June 28, 2006
American Philanthropy Posted by John Steele Gordon at 04:55 PM EST This week, Warren Buffett, the world’s second-richest man, pledged to give away 85 percent of his $44 billion fortune, the greatest act of eleemosynary generosity in the history of the world. (Before you weep for his three children, reflect that 15 percent of $44 billion is $6.6 billion, enough to keep the wolf very comfortably away from their doors.) Most of his money, in $1.5 billion annual increments, is going to the Bill and Melinda Gates Foundation, which already has assets of $29 billion, making it nearly three times as large as the second-place Ford Foundation. Mr. Buffett will require the foundation to spend the annual gifts by the end of each year rather than treat them as additional capital.
The sheer size of Mr. Buffett’s gift is awe-inspiring. Even allowing for inflation, it is orders of magnitude larger than any previous charitable gift. Andrew Carnegie, who once wrote that “a man who dies rich dies disgraced,” gave away perhaps a total of $500 million in his lifetime. That might be very roughly equal to $7.5 billion in today’s money. Nathan Rosenwald, of Sears, Roebuck, gave away more than $60 million in his lifetime. Much of John D. Rockefeller’s staggeringly large fortune has gone to such good works as the University of Chicago, Rockefeller University, and the national parks at Jackson Hole, Wyoming, and St. John in the U.S. Virgin Islands.
But Buffett’s great gift to the world is just the latest instance of a long American tradition, a tradition that is largely unknown in Europe, of the very rich giving large sums of money away to worthy causes. George Peabody (1795-1869) and Peter Cooper (1791-1883) began the tradition. Peabody, who was a banker in London for the last thirty years of his life, established the Peabody Institutes in Baltimore and Peabody, Massachusetts (Peabody’s birth place and named in his honor), the Peabody Museums at Yale and Harvard, and the Peabody Education Fund to help the devastated South after the Civil War. Further he built tenement housing for London’s working poor. Queen Victoria offered to make him a baronet, virtually unprecedented for someone who was not a British subject, but he modestly declined the honor. When his body was returned to the United States for burial, the ship was accompanied with an honor guard of British and French warships. Peter Cooper invented the idea of night school so that working people could continue their educations and established the Cooper Union in New York, one of the country’s premier engineering schools and just about the only four-year college in the United States that charges no tuition.
One need only stroll down New York’s Fifth Avenue from the Museum of the City of New York at 103rd Street, past the Cooper-Hewitt Museum, the Guggenheim Museum, the Neue Galerie (which, thanks to its founder, Ronald Lauder, has just acquired Gustav Klimt’s Portrait of Adele Bloch-Bauer, for which he paid $135 million), the Metropolitan Museum, the Frick Collection, The Museum of Modern Art (just off Fifth at 53rd Street), to the New York Public Library at 42nd Street, the largest library in the world not owned—and funded—by a sovereign government, to get a sense of how great this American tradition has been. Most other American cities have been enriched as well by this tradition.
Not every rich American, of course, has been known for his generosity. When a group of men approached John Jacob Astor for a contribution to some worthy cause, he rather grumpily wrote out a check for $50. One of the men, looking with some dismay at this paltry sum from the richest man in the country, said, “But Mr. Astor, even your son William gave us a hundred dollars.”
“Ah, well,” said Astor. “But William has a rich man for a father. I am a poor man’s son.”
Even so, Astor paid for the magnificent reredos behind the altar at Wall Street’s Trinity Church and, on his death, left $400,000—a huge sum at the time—to found the Astor Library, now part of the New York Public Library.
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