Today’s interview is with William Thomson, Andrew Carnegie’s
great-grandson. In our conversation we discuss the just announced winners of this year’s
Andrew Carnegie Medal of Philanthropy, what William’s great-grandfather
would have thought of today’s “new philanthropists”, why philanthropists need to “court risk” the blurring of
the lines between for-profit activity and philanthropy, and an emerging
philanthropic trend in Europe.
This interview was booked and recorded before I decided to have guests
participate in a follow up online conversation with listeners. We’ll
get back to that format next time with Bill Schambra.
Expand this post using the link below to read the transcript.
Sean Stannard-Stockton: Hello, and welcome to the Tactical Philanthropy Podcast. I’m Sean Stannard-Stockton, author of the Tactical Philanthropy blog and principle and director of Tactical Philanthropy at Ensemble Capital.
My guest today is William Thomson. William is the great grandson of Andrew Carnegie and a member of the executive selection committee of the International Carnegie Medal for Philanthropy, which is often referred to as the Nobel Prize of philanthropy. Good Morning, William. Thanks so much for speaking with us today.
William Thomson: Good morning, Sean. I am pleased to be here.
Sean: Why don’t you begin by telling us about the history of the Carnegie Medal of Philanthropy? And we don’t have time to discuss each of the recipients in depth, but maybe you can tell us about them briefly.
William: The medal started in 2001 here in New York and it was the brainchild of Vartan Gregorian, president of the Carnegie Corporation of New York. He set out to do two main things: to spread the message of philanthropy by awarding this medal to great philanthropists who had done a lot to benefit their country and the people of their country — or even globally — and the second idea was to publish the name of Carnegie as a philanthropist, as a kind of international example of what great things can be done in this way.
This year we have four recipients. The Heinz family — whose sustained philanthropic efforts in the world of environment, education, economic opportunity and the arts — are very well known, I think, throughout the United States.
Then we have the Tata family from India, who are a big, well-established industrial family. and they have been funding for many years a number of pioneering institutions and social sciences, cancer research, tropical disease research. They give away every year between 8% and 14% of the net profits of the controlling company to a very wide range of causes.
Then we have Eli Broad, founder of two Fortune 500 companies. I think he was also well known. The Broad Arts Foundation activities covers over 25 major museums and institutions throughout the United States and also that includes, of course, New York City’s Museum of Modern Art.
And then finally, we have the Mellon family. They are a Pittsburgh-based family who have extended into Washington and New York and it started, I think, in the 1930s when Andrew Mellon donated his extensive art collection to begin the National Gallery of Art in Washington. They do a lot in many areas, life sciences but also particularly in land preservation.
Sean: So in the press release announcing this year’s awards, you commend the winners for “courting risk.” Why do you think taking a risk is an important part of philanthropy, and how can we encourage more philanthropists to take risks?
William: Well, I think there are two reasons for this, Sean. One is that very often the philanthropist has come from a business in which he succeeded precisely because he has taken risks. So he has a natural affinity to taking risks. The other is that I would think a lot of philanthropy doesn’t need to take risks. If you are going into the cutting edge of making changes in society, you are going to have to take risks.
Sean: You are the only member of the Carnegie family still involved in the foundations he created. What do you think your great grandfather would say about how philanthropy is practiced today? Would he feel like nothing has really changed? Or, if he saw differences from the philanthropy that he practiced, would he like what he saw or would he be disappointed?
William: That’s a very difficult one because I suppose in some areas he might feel disappointed, but in other areas he might be enormously encouraged. I like to think, first and foremost, that he would find the work of his institutions to be something that he was really proud of.
The fact that, by-and-large — there is, I think, one exception which is the Hero Fund in Germany which disappeared in the Nazi era — but by-and-large, his institutions have all flourished and are relevant today. So I think that would be very, very important to him.
In terms of what he would find different today, I think your own interest in the spread of philanthropy — that more people are interested in doing things in that world — of course would be different. It’s not just confined to the very rich, which is where he was aiming his interests at the time. Because he saw these vast fortunes being accumulated and then being passed down to families and not being used for the good of the future of the country.
Sean: When you talk to some of the so-called new philanthropists who talk about venture philanthropy or the new high-tech entrepreneurs who are engaging in philanthropy for the very first time in a broad way, sometimes the language used indicates that what they are doing is new. And if you talk to some of the older, more established foundations, they will say this is not really new, this is what we have done all along or what we set out to do.
Do you think that there is really something new going on in philanthropy today — not just more people — but that the practice is somehow new?
William: I think there are some changes. An awful lot of it, as you rightfully say, is actually the same in a new guise. You’ve still got to follow it through. You still got to find a way of funding it, how you work through it and develop it.
I suppose one of the differences that I think the new philanthropists are tending to bring, is that they are much more target-achievement based, if I could put it that way. In other words, they are saying, “This is what we want to do. How are we going to measure the results from this?” Then they tick off as the initiative progresses or the philanthropy progresses. They tick off the results to see that it is going on track. I think that is also bringing more of a business mind to the way they do things.
Otherwise, the fact that more people are interested in philanthropy and the fact that there is perhaps easier access of the Internet and the profusion of publications that we are also getting on philanthropy. There is more awareness of what philanthropists — or what philanthropy — rather can do.
Sean: Certainly. Certainly. One of the new trends is this blurring of the line between for-profit activities and philanthropic activities. So the Google Foundation for instance, is not actually a private foundation. It is a for-profit corporation that’s dedicated itself to philanthropic work.
There are a number of organizations that people call social enterprises that, many times, are structured as for-profits but have a mission of improving the world in some way.
I think if you look back at Andrew Carnegie, his philanthropic work and his for-profit work were separate, only in the sense that his for-profit activity was not intended to achieve philanthropic goals. Instead, the proceeds from the for profit work was put into the philanthropic goals.
There is a lot of debate around this. Is this a good thing or a bad thing? Should for-profit and philanthropic work come together or should they be kept separate?
William: Well, it is a matter of circumstance to my mind on this. You are perfectly right about saying Carnegie followed his business career, his industrial career, and then he went into philanthropy. He was actually pursuing philanthropy in a small way, but it was not connected with his business at all and it was a separate issue when he came to sell his business.
He had this huge fortune, of course. He wanted to make it work for the good of mankind. I think one of the differences that we have to be aware of today is that no company could reasonably go out in the market with a mission statement that said, “We are going to mine something out of the center of the earth, cause environmental havoc, but at the end of it we will take the profits and do something good.”
Companies — by their nature — have to look good in what they are doing, but companies also — to be profitable and to grow and to be successful — they need to reinvest in themselves, and I think it is quite difficult for a lot of companies to find spare money to put into philanthropy if they need that for their own capitalistic growth.
Sean: On the Tactical Philanthropy blog I talk about a second great wave of philanthropy that is currently underway in the United States. I understand that you see the rise of a new philanthropy in Europe as well. Can you tell us a little bit about European philanthropy and how it is different or the same as American philanthropy?
William: Well, I am not so familiar with the American side to say how it is necessarily different, but I think there are some interesting points from the philanthropy in Europe.
First of all, there are some breakthroughs throughout Europe and throughout the rest of the world, but the US is the lead in philanthropy. And the greatest example is certainly set in the U.S.A. Having said that, if you take, for instance, the people of Scotland, they are awfully generous in circumstances where there may be a world appeal.
For instance, the tsunami two years ago. When that came, the Scottish people dug deep in their pockets and sent money to the tsunami appeal. I am not talking about big philanthropists writing million dollar checks. I am talking about ordinary people in the street writing out or sending donations of maybe $20, $30, $60, $100 dollars, that sort of thing.
There was a tremendous amount; they were very, very high on it. So, we have that sort of charitable giving already in place, but it tends to focus on a current event and then be generous that way.
Where I think America is different, is that it is more strategic than we tend to be, except for the very big individual philanthropies. It is more strategic in where it places its giving.
Sean: Well, I have time for one more question here, and it is pretty open-ended, so you can take it in whatever direction you want. But I am wondering what you think the important challenges and opportunities facing philanthropy globally is today.
William: In that respect, I am not sure I see very much change from when Andrew Carnegie was looking at philanthropy. We have health, an enormously important matter still. We have education, which is still hugely important to the developing world. And we have perhaps most important of all — the one that was dearest to his heart towards the end of his life — was peace and conflict resolution.
Sean: All right, this has been the Tactical Philanthropy Podcast. You can visit us at tacticalphilanthropy.com. For more information about William Thomson and the Carnegie Foundation, visit carnegie.org. Thanks so much for listening.
Interesting reference to philanthropic risk in your podcast. I think that’s something worthy of more discussion. The question is what’s at risk, considering foundations are required to give away their money? Unlike risks a business faces, if the “investment” doesn’t pay off, the foundation’s viability isn’t threatened. I, agree, of course, there’s a risk to the foundation’s reputation or willingness to be daring next time around. But considering the organization itself isn’t at risk–that ought to make it easier to make bigger bets.