Why Philanthropy Matters

Cover of “Why Philanthropy Matters”

Posted by Eileen Ellsworth

This is the third post reviewing the book “Why Philanthropy Matters:  How the Wealthy Give, and What It Means for Our Economic Well-Being” by Zoltan J. Acs (Princeton University Press 2013)

In “Why Philanthropy Matters”, Zolton Acs explains how American style capitalism has developed, evolved, and fueled philanthropy. He describes the history and evolution of American capitalism, from the masters of commerce in colonial America, to the industrial revolution of the late 19^th century, to the “managerial economy” of the early and mid-20^th century, to the “entrepreneurial economy” of today. In doing so, Acs answers the question “Why did the information revolution happen in the US?” The short answer is this:

Why Philanthropy Matters

Cover of “Why Philanthropy Matters”

Posted by Eileen Ellsworth

This is the second post reviewing the book “Why Philanthropy Matters:  How the Wealthy Give, and What It Means for Our Economic Well-Being” by Zoltan J. Acs (Princeton University Press 2013)

A core idea from “Why Philanthropy Matters” is that the classic arc of American capitalism starts with opportunity. Only then does it move to entrepreneurship and innovation, wealth creation, and ultimately philanthropy. This cycle of American-style capitalism has endured for centuries. Acs is fascinated with the question of why does capitalism flourish here? He believes it is because American policies, laws, and societal structures have not only made it possible but encouraged it.  Indeed, our institutions are fundamentally different from the rest of the world in this regard.

For example, an idle aristocracy never existed here as it did in Britain. In the 1700’s and 1800’s, the Puritans and Quakers innovated, worked hard, and accumulated wealth, a phenomenon which broke down the old world class structures. Wealth could now accrue to the “upwardly mobile” class through industry, not just inheritance. This “Bloodless Revolution” destroyed the existing monopoly on wealth and threw open the doors to opportunity for the many. And the emerging societal perceptions of wealth and opportunity shape our thinking to this day.

Why Philanthropy Matters

Cover of “Why Philanthropy Matters”

Posted by Eileen Ellsworth

This is the first post reviewing the book “Why Philanthropy Matters:  How the Wealthy Give, and What It Means for Our Economic Well-Being” by Zoltan J. Acs (Princeton University Press 2013)

Zolton J. Acs makes a persuasive and scholarly case that American philanthropy is essential to American-style capitalism because it continuously revitalizes our economy and invests in the middle class.

Acs has spent a considerable portion of his professional career studying entrepreneurship in the US and Europe and has the ammunition to back up this theory with good evidence.  He starts with a discussion of the Giving Pledge, reprinting word for word several pledge letters written by such philanthropists as David Rubenstein, Peter Peterson, Bill and Melinda Gates, Warren Buffett, George Kaiser, and David Rockefeller. One of the primary repeating themes you find in those letters is at the core of Acs’ book – the idea that philanthropy is intended by those who engage in it to create new opportunities for the next generation of entrepreneurs, and in doing so, becomes essential fuel for American capitalism.