More than any other country, the United States looks to philanthropists and their giving to fill the gaps – cultural, social, civic, educational – left unattended by either the market or the government. Over the years, this giving by both corporations and family became an economic force, especially in the Midwest. But more recently, much corporate giving is looking like guilt money paid by companies trying to make up for the social damage caused by their day-to-day activities.
At a time when the market is staggering and government is cutting back, philanthropy looms even larger in American life, and deserves a closer look.
Almost alone of the major nations, the United States has long encouraged philanthropy with tax breaks. For most taxpayers, this makes sense only to those who itemize deductions. For the big donors, it can result in big tax deductions, both on income and estate taxes.
Hence the huge foundations, such as MacArthur, Ford, Lilly and the others who play such an outsized role in American life. Hence also the Carnegie libraries and the many university halls, hospitals, stadiums and theaters named after wealthy and generous patrons. Hence the pledge drives by public radio and the begging letters to college alumni, right down to the pressure on parents to chip in with money or a gift to their children’s school.
This public generosity is virtually unknown in most countries, where national or local governments are more likely to pay for the hospitals, opera houses and stadiums. Until about 20 years ago, Oxford University in England didn’t even have a list of its alums, rich or otherwise. Claude Monet’s home at Giverney, northwest of Paris, was restored by philanthropic giving – but almost all the donors were Americans, not French. In recent years, European governments too have cut back on spending, leading organizations there, such as Amsterdam’s Concertgebouw, to seek American fund-raising expertise.
So when big corporations such as Walmart and Exxon-Mobil lead the list of major philanthropies, they’re operating in a tradition pioneered by 19th-century magnates such as Carnegie and Rockefeller. Even then, these benefactors combined private philanthropy with public greed. Some of the biggest givers were robber barons by day.
This is some necessary background to the news that today’s leading corporate donors are foundations set up by companies, especially banks, whose business practices helped bring on the recession and whose in-house charity extends too often to executives who bear much of the guilt for that recession.
A recent article on Goldman Sachs’ giving made it clear that its generosity is rooted in a desire to polish an image badly tarnished by rapacious and possibly illegal activity during the financial crisis.
It seems to be a classic case of people – in this case, a corporation – doing the right thing for the wrong reasons. In other words, it’s hard to view much corporate philanthropy with anything other than a mixture of gratitude and cynicism.
Five of the top ten corporate philanthropists are banks. Wells-Fargo leads the list, with $315 million in corporate giving. Others include Goldman Sachs, Bank of America, J.P. Morgan Chase and Citigroup. Other big givers include oil companies like Chevron, and Exxon-Mobil and outsourcing manufacturers such as General Electric.
Up there in the top 50 are major Midwestern corporations such as Caterpillar, General Motors and Ford. These firms are perfect examples of the split emotions that such giving generates among people who care about society, both in the nation and in the Midwest, and where it’s going.
Say what you want about Carnegie and the other robber barons of their era, their cold-blooded and grasping business activities helped build this nation and created millions of jobs. They may not have been nice guys, but what they did built the industries, railroads and cities that powered America for a century. Their business practices, based on self-interest, helped make America the strongest nation on earth and put the Midwest at the very heart of that economy.
Big corporations and the families that owned them literally built many Midwestern cities: Muncie, Indiana, once dominated by Ball Glass and the Ball family, is an example. Today, their benefactions, such as Ball State University and Ball Memorial Hospital, remain but both the family and the company are gone, and Muncie is the poorer for it.
In that earlier era, this philanthropy was icing on the economic cake. Now, in this global era of outsourcing, what many of these companies do by day is causing immense damage to their communities and the region.
The Midwest is littered with battered cities, such as Muncie, left behind when the company that supported them went away. Those who are still here too often are demanding and getting give-backs and low-pay deals from their workers that undercut the buying power of once-prosperous towns.
Once, these companies benefitted the Midwest both professionally and philanthropically. As the professional benefit wanes, the philanthropy remains. Caterpillar is slashing Midwestern wages as far and fast as possible, but it remains a valued philanthropic presence, especially in its hometown of Peoria, Illinois.
This amounts to two different forms of corporate citizenship. As we’ve written here, too many of the big corporations that once dominated the Midwest and American economies still dominate our economy – but it’s a global economy now. These corporations are no longer American companies, even if they remain headquartered here. They’re global corporations now and too often have abandoned any responsibility – at least in their day-by-day activities – for the Midwest or for the communities they once called home.
Philanthropy can help. Certainly, no community or institution that benefits from this corporate generosity is asking it to go away. But no philanthropy, sincere or otherwise, can ever substitute for a good job.