The Power of Our Democracy? Philanthropy
Above: Detroit’s skyline on July 18, 2013, when the city became the largest to file for bankruptcy. More than a dozen private foundations helped protect a municipal pension fund, prevented the sale of masterpieces in the Detroit Institute of Art and, with the help of public sector partners, helped put the city onto a sounder footing (Bill Pugliano/Getty Images).
It is particularly fitting that the exhibit “Giving in America” is on permanent display at the Smithsonian’s National Museum of American History (referenced in Advancing Philanthropy, Spring 2017, Page 14). Philanthropy in the United States is vibrant and an integral part of this nation’s culture. We have one of the most mature and sophisticated systems of giving in the world. We also have a history of incredible generosity, comparatively low taxes and a tax code that currently promotes private philanthropy to address societal ills and foster our culture and quality of life in a way that the government cannot advance on its own.
While generosity and giving are by no means uniquely American (check out Lilya Wagner’s fantastic new volume, Diversity and Philanthropy), the United States has a history of great philanthropists such as former presidents George Washington and Benjamin Franklin and others such as Mary Elizabeth Garrett, Andrew Carnegie, Swanee Hunt and Helen LaKelly Hunt, Bill and Melinda Gates, Warren Buffett and Mark Zuckerberg and Priscilla Chan. Over time, philanthropy has evolved, and in today’s world, it takes many forms, from volunteering to advocacy to financial contributions. What endures is that giving and generosity are interwoven into our heritage.
In the months since the 2016 election, there have been a number of unexpected changes. And there are likely to be more. Whether it is the discussion of eliminating funding for the National Endowment for the Arts, the National Endowment for the Humanities, national parks or particular healthcare facilities and programs, this period in American history is one of uncertainty. It may also be recorded as one of the most philanthropic—because we value the physical, mental, emotional and spiritual well-being of our fellow beings. It is our culture to care for one another and to give generously in ways that will feed, heal, educate, uplift and inspire. A healthy and culturally rich nation is a wonderful place to live, and it contributes to overall economic vitality.
The Value of the Nonprofit Sector
The nonprofit sector serves our community. We provide for basic needs, healthcare and education. We offer a forum for the arts and civil discourse and a “place” for recreational enjoyment. In 2016, the sector made up 5.4 percent of the gross domestic product (GDP) and accounted for 10 percent of jobs in the United States (according to the National Philanthropic Trust). We employ productive workers who earn salaries and contribute to our economy.
Individuals, including government officials, who benefit from our services agree that we offer significant value and are willing to pay for it. In fact, 73 percent of the nonprofit sector’s revenue is made up of program service fees, admissions and government contracts (National Philanthropic Trust). We provide services that the government has historically agreed are better provided by our organizations, or in partnership with us. The U.S. government is largely not equipped with the resources and relies upon nonprofit organizations, in partnership with private funders, to provide for basic needs, education, the preservation and stewardship of cultural treasures and to protect human rights.
Culture brings people together; it is what unifies a nation and is utterly patriotic. Philanthropy is also part of our cultural ethos.
Not only are patrons willing to pay for our services, they are willing to give of themselves through volunteerism and financial contributions. Per Independent Sector, in 2014 approximately 25 percent of the adult population gave 7.9 billion hours of service worth $184 billion. Coupled with $373.25 billion in financial contributions (Giving USA) for the most generous year ever in 2015, it is clear that Americans value the goods and services that nonprofit organizations provide for the betterment of their communities.
Value to Our Democracy Money Can’t Buy
Writer, environmentalist and historian Wallace Stegner said that our national parks are “the best idea we ever had. Absolutely American, absolutely democratic, they reflect us at our best rather than at our worst” (National Park Service).
National, state, county and city parks are great equalizers. They are accessible and largely free, bring city-dwellers into nature, provide education and bring people of all walks of life together in community. As the custodian of our national parks and monuments, the National Park Service is the caretaker of our nation’s heritage and culture. Every day, park rangers and volunteers preserve and interpret our diverse cultural resources for thousands of visitors. They provide context to American history.
The U.S. National Park Service is arguably one of the most patriotic and culturally significant institutions in our country. Not incidentally, this bureau of the Department of the Interior preserves our national culture in part by private philanthropy through its partnership with the National Park Foundation.
Culture brings people together; it is what unifies a nation and is utterly patriotic. Philanthropy is also part of our cultural ethos. Beyond the national parks, our heritage and culture are encouraged and preserved by institutions large and small. These institutions are supported by philanthropy and, in many instances, are also underwritten by government grants and contracts. In the United States today, there is a natural symbiosis—and one that is not always readily visible—between the public and private sectors that affords for basic needs and enhances our quality of life.
In a nation where philanthropy is valued and encouraged, it is unconscionable to imagine that the federal agencies developed specifically to preserve our culture and further learning, creative thought and research would be dissolved. During periods of discussion around tax reform, presidents such as Lyndon B. Johnson and Dwight D. Eisenhower, as well as members of Congress, have taken a stand favorably in support of philanthropy relative to the cost to the treasury.
Arts and humanities organizations are not the playgrounds of the elite. They are essential to American life, the backbone of our communities, the wellsprings from which our future will unfold and upon which our liberty depends. It is the partnership between the private philanthropy for these institutions and public funding that allows our culture to thrive.
In Cincinnati, where my firm’s national headquarters resides, the leaders of three visual arts institutions—all of which rely both on public and private funding—have come together with a united call to action, stating, “Cincinnati’s universities, concert halls, museums, schools and design centers are patriotism in action. They define who we are as a people and a nation. The freedoms upon which they stand are what we as Americans rise up against all invaders to defend” (Cincinnati Enquirer, April 3, 2017).
Philanthropy’s Unusual Solution
We innovate. The term is so commonplace today that it has all but lost its meaning, but in Detroit, philanthropy innovated to save the city. In July of 2013, the City of Detroit filed for bankruptcy, with an estimated debt between $18 billion and $20 billion. A host of stakeholders began working together to resolve the situation, which included a dramatically underfunded pension fund.
One of the city’s principal assets was the internationally significant collection of the Detroit Institute of Art. At least a portion of the collection was at risk of being sold at auction to cover the pension payments. In an unprecedented effort, more than a dozen private foundations, including the Ford Foundation, the John S. and James L. Knight Foundation and The Kresge Foundation, came together and pledged more than $800 million to help relieve the institute. This represents the first instance in which private philanthropy bailed out a public pension fund. It was also an enormous cultural and financial benefit to the city and its pensioners, as well as to the nation, that one of America’s great collections remains intact.
Our nonprofit organizations provide safety net services, ensure the health of our communities, stimulate thought and discourse and bring us together. The nonprofit sector is an economic driver, the keeper of our humanity, the sentinel of our culture and an innovator for our future.
What’s Next …
The future of our nation is unclear. Our executive and legislative bodies are behaving unexpectedly, and our judiciary is likely to be populated by appointees from a new administration. All signs point to an unpredictable future for our organizations and our sector. What are we as fundraisers to do to preserve the stability of our organizations and our ability to continue to serve our patients, clients, patrons and visitors?
We must remember what makes our culture and our philanthropy uniquely strong. We must consider our New World sensibilities brought into focus through the Old World lens of Alexis de Tocqueville in his observations about life in this country. Namely, philanthropy is at the heart of the power of our democracy, and volunteerism is the essence of what makes philanthropy in the United States unique and great.
It is our job as professionals in the field of philanthropy to build relationships with those in our midst who seek to realize our organization’s vision for the betterment of our communities. It is our role to encourage, motivate and support the voluntary action of service, advocacy and financial support.
Elizabeth Kohler Knuppel is president and chief executive of Skystone Partners. A former board member of AFP’s Cincinnati Chapter, she helped found the chapter’s Ethics Committee and served on International’s Publishing Advisory Committee. A graduate of the University of Cincinnati College-Conservatory of Music, Liz volunteers for the Women’s Committee of the Cincinnati Parks Foundation, is a member of Leadership Cincinnati Class 39 and the WE Succeed Class 14 and won the Cincinnati Chamber of Commerce WE Celebrate Woman of the Year-Entrepreneur Award in 2015.