NEW YORK — By using-tax deductible gifts to create institutions, especially universities and think tanks, the rich wield enormous influence over which ideas rise to prominence and become public policy, according to scholars engaged in pioneering studies of wealthy philanthropists.
When these scholars gathered the other day to debate "The Impact of Foundation Philanthropy on Society Here and Abroad," they met, fittingly, in the shadow of Wall Street. (Partly because of surging stock prices, the number of American millionaires may reach 1 million this year.)
Much of the discussion focused on the alliance formed early in this century between the first of the big foundations and what at the time were emerging social sciences, especially economics and sociology.
Money and Scholarship
This alliance of money and scholarship fostered new ideas about how to deal with social problems, the speakers agreed. They also said that the successes achieved by medical researchers who relied on foundations for money blunted criticism of monopolistic practices, which men like John D. Rockefeller Sr. used to amass their fortunes.
"The most telling characteristic of philanthropy when conjoined to wealth is its potential to actively create the public agenda by directly producing the institutions capable of achieving that public agenda," according to Paul G. Schervish, Andrew Herman and Lynn Rhenisch of Boston College's Study on Wealth and Philanthropy, which is interviewing 125 millionaires about their giving practices.
"Wealth affords individuals the means for moving from being simply consumers of the social agenda to being producers of it," Schervish and his colleagues wrote.
Schervish said that when rich individuals create institutions--from elite schools such as Harvard and Stanford to museums--Americans of lesser means get solicited to donate to sustain these institutions. In addition, the network of close ties between these tax-exempt institutions and government brings taxpayer moneys through grants and contracts.
"The small per capita contributions by middle- and lower-income groups for religious, political and social purposes may be conceived of as consumption activities . . . consumer responses to pre-established needs and goals," Schervish said.
Just as entrepreneurs start businesses with pools of capital, he said, "the philanthropic efforts of the wealthy are able to 'produce' social movements, political candidates, grass-roots organizations, low-income housing, hospital wings, science reporting on public radio, libraries, research projects, religious doctrine and the easing of hunger."
Schervish spoke at the fourth Spring Research Forum, sponsored by the United Way Institute, an arm of the $2 billion-per-year federated fund-raising movement, and by Independent Sector, a trade association for major charities and the corporations and foundations that give to them.
The forum, conceived by Virginia Hodgkinson, director of the National Center for Charitable Statistics in Washington, has become the major conference for scholars examining America's $200-billion-per-year nonprofit sector.
This year for the first time, Marxist scholars such as Schervish and Edward H. Berman, a University of Louisville education professor, were invited to present their views alongside those of mainstream thinkers like Barry D. Karl, a noted University of Chicago historian.
The Marxists and the mainstream thinkers expressed considerable agreement about facts and they concurred that, through charitable giving, the rich exert enormous influence in shaping public policy and values. But their interpretations of what this means for society were as far apart as--well, as the incomes of the rich and the poor.
Do the big foundations open doors of opportunity for millions of people, as Karl suggested, advancing society's knowledge and wealth by supporting higher education and encouraging scientific research?
Or do the big foundations use their grants, as the Marxists argue, only to open those doors of intellectual inquiry that the rich believe will help them maintain their money and power?
Since the huge American foundations were created near the turn of the century by men such as Rockefeller and Andrew Carnegie two contradictory themes have characterized American views of foundations, according to Karl.
"Foundations have been viewed as both conservative supports of reactionary capitalism and as Trojan horses carrying left-wing ideology into the center camp of American free enterprise," according to Karl. "They have been accused of fomenting revolution and suppressing it."