Perspectives on Donor Legacy: What is it that History Teaches?
Ronald Austin Wells
Legacy. "That which is left." [ <OFr. legacie <Lat. legare "to leave."]
Writing of the uniqueness of family foundations and the variety of philanthropic forms available to them, Paul Ylvisaker has observed, "sooner or later what binds these disparate examples [i.e., the works of family foundations] together is an accumulating tradition of serving a worthy cause." 1,2
A century and a half earlier, in 1819, John Marshall, Chief Justice of the United States Supreme Court, reaffirmed in U.S. law the principle of the inviolability of a testator's charitable wishes:
[I]t requires no very critical examination of the human mind to enable us to determine that one great inducement to … [charitable] gifts is the conviction felt by the giver, that the disposition he makes of them is immutable.
With a touch of light irony, Marshall adds:
All such gifts are made in the pleasing, perhaps delusive hope, that the charity will flow forever in the channel which the givers have marked out for it. 3
Is this hope -- that a gift, for example, that takes the form of a perpetual endowment establishing a private foundation, will "flow forever in the channel … marked out for it" -- "delusive"? Or can a donor be confident that the philanthropic intent of the gift will remain essentially "immutable," and truly be carried out in perpetuity? Will the donor's original intent eventually be obscured by changes in society, shifts in human values, or the mists of time?
1 N.B.: A shorter, unannotated version of this article was published in Living the Legacy: The Values of a Family's Philanthropy Across Generations, ed. Charles H. Hamilton, National Center for Familly Philanthropy Journal, vol. 3. Washington, DC: National Center for Family Philanthropy, 2001. This version is here published with the permission of the National Center for Family Philanthropy (RAW).
2 Paul Ylvisaker, "Family Foundations: High Risk, High Reward," in Conscience and Community: The Legacy of Paul Ylvisaker, ed. Virginia M. Esposito. New York: Peter Lang Publishing, 1999, 373.
3 Woodward v. Dartmouth, 1 U.S. 59, 67 (1819).
Or can a donor help ensure that the philanthropic work he or she initiates will take on a life of its own, evolve, as Ylvisaker suggests, into "an accumulating tradition" and develop a legacy for generations to come?
Answering her own question, Gertrude Stein wrote, "What is that History teaches? History teaches." The history of American philanthropy offers many examples that illuminate how the work of a philanthropic foundation may develop into a great legacy that continues to benefit society.
The examples of such American philanthropists as George Peabody, Andrew Carnegie, Julius Rosenwald, Caroline and Olivia Phelps Stokes, Edward W. Hazen, Charles F. Noyes, and the foundations they established, provide a multifaceted prism through which we may view the questions of donor intent, perpetuity, and legacy. By reviewing the original instructions and subsequent directions taken by these six (four of them family) foundations, we may see more clearly how tensions between the original instructions and subsequent social change can work to create a dynamic and evolving philanthropic legacy.
The First American Foundation: The Peabody Education Fund
In the first half of the nineteenth century, George Peabody (1795-1869) preceded the great capitalists of the industrial revolution in making his fortune. Born in Massachusetts, Peabody was a self-made millionaire who spent most of his banking career in England. Starting as a clerk in a dry-goods store in Danvers, Massachusetts, Peabody built a financial empire that spanned the Atlantic and reached into Continental Europe. He was personally responsible for restoring and strengthening the credit of the United States government after the depression of 1837 and again following the Civil War. Because the American Congress would not appropriate funds, Peabody himself financed the American exhibit at the Great Exposition of 1851 in London, which greatly strengthened British-American trade relations. His biographer Franklin Parker suggests that he "had much to do with preserving the whole system of industrial capitalism at the turn of the century," and indeed that it was Peabody "who originated the very practice of modern philanthropy" as we know it today. 4
4 Franklin Parker, George Peabody: A Biography. Rev. ed. Nashville and London: Vanderbilt University Press, 1995, 201.
By any measure, Peabody's cultural, social, and educational benefactions were monumental and enduring. They include the Peabody Trust in 1862, which provided funds for low-income housing for London's poor, and in the U.S. seven libraries, four institutes, a music conservatory and art museum, a college, and science museums at Yale, Harvard, and Salem, Massachusetts. The principle and example of giving one's "surplus wealth" during one's lifetime, often attributed to Andrew Carnegie, along with the founding of libraries as a socially beneficial philanthropic endeavor, actually originate with Peabody. 5 Although today he is less well known than Carnegie, Peabody deserves the credit for establishing the first formally constituted private philanthropic foundation 6 in the United States, the Peabody Education Fund, dedicated to public schools and teacher education in the eleven Southern states that had formed the Confederacy. The Peabody Fund also has the distinction of being the first American foundation to address the problem of black education in the post-war South.
"On starting in life," Peabody once wrote, "I laid down certain principles, involving the principles of justice, integrity, good faith and punctuality, which I considered as not only morally binding on myself, but as due to my fellow-men, and indispensable to my reputation." 7 Anticipating the modern distinction between philanthropy and charity, he had the insight that "more good was to be done by striking the evils of humanity at their root, than by providing for a few of their victims." Believing that the best way to help the less fortunate was to teach them to help themselves, Peabody understood that the study of art and science are "the great safeguards and purifiers of society." And in a speech at the Danvers Centennial in 1852, he offered a motto to the town: "Education -- a debt due from present to future generations." 8 Foremost among Peabody's traits was his ability to work through others, "consciously eschewing control over his foundations, and trusting to the goodness and acuity of his trustees." 9
5 In his Autobiography, Carnegie himself alludes to Peabody's influence. Although Carnegie's statement in the "Gospel of Wealth" -- "He who dies rich dies disgraced"-- is often quoted as profoundly original with Carnegie, Peabody's quiet practice of that ethic was publicly recognized and admired decades earlier. On a return trip to England in 1867 on the vessel Scotia, for example, Peabody was honored by his fellow passengers with a resolution extolling his philanthropy for the fact that G.P. ''had given his wealth away during his lifetime while he could watch and plan for its wise use.'' See Parker, 168. Here is an example of Peabody's legacy being passed on to (and through) Carnegie.
6 This description originates with Robert S. Morrison, "Foundations and Universities," Daedalus (Fall, 1964): 1111; see also Warren Weaver, U.S. Philanthropic Foundations, New York: Harper & Row, 1967, 24.
7 Quoted in Henry Curwen, Plodding On; or, the Jog-Trot to Fame and Fortune. London: Simpkin, Marshall and Co., 1879, 9.
8 Curwen, 21.
9 Severn Teackle Wallis, Discourse on the Life and Character of George Peabody. Baltimore: Peabody Institute, 1870, 41
The founding of the Peabody Education Fund was this early American philanthropist's most personally rewarding benefaction. Deeply concerned with the plight of the American South following the Civil War, and understanding that strengthening the system of education would help heal the Union, Peabody decided to establish a permanent fund -- an endowed foundation -- to accomplish that goal.
One of the Fund's original trustees, Robert C. Winthrop of Massachusetts, has recorded the moment on February 7, 1867, when Peabody read his instructions to his trustees. Peabody was "seated in the hall, under the portrait of Benjamin Franklin," as he read to Winthrop in private "that long schedule of appropriations for Education, Science, and Charity which soon afterwards delighted and thrilled the whole community." Completing that section, Peabody announced:
"And now I come to the last," said he, as he drew forth yet another roll with a trembling hand. "You may be surprised when you learn precisely what it is; but it is the one nearest my heart, and the one for which I shall do the most, now and hereafter," and he then proceeded to read the rude sketch of the endowment for Southern Education. 10
Peabody then continued to read:
With my advancing years my attachment to my native land has become more devoted. My faith in its glorious future grows brighter and stronger. Looking beyond my stay on earth I see our country emerging from the clouds still around her, taking high rank among nations, becoming richer and more powerful than ever. To make her prosperity more than superficial her moral and intellectual development should keep pace with her material growth. I give you, my friends, one million dollars to promote and encourage the intellectual, moral, industrial education of the destitute children of the Southern states. 11
10 J.L.M. Curry, A Brief Sketch of George Peabody, and A History of The Peabody Education Fund Through Thirty Years. Cambridge: Cambridge University Press, 1898, 19.
11 Phebe A. Hanaford, The Life of George Peabody, Boston: B.B. Russell, 1870, 157.
As Warren Weaver has observed, Peabody "was not especially interested in the word 'forever,' nor was he concerned with a 'dead hand.'" 12 Although Peabody did not establish his Education Fund in perpetuity, neither did he state that he wished it terminated at any specific time; he gave that option to the trustees:
I furthermore give to you the power, in case two-thirds the Trustees shall at any time, after the lapse of thirty years, deem it expedient, to close this Trust, and, of the funds which at that time shall be in the hands of yourselves and your successors, to distribute not less than two-thirds among such educational or literary institutions, or for such educational purposes, as they may determine, in the States for whose benefit the income is now appointed to be used. 13
At his death in 1869, Peabody's philanthropic gifts constituted a legacy that was extolled on both sides of the Atlantic. Great Britain's Prime Minister Gladstone eulogized him as "a master of his wealth instead of being its slave." Victor Hugo called him a "great citizen of the world, … this great brother of mankind … who felt the cold, the hunger, the thirst of the poor." 14 Queen Victoria expressed "personal thanks for all he has done for the people." 15 President Calvin Coolidge called him "the father of modern educational philanthropy." 16 And a poetic tribute in the New York Independent began,
Nations have vied to do him honour -- him
Whose royal heart went out to all his kind;
Whose hand e'er proved the princely almoner
To do its generous bidding. 17
12 Weaver, U.S. Philanthropic Foundations, 24.Quoted in Curry, 21-22.
13 Curwen, 32-33.
14 Philip Whitwell Wilson, George Peabody, Esq., An Interpretation. Nashville: George Peabody College for Teachers, 1926, 87
15 "From the President," in Wilson, 3.
16 "Tribute to George Peabody," quoted in Robert Cochrane, "George Peabody," in Four Great Philanthropists, London:
17 W. & R. Chambers, Ltd., 1896, 129.
The example set by Peabody contributed greatly to his legacy and inspired others to follow suit. A Connecticut manufacturer, John F. Slater, gave in 1882 the sum of $1 million to create a fund exclusively for "the uplifting of the lately emancipated population of the Southern States." 18 The John F. Slater Fund's work in education for rural Southern blacks so closely paralleled and complemented that of the Peabody Fund, that at its meeting in 1914, the Peabody board decided to merge with the Slater Fund. 19 In 1937, these funds combined with others to form the Southern Education Fund, which now functions as a foundation in Atlanta operating programs for African-Americans. In spite of the termination of the Peabody Fund, the philanthropic legacy of George Peabody continues to this day, in the ideas and ethical principles that he lived by, in the schools, libraries, college, museums and institutes that he built, and in the example that he set in philanthropic giving.
Trusting the Trustees: Andrew Carnegie.
Andrew Carnegie (1835-1919), that great historical icon of American philanthropy, strongly believed that a gift given in perpetuity could continue to be effective over time. Carnegie's story does not need retelling here. His classic essay, "The Gospel of Wealth," describes his philosophy of stewardship, his belief that wealth had been entrusted to him to benefit society, and his admonition that one should give during one's lifetime: "he who dies rich dies disgraced." 20
After making his fortune in coal, steel, and oil, Carnegie dedicated the last twenty years of his life to his philanthropy, and kept his promise to dispose of his fortune (which in 1911 totaled nearly $500 million) during his lifetime. His gifts and benefactions created a legacy that has assumed legendary status. They include most notably 2,509 libraries in the U.S. and abroad, museums, a college, a research institute, a hero's fund, a teacher's pension fund (to become the Carnegie Foundation for the Advancement of Teaching, which in turn gave birth to TIAA/CREF), 21 and an endowment for international peace. And in 1911, honoring his pledge to dispose of all his surplus wealth during his lifetime, he gave $125 million to endow the Carnegie Corporation of New York, a foundation for "promoting the increase and diffusion of knowledge and understanding amongst the people."
18 "John F. Slater Fund Letter of Gift," in F. Emerson Andrews, comp., Legal Instruments of Foundations, New York: Russell Sage Foundation, 1958, 259.
19 Peabody Education Fund, Proceedings of the Trustees at Their Sixtieth Meeting, New York, 20 May 1914, 26.
20 See Andrew Carnegie, "The Gospel of Wealth," first published under the title "Wealth", North American Review 148 (June 1889), 653-664, and 149 (December 1889), 682-698. The essay has been reprinted in Dwight Burlingame, ed., The Responsibilities of Wealth, Bloomington and Indianapolis: Indiana University Press, 1992, 1-31.
21 In 1905, Carnegie established the Carnegie Teachers' Pension Fund, incorporated in the following year as the Carnegie Foundation for the Advancement of Teaching. The trustees immediately adopted standards for admission and graduation for higher education institutions for the first time on a national basis. Wall writes, " with his pension plan, [Carnegie] had done more in a year to advance the standards of higher education within the United States than probably any carefully conceived program could ever have done"
In establishing the foundation, Carnegie set a pattern for perpetual endowments that has become a standard in the U.S. and abroad. His instructions to his trustees serve as a model of trust: trust in the integrity and good common sense of those who would follow him in guiding the foundation's affairs; trust in the perspicacity of their vision to meet the challenges of the future; and trust in the continuing viability of a foundation endowed in perpetuity.
Carnegie understood that the world changes over time, yet he did not hesitate to arrogate to his appointed trustees broad powers to change direction in order to meet the challenges of social change. In his instructions establishing the foundation, he wrote:
My desire is that the work which I have been carrying on, or similar beneficial work, shall continue during this and future generations. Conditions upon the earth inevitably change; hence no wise man will bind Trustees forever to certain paths, causes or institutions; I disclaim any intention of doing so. On the contrary, I give my Trustees full authority to change policy or causes hitherto aided, from time to time, when this, in their opinion, has become necessary or desirable. They shall best conform to my wishes by using their own judgment…. My chief happiness as I write these lines lies in the thot [sic] 22 that, even after I pass away, the welth [sic] that came to me to administer as a sacred trust for the good of my fellow men is to continue to benefit humanity for generations untold, under your devoted and sympathetic guidance and that of your successors, who cannot fail to be able and good men. 23
"Don't care a fig for future glory," Carnegie wrote to a friend. 24 Yet his legacy -- of institutions, organizations, and a philanthropic philosophy -- has become a legacy for the ages. Although John D. Rockefeller, Sr., later was to warn that "perpetuity is a long, long time," an essential part of Andrew Carnegie's legacy is his belief in the durability of an endowment dedicated to the public good; as he wrote to his trustees:
As in all human institutions, there will be fruitful seasons and slack seasons. But as long as it exists there will come, from time to time, men into its control and management who will have vision and energy and wisdom, and the perpetual foundation will have a new birth of usefulness and service. 25
22 (my emphasis). Joseph Frazier Wall, Andrew Carnegie. Pittsburgh: University of Pittsburgh Press, 1989, 874-875. Thot and welth are examples of Carnegie's interest in reforming the spelling of the English language; he set up the Simplified Spelling Board in 1906, which met with little success.
23 Carnegie Corporation Report, XX.
24 AC to Andrew White, 26 April 1901. Quoted in Wall, Andrew Carnegie, 859.
25 Carnegie Corporation Report, XX
No End to the Legacy: The Rosenwald Fund.
Famous as one of the foremost opponents of establishing endowments in perpetuity, Julius Rosenwald (1862-1932) nonetheless remains one of the greatest of American philanthropists. If one is not to perpetuate an endowment given to charitable purposes, how is one to leave a philanthropic legacy?
Rosenwald strongly believed that a foundation's endowment should not exist in perpetuity. Believing that "more good can be accomplished by expending funds as trustees find opportunities for constructive work than by storing up large sums of money for long periods of time," Rosenwald said that his restructured family foundation then could "avoid those tendencies toward bureaucracy and a formal or perfunctory attitude toward the work which almost inevitably develop in organizations which prolong their existence indefinitely." Future generations, he argued, will undoubtedly "provide for their own needs as they arise."
In accepting the shares of stock now offered, I ask that the trustees do so with the understanding that the entire fund in the hands of the Board, both income and principal, be expended within twenty-five years of the time of my death. 26
26 "Julius Rosenwald to the Board of Trustees (accepted by the board at its meeting, Chicago, April 29, 1928)," in Edwin R. Embree and Julia Waxman, Investment in People: The Story of the Julius Rosenwald Fund. New York: Harper Brothers, 1949, 30 -31. See also Julius Rosenwald, "Principles of Public Giving," The Atlantic Monthly (May 1929), 606.
Rosenwald's explicit view is that since it is impossible to predict the needs of society in the future, the donor should take precaution against the "dead hand," 27 which would provide unsteady guidance in the uncharted waters of an unforeseeable future. Unstated, yet implicit in his philosophy, is that inevitably over time, the donor's original intention will be obscured, ignored, or changed, and hence not honored. Limiting the life of the foundation, therefore, is the only way to safeguard the purity of the original intent.
Rosenwald's wealth derived from his successful 1895 acquisition and subsequent management of the mail-order catalog company, Sears, Roebuck. By 1910, his wealth exceeded $200 million. From his youth, he had been dedicated to philanthropic giving to charitable causes and took a deep personal interest in all of his gifts. Over the course of his life, Rosenwald's philanthropy had major impact on European immigrants to Chicago and elsewhere, international Jewish causes, and education and race relations in the United States. From 1910 on, he became, along with Andrew Carnegie, John D. Rockefeller, George Peabody, and Caroline and Olivia Phelps Stokes, one of the major funders for black education in the South, and had a special interest in the college founded by Booker T. Washington, Tuskegee Institute.
When he first established the Julius Rosenwald Fund in 1917, Rosenwald had appointed family members as the foundation's first board of trustees. Ten years later, responding to the increased demands of day-to-day activity, he created a new board consisting of outside members with broad professional experience and appointed Edwin Embree, former vice president of the Rockefeller Foundation, as the first executive director. Subsequently, the Rosenwald Fund became one of the major forces in both education and medical care for African-Americans in the South and the North.
Rosenwald had expressed his intent clearly, and the Rosenwald Fund did in fact spend out its assets and close its doors in 1948, nine years prior to his stated deadline. The direct legacy of the foundation's work includes the construction of 5,357 public schools (estimated to serve some 600,000 children), workshops, and teacher's homes in fifteen Southern states. 28
27 For historical insights on the "dead hand," see the article by M. Turgot, "Fondations," in the Encyclopedie, published by the philosophes in France in 18XX; Sir Arthur Hobhouse, The Dead Hand, XXX; Courtney Kenny, "The True Principles of Legislation with Regard to Property Given for Charitable or Other Public Uses," XXX, 1880; and F.H. Goff, The Dead Hand: An Address Delivered at Hotel Astor, May 24, 1921 Before the New York Association of Trust Companies. Cleveland: Cleveland Trust Companies, 1921. A wide-ranging, comprehensive treatment is given in Evelyn Brody, "Charitable Endowments and the Democratization of Dynasty ," 39 Arizona Law Review (1997), 873.
28 The Stern Fund: The Story of a Progressive Family Foundation, New York: Institute for Media Analysis, 1992, 12.
To help build YMCAs and YWCAs for black men and women, and hospitals and health centers staffed with black doctors and nurses, Rosenwald employed a strategy of matching gifts (using in-kind contributions such as labor and materials as the match) -- probably the first American philanthropist to do so. The Rosenwald Fellows program assisted many African-Americans who rose to great prominence, such as Marion Anderson, Katherine Dunham, Jacob Lawrence, W.E.B. DuBois, and Langston Hughes. Rosenwald was a pioneer in international relief in Palestine and Russia, particularly in support of the relocation of Russian Jews escaping persecution following the Russian Revolution in 1917 and subsequent famine in 1921. His philanthropic (and personal) philosophy, solidly embedded in the Jewish tradition of giving, emphasized stewardship of his wealth, active participation of the recipients, self-help, and individual responsibility. "[I]t is unselfish effort," he said, "helpfulness to others that ennobles life, not because of what it does for others but more what it does for ourselves. In this spirit we should give … gladly, generously, eagerly, lovingly." 29
The termination of the Rosenwald Fund did not, however, bring the Rosenwald legacy to a close. Rosenwald's daughter, Edith Rosenwald Stern, followed the path that her father had set out on when in 1936 she contributed $1.6 million to establish the Stern Fund. Later, as it was disposing of its assets, the Rosenwald Fund gave more than $900,000 to the Stern Fund. 30 In the mid-1970s, taking into account a combination of financial and family factors (and with Rosenwald's opposition to perpetuities providing "the philosophical backdrop" 31), the trustees of the Stern Fund decided to terminate the foundation. After Edith's son, Philip M. Stern, died, a third-generation foundation, the Stern Family Fund, was created, this time with a set term of ten years to accomplish its work. With its mission statement affirming its commitment to "aiding citizens striving to guarantee the responsiveness of public and private institutions," the Stern Family Fund's goals include "projects that strive for a more equitable distribution of political and economic power." 32 Thus, more than half a century after the original foundation was terminated, the Rosenwald legacy continues to play an important role in American society through successive generations of unique family foundations.
29 Quoted in Waldemar A. Nielsen, Inside American Philanthropy, Norman and London: University of Oklahoma Press, 1996, 42.
30 The Stern Fund 11.
31 The Stern Fund 7.
32 See The Stern Family Fund, www.essential.org/stern.
Interpreting and Sustaining the Legacy: Three Contemporary Examples.
Three foundations -- the Phelps-Stokes Fund (1911), the Edward W. Hazen Foundation (1925), and the Jessie Smith Noyes Foundation (1947), provide further instructive examples of honoring their founders' intentions by creating a distinguished and venerable legacy.
Legacy Across Continents: the Phelps-Stokes Fund.
The bequest of one million dollars to establish the Phelps-Stokes Fund was the last of the numerous benefactions of Caroline Phelps Stokes, who died in 1909. Established in April 1911, the Phelps-Stokes Fund, one of the earliest family foundations in the United States, worked in collaboration with the Peabody, Slater, Carnegie, and Rosenwald Funds to ameliorate race relations and improve educational opportunities for Africans, African-Americans, and American Indians.
With her older sister Olivia Egleston Phelps Stokes, Caroline's philanthropic interests during her lifetime included advancing the Christian religion (most notably by giving funds for building chapels at such diverse locations as Columbia University, Berea College, and Tuskegee Institute), advancing the cause of women and of American minorities (particularly African-Americans and American Indians), strengthening education, and improving housing for the poor. 33
In a composition entitled "The Poor," written when she was eleven years old, Caroline said: "The poor people suffer much…. I think the tenement houses are dreadful places, almost as bad as prisons." 34 She and Olivia heard their maternal grandfather, Anson Greene Phelps, speak of his work with the American Colonization Society to found the Republic of Liberia in West Africa and had met Africans in their home in New York City. As adults, the Phelps Stokes sisters, who never married, traveled widely in the United States and abroad; in 1896-1897, they took a trip around the world, which included extensive travels in India among the poor. The worldly outlook and compassionate understanding that resulted from their travel strongly influenced their "practical philanthropy."
33 For the Fund's work on low-income housing, see Deborah Gardner, "Practical Philanthropy: The Phelps-Stokes Fund and Housing." Prospects: An Annual of American Cultural Studies 15 (1990): 359-411.
34 Olivia Phelps Stokes, The Story of Caroline Phelps Stokes. Unpublished mss., 1921, 25.
In her will, Caroline specified that the endowment for the Phelps-Stokes Fund be used "for the creation and improvement of … housing [for the poor] in New York City" and "for educational purposes in the education of Negroes both in Africa and the United States, North American Indians and needy and deserving white students." 35 When Olivia died eighteen years later, she left additional funds to the foundation for the purpose of "found[ing] a school in Liberia similar to the Tuskegee Institute." As a result of this bequest, in 1929 the Booker Washington Agricultural and Industrial Institute was opened in Kakata, Liberia, a school that continues operation to this day.
The Phelps-Stokes Fund's legacy is perhaps less understood in mainstream America than across the African continent, American Indian Country, and the historically black colleges. The foundation's first work, the Phelps-Stokes Report on Education in the Southern States (1913), used the new statistical methodologies of the social sciences to document race-based inequities in the Southern states' support for education. Its findings compelling and indisputable, the report was cited for years afterwards in appropriations debates in state legislatures. The Fund employed a similar strategy in Africa: with a team led by Thomas Jesse Jones, Anson Phelps Stokes, and the great Ghanaian scholar, Dr. James Emman Kwegyir Aggrey, the Fund conducted and published the first comprehensive surveys of Education in West Africa (1921) and Education in East Africa (1923).
In her statement of intention for the new foundation, Caroline Phelps Stokes had included the cause of "North American Indians." The foundation's first efforts in this regard once again took the form of studies directed at policy reform. The first of these, The Problem of Indian Administration (popularly known as the "Meriam Report," after its author), was completed in 1928. The report's thesis was highly progressive and extraordinarily farseeing for its time, proving to be, indeed, prophetic: that the conditions of American Indians would be best improved by allowing and empowering Native Americans to work within their own cultures to solve their own problems. The second report, The Navajo Indian Problem, advocated a policy position sympathetic to Indian rights and to the sovereignty of American Indian tribes, and again, proved to be an effective catalyst for policy reform.
35 [Ronald Austin Wells], Report of the Phelps-Stokes Fund, 1987-89. New York: 1989. In the early twentieth century, the term "African-American" had not yet entered the English language; Caroline Phelps Stokes' use of the term Negro, while anachronistic today, was more polite than the term "black," and provides a good example of how change in language can begin to obscure donor intent. See Ronald Austin Wells, "Olivia Egleston Phelps Stokes and Caroline Phelps Stokes," American National Biography. New York: Oxford University Press, 1999, vol. X, x.
With conscious strategic intention, the Phelps-Stokes Fund has over the years played an important role in helping strengthen the capacity of new or fledgling organizations whose work advances the Fund's mission. The inaugural meeting in 1934 in Cape Town, South Africa, of the South Africa Institute of Race Relations, for example, is chronicled in the Institute's first issue of the Bulletin of Race Relations. 36 At that meeting, Frederick Keppel, president of the Carnegie Corporation, and Anson Phelps Stokes, president of the Phelps-Stokes Fund, presented matching grants of $5,000 to establish the Institute. While president of the Phelps-Stokes Fund, Frederick D. Patterson was instrumental in establishing the United Negro College Fund (UNCF) in 1950. In 1984, the Fund established the Archbishop Desmond Tutu Southern Africa Refugee Scholarship Fund, in honor of Archbishop Tutu, an honorary trustee, after he received the Nobel Peace Prize. On the premise that there was probably a high correlation between the refugee status of black South Africans who had been forced to leave the country and their leadership abilities, this initiative sponsored U.S.-based education for over 100 individuals; it is a significant part of the Fund's legacy that many of the alumni of this program now hold significant positions in the post-apartheid South African government. In its work with Native Americans over the years, the Phelps-Stokes Fund provided technical assistance in program development to numerous Native organizations. In 1987, when a group representing the consortium of tribally controlled American Indian colleges approached the Fund for assistance, the Fund helped launch the American Indian College Fund, first adopting it as a foundation program, and then providing the means for independent governance and program development. 37 Today the American Indian College Fund is a major national nonprofit institution offering private support to the 31 American Indian tribal colleges.
36 Bulletin of Race Relations, Cape Town, S.A.: South African Institute of Race Relations, 1934, 1.
37 See Ronald Austin Wells, "'The future is in our minds': the American Indian College Fund." New Directions in Fundraising, no.1 (Fall 1993), x.
Only by understanding the Phelps-Stokes Fund's history can the legacy of two relatively unsung women, Caroline and Olivia Phelps-Stokes (who are among America's earliest philanthropists), and the foundation they established, be fully comprehended. Through the quiet but indefatigable work of this small foundation, that legacy has touched and changed the lives of hundreds of Africans, African-Americans, and American Indians, and has left its mark on the face of the world.
For the Perpetual Benefit of Young People: The Edward W. Hazen Foundation.
When he established his foundation in 1925, Edward W. Hazen (1860-1929) ensured that its purpose was defined in the Articles of Incorporation as follows:
To receive and maintain a fund or funds to be held either absolutely, upon condition, or in trust, and to apply the income and principal thereof to promote the public welfare either by supporting existing agencies or through independent activities of this corporation, such agencies or activities to be exclusively religious, charitable, scientific, literary, or educational in character. 38
38 "Articles of Association", The Edward W. Hazen Foundation,1925-1950. New Haven, Conn.: 1950, 46.
The Hazen Foundation's first board, incorporated in Haddam, Connecticut, comprised Hazen, his wife Helen, his two sisters Mary and Lucy, and Helen's brother, Charles A. Russell. While the statement of purpose was clearly intended to provide wide latitude in order "to promote the public welfare," Edward Hazen's personal interests and values were unambiguous. He was dedicated to helping young people develop their character, talents and skills in order to be able to live productive and rewarding lives and contribute to the social good.
Hazen made his fortune working with the Curtis Publishing Company in New York, where, following several preliminary assignments, he was named Advertising Director, a position he held from 1908 to 1915. His reputation for honesty, fairness, clear analytic thinking, and objective problem-solving earned him a tribute from his staff, who preserved these principles, known as "The Hazenian Oath," in the form of an engrossed scroll:
I will never disgrace the trade I follow, nor shame the men by whose side I work. I will strive to protect those interests which have been to some degree entrusted to my keeping.
I will recognize that there are many times those who know better than I. I will observe the laws of common sense, and do my best to apply them…. I will look to the ideal of a tomorrow better than today. I will try so to do my work that when I am through, my calling shall have something more of strength and at least nothing less of honor for my having pursued it. This I take to be no more than my plain duty as a man. 39
When in 1915 Edward Hazen retired from the Curtis Publishing Company, he had accumulated significant stock holdings which greatly increased in value over the ensuing years. During this time, on a hunting and fishing trip to the Canadian Laurentian Mountains, Hazen met a wealthy and influential industrialist, Horace A. Moses of Springfield, Massachusetts. Moses was the leading force behind the Eastern States Agricultural and Industrial League and the Eastern States Exposition, the premier agricultural and industrial fair held in the New England states. As the two became close friends, Hazen admired Moses' civic leadership, public service, and particularly the foundation that Moses had established to perpetuate and provide focus for his philanthropic interests. It was from Horace Moses that Edward Hazen got the idea to establish the Hazen Foundation. 40
39 Charles A. Russell, Edward Warriner Hazen: A Biographical Sketch. New Haven, Conn.: 19XX, 29.
40 See Harry A. Lane, Achievement is My Goal: The Story of a Great Industrialist, Horace A. Moses. Springfield, Mass.: The Horace A. Moses Foundation, 1956.
From its beginning, the Hazen Foundation has pursued its founder's interest in education, religious and community values, and the development of youth. For the first decade and a half of its existence, the foundation's grants, emphasizing the religious and character development of non-college youth, were channeled particularly in support of the YMCA and Junior Achievement, in which Edward Hazen had a strong interest. A comment in the Foundation's Report for 1939 outlines the philosophy undergirding this approach:
The Foundation's apparent reliance on well-established organizations should not be misinterpreted. It is not because of an uncritical or conventional approach to the field. On the contrary, it has supported certain organizations because after intimate contact, it has discovered within them men and women who are facing the emerging needs of youth in a changing society realistically and creatively…. The Foundation … has sought, through its grants and the influence of its officers, to encourage a dynamic approach to the everchanging problems of youth in a dynamic world. 41
Awareness of the need for "a dynamic approach" to meet the challenges of "a dynamic world" has consistently informed the Hazen Foundation's mode of operating. Commenting in 1950 on the challenges confronting the foundation's trustees, Paul Braisted, the Fund's third president, wrote:
It is apparent that the progressive achievement of … Mr. Hazen's special concerns would require continuing exercise of imagination and initiative. From the beginning his intention had been made clear that the trustees should have complete freedom of action as regards both the ends within the broad provisions of the Articles of Association, and the means appropriate to their achievement. It is their right and responsibility to reconsider, to modify, and adapt them in the light of changing conditions and needs. 42
With its grantmaking mission focused on the "recovery of a concern for religion in higher education," 43 the Foundation had established a three-pronged program that includes fellowships to support the professional development of leaders, summer conferences, and a series of publications dealing with religion and values in education. 44 Collaborations with organizations such as the American Council on Education and the National Council on Religion in Higher Education brought the Hazen Foundation on the national scene, broadening and strengthening its impact. Wishing to be "more accessible to the outside world," 45 the board had embarked upon a program of international fellowships following World War II.
41 Activities: Report for 1939, The Edward W. Hazen Foundation. New Haven, Conn: 1940, xx.
42 [Paul Braisted,] The Edward W. Hazen Foundation, 1925-1950, 9.
43 [Braisted], The Edward W. Hazen Foundation, 1925-1950, 14.
44 The "Hazen Books," authored by such authorities as Reinhold Neibuhr, Ordway Tead, Kenneth Boulding, and others, became widely known for their high caliber and usefulness.
45 "Who We Are," www.hazenfoundation.org/history
In 1970, William Bradley succeeded Braisted as president. To increase the Foundation's reach and enhance its influence, Bradley expanded the board and brought on such people as Paul Ylvisaker of Harvard's School of Education; Henry Porter, Jr., of Brown-Williamson Corporation; John Nason, former president of Haverford and Carleton Colleges; and Jean Fairfax, one of the first African-American women to serve on a national foundation board. Bradley says that during his thirteen-year tenure the board collectively exhibited "a strong historical memory," along with a clear sense of responsibility and independence. It was Fairfax who asked at a board meeting, "What is it that is not being done that needs to be done in Africa and Asia?" 46 In addition to increased international involvement, the Foundation funded several social change projects, some of which linked community organizing to school reform.
"The Hazen Foundation was fairly early in exchange relationships with Africa," notes Richard Magat, who served as president from 1983 to 1987. "And it had a reputation for venturesome grantmaking. That gave me an enormous advantage when I took on the job." 47 That note is echoed by Barbara Taveras, who assumed Hazen's presidency in 1992. "It remains clear that Mr. Hazen's intention was to grow the leadership of the future," she observes. "The Foundation has always been very progressive, has always employed very targeted, strategic funding, directed at specific groups of young people. Today, we direct our programs towards lower income, minority youth, so as to help them get a quality education, and contribute to the development of a new generation of grassroots leaders committed to improving their communities now and in the future." 48
Edward Hazen's generosity, and his faith in the Foundation's trustees, enabled a perpetual legacy that continues to help young people develop to their full capacities within a constantly changing society. With intelligent and sensitive interpretation of that legacy, the trustees of the Hazen Foundation draw from both the past and present to shape the foundation's future.
46 William Bradley, personal interview, August 16, 2000.
47 Richard Magat, personal interview, August 14, 2000.
48 Barbara Taveras, personal interview, August 16, 2000
Harnessing Social Change to Create the Legacy: The Jessie Smith Noyes Foundation.
Another example of a family foundation that has transformed the inevitability of social change into a force for social good is the Jessie Smith Noyes Foundation. Over the fifty years of its existence, the Noyes Foundation has changed its strategic directions several times, and remains in the forefront of philanthropic organizations deploying its of social conscience in all areas of its work.
Jessie Smith Noyes (1885-1947) was a community leader in Brooklyn, New York, who served for many years as vice president of the Brooklyn YWCA, where she exemplified and actively worked on behalf of religious and racial tolerance. A friend once described her as "an aristocrat and a democrat at one and the same time"; she was a person who "never lost touch with the human equation." 49 Upon her death in 1947, Jessie's husband, Charles F. Noyes, established the Jessie Smith Noyes Foundation as a memorial to his wife. Having made his fortune in real estate, primarily skyscraper office buildings in New York City, Noyes earned a reputation as the "Dean of Real Estate," when in 1951 he brokered the sale of the Empire State Building. Upon his death at the age of 91, he left further funds to the Foundation, bringing its assets to approximately thirty million dollars. In the beginning, the foundation's board, comprising Noyes, his three daughters and a friend of the family, directed its funding towards college scholarship aid.
Charles Noyes left to the foundation no specific statement of donor intent. Indeed, his daughter, Edith Muma, a member of the original board who remains active to this day, "urged him not to be specific." 50 The Foundation's first report, published in 1957, records that:
Mr. Noyes believed deeply in the importance of encouraging all people to develop their potential to the fullest not only for their own satisfaction but for the contribution they might then make to the general welfare. The fund has chosen to perpetuate [his wife's] memory by giving substance to her faith in people chiefly through the support of education. 51
49 "A Brief History", Annual Report of the Jessie Smith Noyes Foundation, New York: 1998, 5.
50 Edith N. Muma, personal interview, July 11, 2000.
51 Report of the Jessie Smith Noyes Foundation, 1949-1957.
As the board set out in 1947, its work was divided along gender lines, with the men managing the investments and finances and the women managing the grants program. While such an arrangement would be considered highly unusual today, Ann Wiener, Charles Noyes' granddaughter and a member of the current board, believes that the fact that the grants philosophy was initially shaped by women has significantly enriched the Noyes legacy: "Women tend to honor and value relationships. They stay with things over the long term. They recognize the importance of individuals and are open to fledgling organizations. They know the value of small amounts of money and of networking and personal connections with people." 52
In 1998, the Noyes Foundation published a Statement of Values, which inferentially draws from its historical legacy a statement of donor intent:
Jessie Smith Noyes believed that money should be held as a "sacred trust'' and that those entrusted with it are stewards…. She also believed passionately in the power of individuals to bring about the changes needed to create a better world, and that all individuals, whatever their backgrounds, should have the opportunity to make their unique contributions to the world. This belief in the importance of individuals continues to inspire the Foundation to search for the visionaries, the dreamers, the thinkers - those people ahead of their times. 53
Donna Chavis, a non-family member and current chair of the Noyes board, strongly endorses this principle. "In many cases, our grantees are the visionaries, working at the cutting edge of social change," she explains. "They're the ones that are asking the questions." Chavis, who is the first Native American to chair the board of a national foundation, also points out that the Noyes board, which has been a leader in diversifying its membership, has been "welcoming and receptive." In board meetings, she says, "I can function in an indigenous way and bring my cultural values to the table. The critical thinking and range of our board discussions has been a great gift to me." 54
In a retrospective essay looking back over the past fifty-year history of the Noyes Foundation, Edith Noyes Muma, who has been a member of the board since its founding, has provided a lucid picture of how a founding donor's values have been translated into a powerful philanthropic and social legacy. 55 Mrs. Muma notes that over its half-century of existence, the Foundation's operations may be divided into three phases. In the first phase, under the guidance of its founder for its first twenty-two years, the foundation gave college scholarship grants to needy students, with the scholarship committee basing its decisions for both minority and majority students on financial need, academic merit, and the student's goals for a career that would "help society." Following the death of Charles Noyes in 1969, the Foundation's board reorganized its committee structure to deal with both financial and programmatic matters; concurrently the scholarship committee strengthened evaluation of its scholarship programs. Increasing favor for supporting individuals who showed high potential to make a positive contribution to society led the committee to add specific fields of graduate study to its selection criteria. Consequently, the committee chose to focus on scholarships for students who would undertake careers in primary medical care in inner cities and impoverished rural areas, primary education, and improving the natural environment.
52 Ann Wiener, personal interview, July 2, 2000.
53 Annual Report of the Jessie Smith Noyes Foundation, New York, 1998, 6.
54 Donna Chavis, personal interview, August 1, 2000.
55 Edith N. Muma, "A Purely Personal Overview of the Last Fifty Years," Annual Report of the Jessie Smith Noyes Foundation, New York, 6.
As time passed, the board come to see that among the many problems in the world, some were critically urgent, and, if not confronted immediately, would result in irreversible damage to the planet. In this third phase of the foundation's evolution, dating from 1984, the trustees decided to expand the board and add staff to run the operations. By adding nine non-family members, people of wide experience, talent and background, to the six incumbent family members, the board diversified its reach, resources, and outlook. After long and serious reconsideration of the Foundation's values, mission, and goals, the trustees' judgment, Mrs. Muma writes, was that
the ability of the earth to continue to sustain life was in grave danger. It was threatened by the double pincers of increasing population and increasing degradation of its most vital interconnected ecosystems. If the earth, its air and its waters, both fresh and salt, were damaged beyond repair, life of any kind could no longer continue. Thus, our priorities became focused on the sustainable production of food and fiber, the clean-up and protection of ground water and the salt water of shallow bays and marshes -- nurseries for 90% of all marine life -- support of some alternative technologies which gave hope of reducing greenhouse gases and preserving the ozone layer, and finally, support of various educational and distribution systems which allowed women to control their own fertility. Although no longer specifically earmarked by race, such grants would clearly benefit people everywhere. 56
This third phase of the Noyes Foundation's work has carried through to the present day. Believing that the foundation's endowment "can and should be employed in service of our goals as an institution," the trustees have set out on a process of integrating programmatic concerns with the environment and community into the foundation's investment policy. Not only does the Foundation require its asset managers to employ a social responsibility screen for its investments, but it has begun to use its power as a stockholder to persuade corporations to adopt practices more in keeping with the foundation's environmental and community values. 57
Neither Charles Noyes, the founder, nor his wife, Jessie Smith Noyes, may have envisioned a world beset by environmental problems that require definition and amelioration on a planetary scale. However, in the opinion of their daughter Edith Muma and granddaughter Ann Wiener, they would enthusiastically approve the Foundation's perspective on the developing global community of the twenty-first century. Charles was "a doer and a great egalitarian." 58 Jessie Smith Noyes was "always ahead of her time," 59 and her strong sense of social justice is perhaps the foundation's own greatest legacy.
In the latest revision of the foundation's Statement of Values, the trustees reaffirm their commitment to perpetuating and continually renewing the legacy with which they have been entrusted by the founding donor:
As opportunity and need suggest new directions and new areas of emphasis, [the Foundation] will continue to revise and modify our program to assure relevance to contemporary society and a sustainable future. Through the many changes in the Foundations' program, we will continue to maintain the characteristics basic to our objectives: a belief in the central importance of individuals to any undertaking; a willingness to offer a chance to the dreamers and visionaries; and a continuing effort to identify the areas of world need on which our grants can most productively focus. 60
56 Muma, "A Purely Personal Overview", 6-8.
57 See Stephen Viederman, "From Prudent Man to Prudent Person: Sustainability and Institutional Investment For the 21st Century," in Brian R. Bruce, ed. The Investment Research Guide to Socially Responsible Investing. Plano, Texas: Investment Research Forums, 1998; and Stephen Viederman and Miriam A. Ballert, "Thinking About Mission-Related Investing," National Center Journal, vol. 2, Washington, D.C.: National Center for Family Philanthropy, 1999.
58 Wiener, personal interview, July 2, 2000.
59 Muma, personal interview, July 11, 2000.
60 Annual Report of The Jessie Smith Noyes Foundation, New York, 1998, 4.
The Donor's Legacy: A Shared Responsibility.
The legacy, then -- the donor's legacy and the foundation's legacy -- is an organic, living entity. Peabody, Carnegie, the Phelps Stokes sisters, Hazen, Noyes -- all understood this. The legacy encompasses not only the donor's original statement of intent, but all of the subsequent work and accomplishments of the foundation and its grantees. Like all living things, the legacy changes constantly, thriving under favorable conditions and waning under those that are less so. And as with all living things, the legacy can be nurtured or starved. As time passes, the legacy may become anachronistic, something that has petrified into a fossil fit only for a museum; or it may, treated with sympathy, compassion and intelligence, evolve into a perpetual monument to the human spirit. It is the clarity of the donor's instructions, infused with a trust in the wisdom and good will of succeeding generations, that will decide what the donor's legacy will become.
Indeed, is it not the ethical responsibility of all who are involved in the foundation's work -- board members, staff, and grantees -- to vigorously nurture the foundation's legacy through their work over the decades? It is not relevant whether the foundation will exist for a pre-determined amount of time or exist in perpetuity -- the point is that an individual has chosen to contribute wealth to improve human society in some way, in terms of that donor's experiences, perceptions, and sense of life's meaning. All who follow in his or her footsteps and who can influence the uses of that wealth incur not only a fiduciary responsibility for prudent management of the corpus, but an ethical responsibility to honor, and contribute to, the donor's vision. To adapt George Peabody's motto, may we not say: the donor's legacy: a debt due from present to past and future generations.