Money is a powerful tool for progress but it alone cannot
provide permanent solutions. When discussing how the wealthy give back to
society, we are frequently guilty of possessing too narrow a focus. Many of
those individuals fortunate enough to be at the “top of the pile” have often
invested capital more wisely, had access to many years of elite education and
travelled extensively. This triumvirate of attributes can help to yield
insights that make wealthy people vital to any discussion on how to improve
society in whatever form we envision.
Philanthropy is more effective when combined with vision. There
is a danger that we can become so focused on the explicit benefits of the
wealthy to society that we forget about their implicit benefits; that is, their
intellectual and human capital is often overlooked in favour of their material
and financial capital. Historical experience proves this to be unwise. A series
of philanthropic ventures from earlier eras show us that harnessing
the intellectual and human capital to define a vision and putting a plan in
place on how to get there, is fundamental.
The example set by one celebrated philanthropist, Andrew
Carnegie, provides a model for giving by the wealthy in the twentieth-first
century and beyond. Carnegie was a steel magnate, who saw the long-term
benefits his money could bring if managed properly. In his autobiography, he
wrote, “There was no use to which money
could be applied so productive of good to boys and girls who have good within
them and ability and ambition to develop it, as the founding of a public
library in a community which is willing to support it as a municipal
institution. I am sure that the future of those libraries I have been
privileged to found will prove the correctness of this opinion.”[i]
 |
| Andrew Carnegie: A visionary. |
Carnegie’s vision, formed as early as the late 19th
century, was to provide the gift of knowledge to under-privileged children who
might not otherwise have had a chance to attain an education. The best way of
reaching out to as many of these as possible, he believed, was through funding
public access libraries. His vision at the outset was admirable in itself but
how he intended to get there was extremely well-thought-through. Every decision
taken was motivated by the vision. Long before the term was coined, Carnegie had
effectively put in place a precursor of public-private partnerships.
Before providing funding, Carnegie ensured that towns themselves
were willing and able to actively engage in the process of bringing the library
to reality. Every application for Carnegie-provided funding involved answering
a rigorous “schedule of questions.” The ultimate aim of these was for Carnegie
and his advisors to establish if a library could be sustained by the town in
question[ii]. This
schedule included an exhaustive list of questions on the town´s existing public
and private libraries and what tax measures were being put in place to run the
new library. An example of which is that the town was required to match his
donation, effectively doubling his philanthropic wallet and ensuring their
“buy-in” to the project.
His funding was not made on a one-off lump sum basis, but rather
a series of payments as separate milestones were reached. Funding increased as
the project neared completion to incentivize progress. His funding strategy
also involved using data from the national census to ascertain the population
of the town receiving his money. Based on this information, he then provided
around $2 per member of the population, which was generous on one hand, but an
amount which could be matched by local governments on the other.[iii]
By the time of his death, there were over 2,500 “Carnegie
Libraries” in the English-speaking world.[iv] The
existence of so many of these libraries even today is testament to the power of
insightful long-term investing. If Andrew Carnegie had donated all of the money
to governments at the outset of his philanthropic work, would they have
provided the libraries he did? It’s highly unlikely. Unfortunately, few public
officials have the kind of vision that Carnegie could provide. Fewer still are
given the mandate to make brave decisions whose payoffs are immense, but not
necessarily short-term. This allows me to return to my initial thesis.
Carnegie’s example vividly illustrates the importance of philanthropy
combined with vision. His legacy is enhanced with every new reader in one of
his libraries. The considerable means he provided were invested more wisely
than most could have imagined. And just as his philanthropy represented a great
investment, Carnegie’s successors in twenty-first century society count among
them the world’s greatest investors. The decisions they take on a daily basis
to both manage and invest their financial capital are not the obvious ones:
they employ vision. On this basis, perhaps we should look more to our
wealthiest individuals for this incredibly valuable resource rather than what
sits in their bank accounts.
[i]
Carnegie, Andrew and John Charles Van Dyke. The Autobiography of Andrew
Carnegie. Boston, New York, Houghton Mifflin Co., 1920. Page 29.
[ii]
Nasaw, David. Andrew Carnegie. Penguin Books, 2007. Page 606.
[iii]
Van Slyck, Abigail. Free to All: Carnegie Libraries and American Culture,
1890-1920. University of Chicago Press, 1997. Page 22.
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