Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

The greatest 20th century donor you've never heard of

By Martin Morse Wooster - posted Wednesday, 2 August 2006


During World War I Rosenwald served as a volunteer. He spent a year working on the Committee for National Defense, an advisory committee of CEOs that helped check waste and fraud in the massive purchases the government made to equip the troops headed for France. In the summer of 1918 Rosenwald went to the front, giving inspirational speeches to soldiers (including those in segregated black units) about how life would be better after they had won the war. Travelling in a uniform without insignia, Rosenwald told the generals he met that he was “General Merchandise”.

Rosenwald described his typical speech to a reporter from Survey magazine. He began by reading letters from governors and senators cheering the troops on. Then he spent the last 15 minutes of his talk giving a more substantial message. “I generally spend the last 15 minutes to tell them what they must make of America when they return - a real nation, all belonging to one another. They are demonstrating to the army that men from all places have their faults and their virtues, but all are made of good stuff. It is the same way with nationalities. There should be no more prejudices against people from any country if they become Americans. I speak of civic matters and politics. I often show what a disgrace it is to our country to treat the negro as we do, and not give them a square deal, such as they like to have.”

Against perpetuities and endowments

As his philanthropic projects progressed, Rosenwald also perfected his philosophy of refusing to support perpetual foundations and endowments. He had held this belief for a long time. For example, Rosenwald had long been a generous contributor to Hull House, which helped poor people in Chicago get clothes, food and jobs. But when Hull House launched its first capital campaign in 1912, Rosenwald refused to contribute to the creation of a Hull House endowment.

Advertisement

“I am opposed to permanent or what might be styled the never-ending endowment,” Rosenwald told the American Academy of Political and Social Science in 1913. “Permanent endowment tends to lessen the amount available for immediate needs, and our immediate needs are too plain and too urgent to allow us to do the work of future generations.”

In the 1920s Rosenwald continued his efforts to fight perpetuities. In 1925, he agreed to give a million dollars to the University of Chicago, provided that the school did not use any of the money to increase its endowment. The school created a special “suspense account” for Rosenwald’s donations, and agreed that it would spend $100,000 from this account each year until the gift was exhausted. Rosenwald contributed another million, and the university spent out the suspense account by 1942.

When Rosenwald decided to create the Julius Rosenwald Fund in 1917, he insisted that the fund spend itself out of existence no later than 25 years after his death. The fund ceased to exist in 1948 - ten years ahead of Rosenwald’s deadline.

Rosenwald’s belief in term limits for foundations attracted the attention of editors of national magazines, who solicited articles from him. With the assistance of journalist William C. Rice, Rosenwald expressed his ideas in “Principles of Public Giving,” published in the Atlantic Monthly in 1929. It is the most important article by a philanthropist since Andrew Carnegie penned “The Gospel of Wealth” in 1889.

“I think it inevitable that as trustees and officers of perpetuities grow old they become more concerned to conserve the funds in their care than to wring from these funds the greatest possible usefulness,” Rosenwald wrote. “That tendency is evident already in some of the foundations, and as time goes on it will not lessen but increase.”

“The cure for this disease is a radical operation,” Rosenwald concluded. “If the funds must exhaust themselves within a generation, no bureaucracy is likely to develop around them.”

Advertisement

Although Rosenwald’s article was controversial at the time, relatively few donors took Rosenwald’s advice and put term limits on their foundations. Rosenwald’s son-in-law, Edgar Stern, and his grandson, Philip Stern, set up foundations with term limits. So too did Pittsburgh industrialist Maurice Falk.

Yet Rosenwald’s arguments are as pertinent today as they were in 1929. Donors should ponder the questions Rosenwald posed. Is it better to spend your fortune now, when you can ensure that your wealth will be given away as you intend? Or do you believe that, after your friends and associates pass away, professionals who did not know you will continue to honour your intentions?

In an article published in 1930, Rosenwald predicted that his warnings against perpetuity would endure. “Real endowments are not money, but ideas,” Rosenwald wrote. “Desirable and feasible ideas are of much more value than money.”

  1. Pages:
  2. 1
  3. 2
  4. Page 3
  5. All

First published in Philanthropy magazine on May 1 2006.



Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

2 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Martin Morse Wooster is a graduate of the conservative National Journalism Center, and a prolific writer spanning his interests from science fiction writing to philanthropy and education policy. Wooster's career has included stints as the Washington editor of Harper's, as well as editorial roles with conservative publications, Reason, and American Enterprise as well as a columnist for the Washington Times, a special correspondent for Network News Service and as Washington investigator for Robin Moore.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 2 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Advertisement

About Us Search Discuss Feedback Legals Privacy