Frank G. Dickinson

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from the National
Bureau of Economic Research
Volume Title: The Changing Position of Philanthropy in the American
Economy
Volume Author/Editor: Frank G. Dickinson
Volume Publisher: UMI
Volume ISBN: 0-87014-209-7
Volume URL: http://www.nber.org/books/dick70-1
Publication Date: 1970
Chapter Title: Basic Concepts
Chapter Author: Frank G. Dickinson
Chapter URL: http://www.nber.org/chapters/c3327
Chapter pages in book: (p. 33 - 38)Preface
At the very outset, two points must be stressed. First, the period covered
by this report, 1929 through 1959, witnessed unusual, it might be said
almost revolutionary, changes in philanthropy, and indeed in many of
our great social institutions, as the public sector of the economy grew
rapidly. Second, one of the reports on philanthropy in the current series,
the report on the conference held at the Merrill Center for Economics,
should be examined by readers of this volume.' The conference report
provides the reader with a broad view of the problem and sets forth
some of the controversies that arose during •the conference regarding
the boundaries of philanthropy. Because philanthropy is not a market-
place concept, its boundaries, particularly in a period of rapid economic
and social change, are very difficult to fix. Those I have chosen to em-
ploy here would not necessarily be accepted by every group of econo-
mists, for the reasons stated in the conference volume and restated
herein.
Ralph L. Nelson provided much help in the preparation of the
estimates of the income of private domestic philanthropy and in the
'Philanthropy and Public Policy (Frank G. Dickinson, ed.), New York, Na-
tional Bureau of Economic Research, 1962. One of my two articles in it, "The
Highlights of the Conference," summarizes various opinions regarding a definition
and the scope of philanthropy.34 THE CHANGING POSITION OF PHILANTHROPY
particularly difficult task of trying to estimate the incomes of religious
institutions, which are not required to report their income under our
tax laws.
I am also indebted to those who took part in the Conference on Phi-
lanthropy and to three of my colleagues on the research staff of the
National Bureau of Economic Research—Gary S. Becker, C. Hariy
Kahn, and Raymond Goldsmith—for helpful suggestions. In the
computation of the tables in Chapters 7, 8, and 10, I was assisted by
Joyce Goldy Skeels, Stephen M. Munsinger, and David P. Evans. Natalie
Nayler served in many capacities in this study, and Maude Pech of the
National Bureau staff has been invaluable in the later stages. James F.
McRee, Jr., and Joan R. Tron edited the manuscript.
Most of all, I am indebted to Solomon Fabricant and Geoffrey H.
Moore for the direction of this study from its inception.
Frank G. Dickinson
Northern Illinois University
DeKaib, Illinois1 Basic
Concep ts
The word philanthropy literally means "love of mankind." Philanthropic
acts manifest the generosity of the giver. The literal meaning of the word
must not be forgotten at any stage of a study of philanthropy, for our
period of time or for any period of time. It does not, however, provide
a means for circumscribing or limiting the concept itself. All acts
that we perform because of love of our fellow man would be indeed
difficult to encompass, so the definition should indicate some boundaries
which the literal meaning of the word does not provide.
One always hesitates to try to define a concept as one can define a
term, but one can describe a concept. In this study what we mean by
philanthropy is giving money or its equivalent away to persons and in-
stitutions outside the family, without a definite or immediate quid pro
quo for purposes traditionally considered philanthropic. If one were in
an ideal position to measure all payments which might be called philan-
thropic, he would certainly look for all types of transfer payments, ex-
cluding only the transfers between members of the family. The term
family, in the sense that it is used currently by the Office of Business
Economics and Bureau of the Census, i.e., persons who are living to-
gether, would probably seem too narrow in some family situations. But,
as will be noted in the discussion of the data, it has not been possible to36 THE CHANGING POSITION OF PHILANTHROPY
include all the amounts that are needed to describe this ideal concept
of philanthropy.
This implies that an attempt is being made to measure the generosity
of the American people. If the generosity is manifested toward the
peoples of other countries, the data are assigned to foreign philanthropy,
either private or public. The concept includes all types of transfer pay-
ments that meet the standard regardless of their size. If the funds are
provided, through government, the resulting expenditures are classified
as public philanthropy, domestic or foreign. The decision not to restrict
the concept to private sources of funds may cause some to find this
concept of philanthropy too broad.
The basic emphasis, however, is on the activity itself. If it has been
traditionally considered philanthropic and is transferred from a private
area to a public area, it is still considered to be a philanthropic expendi-
ture. At the beginning of the period, and before the Social Security Act
began to distribute benefits, many types of local, private, secular, and
religious provisions were made for the care of the aged. In addition,
local and state government funds were used under some circumstances
to provide for the care of the indigent aged. Now that so much of this
activity has been transferred from the private to the public sphere, this
concept implies only the need to distinguish between public domestic
philanthropy and private domestic philanthropy. This illustration also
indicates some of the flexibility inherent in both the broad design and
the broad concept of philanthropy. Again, for those who prefer some
other, possibly narrower, definition, the data are arranged in such a way
as to facilitate rearrangements and exclusions to fit particular needs.
On the whole, it seems wiser to use a broad definition in order that
more pertinent data may be brought within the compass of study.
It is much easier to remove data or classifications from a study than to
insert new ones. Although our classifications may not be ideal for every-
one, the intention will be to keep them in line with this purpose.
THE PERIOD 1929—59
Theavailability of data was only one factor in the choice of the period
to be covered by this study. The year 1926, for example, would have
been a better initial year for the religious aspects of philanthropy be-BASIC CONCEPTS 37
cause of the thorough Census of Religious Bodies by the Bureau of the
Census in that year.' On the other hand, the comprehensive data for
social welfare expenditures, starting about 1935,suggestedthe choice
of 1935 as the first year, but the Great Depression could not be omitted.
The periods covered by two earlier National Bureau studies 2endedin
the 1920's; this fact was a minor consideration. -.
Thebasic reason was historical. The present study covers one set of
activities in the social history of the American people. In preparing the
general plan for the study, the 1920's seemed to loom as the end of a
period in the history of philanthropy and the dawn of a new period
which may well be called the "social welfare" era.
THE RESEARCH DESIGN
Philanthropy has its international as well as its domestic aspects. And
in the support of philanthropic endeavors both public and private funds
are intermingled. Therefore, for this study a fourfold division is clearly
indicated, which I shall term the quadrants of philanthropy: private phi-
lanthropy, domestic and foreign, and public philanthropy, domestic and
foreign.3
The reader should keep in mind also that the data will be assigned to
each quadrant on the basis of who gives (public or private) and who
receives (domestic or foreign), the fundamental relationship inherent in
philanthropy itself.
Some of the reasons for this choice of research design will not be
apparent until later in the study. Many familiar with the long history of
charity, poverty, pauperism, and the various attempts over the centuries
to deal with the problem and the related problems within the broader
orbit of philanthropy, as well as with the contemporary situation in the
late 1920's, might choose a different design. Indeed, it must be stated
'United States Department of Commerce, Bureau of the Census, Religious
Bodies:2926,Washington, 1930, 2 vols.
2WilifordIsbell King, Trends in Philanthropy: A Study in a Typical City,
New York, NBER, 1928, and Pierce Williams and Frederick E. Croxton, Corpora-
honContributions to Organized Community Welfare Services, New York, NBER,
1930.
For a discussion of this terminology, see my chapter "The Highlights of the
Conference" in Philanthropy and Public Policy, New York, NBER, 1962.38 THE CHANGING POSITION OF PHILANTHROPY
emphatically, that this designation of philanthropy is not necessarily the
best for any other period. For example, as King noted in his study of
philanthropy in New Haven, Connecticut, during the period from 1900
to there were no federal government contributions to philan-
4Willford I. King, Trends in Philanthropy.
thropy in New Haven as late as 1925. In a more general way, this four-
fold treatment of philanthropy might have proven somewhat awkward
had the period of study been the first three decades of the twentieth cen-
tury instead of the second three. Indeed, for an earlier period when
there were not so many persons acting as individuals or as private or
public officials giving away so much money to so many persons at home
and abroad, for so many purposes, the present concept would probably
have been too broad.
The most essential fact in choosing a research design for this study
was that philanthropy is essentially a dynamic subject because it mani-
fests a contemporary response to a particular set of conditions. It would
have been possible, of course, to exclude one or more of the quadrants
and, instead, call the expenditure classified therein substitutes for phi-
lanthropy, or income transfers, or benefits guaranteed by government.
As the data are developed, however, it will probably become abundantly
clear that the use of such terms would have narrowly confined the treat-
ment of a dynamic subject in a very dynamic period of social, economic,
and political change, thereby blurring historical patterns.
Finally, this study emphasizes the flow of funds, that is, income and
outgo. It had been hoped at the beginning to provide the asset and
liability items, so that the report would, in a certain sense, become a
section of the national wealth and income accounts, but limitations of
time and information rendered that impracticable.

The Changing Position of Philanthropy in the American Economy

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