they are.)

Our more fundamental problem with Professor Cunningham’s analysis is that he does not, so far at least, use the history of previous golden ages of philanthropy to tell us about why philanthropy is booming today. Without such a theory it is hard to explain the similarities and differences between philanthropy past and present. We, on the other hand, do.

In a set of online bonus chapters to the book we describe how today’s philanthrocapitalism is the fifth golden age of modern philanthropy. Charity and philanthropy have existed since the dawn of humanity. Indeed, the first reference to philanthropy is in Greek mythology, when the titan Prometheus gives the gift of fire to mankind. (That earned a punishment from Zeus of being chained to a mountain in the Caucasus, where an eagle eats his liver on a daily basis. Until he was freed by Hercules.)

Yet it was only relatively recently that strategic philanthropy that is aimed at solving social problems rather than as a duty of faith emerged. This great transition took place in Renaissance Europe, an era when microfinance was invented and the idea of creating endowed foundations for perpetuity caught on. Why then? The drivers of this first golden age were the new, entrepreneurial wealth creators of the new capitalist system. These early philanthrocapitalists were members of the merchant classes, independent of old church and feudal structures and based in the new expanding cities that were on the front line of social change.

Professor Cunningham misses this part of the story, starting instead with what we see as the second golden age of philanthropy in the 18th century. Much of the energy of this movement, as he acknowledges, was the adaptation of the new organisational form in business, the joint stock company, to philanthropy. Hence many of the great philanthropic initiatives of this age, from the creation of hospitals in Britain’s major cities to the campaign against the slave trade led by William Wilberforce, were run as ‘joint stock philanthropy’ whereby groups of donors would collaborate by ‘subscribing’ to a cause with a donation. Again like today, 18th century philanthrocapitalists adapted the tools of business to achieve impact with their giving.

In the next programme in the series Professor Cunningham will look at what we call the third golden age of philanthropy, the Victorian era of enlightened businessmen when many of today’s biggest charities were created. Presumably the final show in the three part series will then turn to the fourth golden age of giving of Carnegie and Rockefeller (whose great innovation, the endowed foundation, was pinched from their 16th century English predecessors), and hopefully to the “new philanthropy” of the fifth golden age now under way.

We talk about these historical precedents and their lessons for today’s philanthropists in some detail in the book for two reasons. First, it shows how modern philanthropy has for centuries been driven by ideas from the business world. Second, it shows that golden ages of entrepreneurial wealth creation are typically accompanied by golden ages of philanthropy. Looking at the expansion of entrepreneur-led businesses not just in America but around the world, if history repeats itself again, the current golden age of philanthrocapitalism is only in its infancy, and may prove to be the most golden of them all.