Interview - Adam Meyerson

In Character Conversation

Adam Meyerson is the president of the Philanthropy Roundtable, a national association of more than 500 individual donors, corporate giving representatives, foundation staff and trustees, and trust and estate officers. Before coming to the Roundtable, Meyerson was vice president for educational affairs at the Heritage Foundation, where he worked on civil society projects and edited Policy Review. Meyerson has also been an editorial writer for the Wall Street Journal, as well as editor of the Journal’s “Manager’s Journal” and “Asia” columns. He is a graduate of Yale University and Harvard Business School. We spoke with Mr. Meyerson in Washington, D.C., in March.

.....

In Character: Is America the most charitable country on earth?

Adam Meyerson: America is off the charts in how charitable we are compared with other countries, and this has been true from the very beginning of our history. A lot of attention has been focused in recent months on the extraordinary outpouring of generosity to the victims of Katrina. But the $3 billion that the American people gave voluntarily for the victims of Katrina isn’t unusual at all. In fact, the American people give $3 billion to charity every four-and-a-half days. Charity is just part of the character of American life. Americans give about $250 billion a year which, the last time I looked, was about twenty times as much as we spend on sports events, about three times as much as we spend on gambling, and about twice as much as we spend on consumer electronics.

Why is America such a generous country? First, of all the economically prosperous countries in the world, we are probably the most religious country, and religion and charity are highly correlated. Americans who attend religious services once a week give three times as much of a percentage of their income as those who do not attend religious services regularly. They give more not only to religious organizations, but to secular organizations as well by comparison with non-churchgoers.

Charity and philanthropy in America are also part of the can-do spirit of a free society. Americans believe in the power of the individual, and of voluntary associations of individuals, to solve problems and make a difference. Americans don’t wait for centralized government to lead the way; we take charge of the life of our communities, whether through business entrepreneurship, local self-government, or civic and charitable associations. Charity and philanthropy in America are inherently linked to a respect for the dignity and creativity of the individual. And other countries are likely to become more charitable as confidence in the individual spreads from America around the globe.

IC: We know that Americans still give only about 2 percent of national income to charity, which has remained at that level since the Depression. What do you think it would take to increase charitable giving, even to 3 or 4 percent of the national income, and is that actually a desirable objective?

AM: It’s a very desirable objective. An increase in the rate of American generosity would benefit givers. It would benefit recipients. And it would strengthen the independence of private institutions.

IC: What do you mean by independence?

AM: The freedom to experiment, to take decisive action without being shackled by bureaucratic rules, to stick to one’s mission even if that isn’t politically popular. Organizations that are supported by private funds, particularly by a diversity of private funds, have a freedom of action that is missing from organizations that depend on winning legislative majorities for their funding.

One reason America has the best universities in the world is not only because we have so many private universities, but also because many of the great public universities are privately funded. The great flagship state universities, such as the University of Virginia or the University of Michigan, frequently get more money from private sources than they do from state government. That gives them tremendous independence.

In recent decades, government funding has come to dominate many areas of American life that historically have been the province of private charity and initiative. It would be very useful to have a great national debate about government programs such as FEMA’s disaster relief, or legal services for the poor, or faith-based social service initiatives, or the National Endowment for the Arts, or medical care for the uninsured, and to ask which of these functions could be more effectively delivered through privately funded organizations.

How do we increase philanthropic giving? A good place to begin is to learn from the success of churches and other houses of worship, and of colleges and universities, in capturing the charitable imagination of the American people. They do this by appealing to Americans’ highest values and aspirations, not their guilt. A little over a third of all charitable giving in this country goes to religion. A little over a tenth goes to higher education. That includes giving to alma mater, but interestingly, almost as much giving to colleges comes from nonalumni – who see college support as an avenue of opportunity for their communities – as it does from alumni.

IC: What are your thoughts on that phrase you often hear, “giving back to society”?

AM: I hate it.

IC: Why do you hate it?

AM: It implies that those who have made money have taken from society. In fact, they have already given to society. They are great entrepreneurs. They’ve helped create wealth. They’ve helped to create jobs and opportunity. Bill Gates is doing wonderful work as a philanthropist in healthcare and K-through-12 education. But Bill Gates doesn’t have to give back. He has already given, by creating an operating system that brings the benefits of the information revolution to everybody. His philanthropic work is thus another way to give; it is not “giving back.”

I think there’s an interesting question of why so many entrepreneurs in American history have become great philanthropists. This tradition goes back to Ben Franklin, as well as to Carnegie and Rockefeller.

Great business entrepreneurs, of course, have the resources to be great philanthropists. They also have the vision. They have the passion to create institutions. And they have the leadership ability and the commitment to serving others. In a market economy, the only way to make money is by serving others. The great entrepreneurs have been very successful in service through business, and therefore it is natural that they would explore service in some other form, which includes philanthropic leadership.

IC: As most people know, if you make a charitable donation, you can take it as a tax break on your income tax. But how much of charitable giving depends on the fact that you get a tax break for giving? If the charitable deduction were to be repealed from the tax code, what effect would that have on charitable giving?

AM: America was the most charitable country on earth long before there were any tax incentives for charity. Many of the great philanthropic institutions started in the nineteenth century, including most of our private universities, and many of our great hospitals, symphony orchestras, and art museums were started without any tax advantage. Of course, if we took away the charitable tax exemption, while leaving the rest of our current tax structure in place, we would reduce the incentives for charitable giving. But in the long run the future of charitable giving in this country does not depend upon tax incentives for charity.

IC: Could you give us a brief description of the work of your organization, the Philanthropy Roundtable? Why do you encourage donors to give money in their lifetimes rather than as bequests?

AM: We are an association of about 500 philanthropic foundations and very charitable families. Our mission is to help donors advance freedom, opportunity, and personal responsibility, both in this country and abroad. We also have a special interest in helping donors achieve their philanthropic intent. Unfortunately, the sad history of the modern foundation is the history of one great foundation after another ignoring or in some cases explicitly violating the most cherished principles of their founders. One important reason for donors to give while living is to make it much clearer, if they choose to establish a foundation, what they actually want to do. Similarly, since many donors are entrepreneurs and have great business wisdom, giving while living gives them an opportunity to apply their institution-building wisdom to the practice of philanthropy.

IC: What are the most important questions that anyone who wants to give money should ask before he decides where to send his money?

AM: What institutions and principles do I really cherish and want to sustain for future generations? What do I most want to change in our country and in our culture? If I start a foundation, whom can I choose as trustees whom I deeply trust and who will share my most deeply held principles? And, whether I have $100 million to give or just $100, how can I focus my giving to really make a difference?

IC: What are the greatest moral temptations in philanthropy?

AM: One danger is pride, especially self-congratulation about one’s good intentions. Charitable giving is a virtue. But sometimes donors can get so carried away with how blessed it is to give that they fail to set standards and expectations for those they are trying to help. The truly generous donor helps people to help themselves. This is also a field of enormous intellectual smugness.

IC: Why is that?

AM: There isn’t much accountability in philanthropy. Unlike businesses, philanthropists don’t have to satisfy customers. Unlike political leaders, philanthropists don’t have to satisfy voters. This freedom from meeting a market or political test gives philanthropists an enormous opportunity to develop innovative ideas and programs – and many donors use this opportunity wisely. But some fall prey to what is sometimes called philanthropist’s disease. Particularly if you are a large donor, everyone laughs at your jokes. Everyone tells you how brilliant you are. There’s enormous flattery with all the attendant problems that can accompany that. I think there is also sometimes a temptation among philanthropists to take credit for the work that their grantees do. Of course, philanthropists can play a very critical role in helping to define new fields and new initiatives, but the crucial work is done by the grantees. The role of the philanthropists is to help them.

IC: We have been talking about donating money, but thinking about generosity more broadly — in terms of donating one’s services or time rather than just money — how generous do you think Americans are?

AM: I’m continually amazed by the generosity of the American people. One example is our openness to immigrants. There have obviously been some historic exceptions to this but America has welcomed immigrants more than any other country; for most of our history any immigrant from any part of the world and from any religion has always been welcomed as long as he or she has been willing to work hard and to embrace the American political tradition.

A second kind of generosity has been our magnanimity to former enemies. After World War II, we did not treat Germany and Japan as countries that had to be punished or dealt with vindictively, which is what’s happened to losers of wars through most of history. We wanted to rebuild Japan and Germany as self-confident, economically vibrant countries, and we wanted to make them our allies and our trading partners, not our subjects. That’s an extraordinary form of generosity. We are trying to do something of the same thing in Iraq today, though we are not finding much success so far. But that’s our objective and it’s a noble and generous objective.

A third aspect of our generosity is that America has allowed more opportunity for more people than any other country in the world. This has taken many forms. One I’m especially impressed by is that this is a country of second chances, third chances, fourth chances. In many other countries, such as France or Japan, how well one does in high school almost determines what one’s future is. In America you can start a company at age fifty-four after multiple bankruptcies and create McDonald’s.

Our civil society is also filled with institutions, such as Alcoholics Anonymous, that exist to give people a second or third chance. The attitude in America has always been that we will help those who want to help themselves. This generosity often takes the form of volunteering as a mentor or counselor. It also involves being willing to hire people whom many others in other countries would give up on.

However, I think there are two aspects of our society today where there’s extraordinary selfishness and a breakdown of generosity.

IC: Where would that be?

AM: One is the relationship between the sexes. The breakdown of marriage is one of the greatest crises facing this country, and it results more than anything from men and women treating each other too selfishly.

Second is our education system, which has always been one of the greatest examples of American generosity. We were the first big country in the world to really open up a system of education for everybody. Now we have a system of K-through-12 education that desperately fails large portions of the student population. This is a solvable problem but it is not being solved. Why? There is a great deal of selfishness on the part of many of those in existing educational institutions who are looking after their own interests rather than those of the children they are supposed to be serving.

IC: This is a good lead-in to what will be my last question, which is, when you think about generosity more broadly, as a virtue that we want to encourage, how do we do that for the younger generation? This is a generation that has been raised by the media and has come to understand giving their time as something that has to be done in high school in order to get into college — a resume-building activity rather than a truly voluntary thing. So the question is, how do we inculcate the virtue of generosity in the younger generation?

AM: Churches and other religious institutions have a key role to play here. It is also important to support organizations, such as the Boy Scouts, that reach millions and have amazing track records in building character and encouraging service. One of the most interesting developments on college campuses now is the attractiveness of organizations such as Teach for America. Something like 10 percent of the graduates of top colleges apply to Teach for America. Teach for America has 3,000 positions and 18,000 applications for these positions. This is not a volunteering job, but it is a quasi-volunteering job, and it suggests that there is a tremendous amount of latent generosity and service that is ready to be tapped. Institutions such as Teach for America, or Habitat for Humanity, have been effective in capturing the generous impulses of young people. We need to learn from their examples.