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Perhaps no man in history did more to institutionalize the act of giving than Andrew Carnegie. Throughout his life, Carnegie systematized the process of philanthropy, establishing 22 organizations tasked with giving away his vast fortune into perpetuity. Carnegie focused on a broad range of issues: everything from science to the arts to education to world peace. Upon his death, the steel magnate entrusted the institutions which bear his name to help advance future generations by promoting his ideals according to the best efforts of each organization’s trustees.

One way this disparate family of Carnegie groups stays in touch is by working together to bestow the Carnegie Medal of Philanthropy—which “seeks to inspire a culture of giving by recognizing outstanding philanthropists” and is a special project of the Carnegie Corporation of New York. Every two years, the 22 organizations meet to confer the medal to a select group of ultra-wealthy donors who are then publicly feted and honored.

An Elaborate Process

The medal was created in 2001, at a time when many of America’s richest people had yet to turn to large-scale giving. But today, amid constant media attention to myriad wealthy benefactors, and with the Giving Pledge pulling in new members every year, one wonders how much sense it makes to continue the Carnegie Medal program—not least because of its price tag.

The elaborate ceremonies (there are two) undoubtedly cost a pretty penny to produce. The latest iteration— which commemorates both the 10th medal ceremony, as well as the centennial anniversary of Andrew Carnegie’s death—is being held at a gala event in New York City this October. The event where the medalists were announced last month, was its own involved affair, with representatives of the 22 Carnegie institutions convening in Dunfermline, Scotland. That’s a lot of money spent on travel, lodging, catering, publicity, etc.

Then there’s the medal selection process itself, where the heads of the 22 Carnegie organizations meet throughout the year in various cities, such as New York, Pittsburgh (where Carnegie’s steel empire was founded), Washington D.C., and Scotland. Nominations are made by each Carnegie organization, and the 22 nominees are whittled down to the nine medalists who have promoted long-lasting philanthropic change throughout their lives.

Carnegie himself distinguished between philanthropy and charity; charity targets symptoms, philanthropy targets root causes. In order to ensure that each medalist meets Carnegie’s lofty standards, the committee validates the nominees’ largess through tax returns and other official documents, and scrutinizes their giving in as many newspaper reports and magazine articles as the committee can get its hands on, in order to safeguard against being misled by a single journalistic opinion. That’s a lot of time and effort (and money) spent on the selection process.

As ultra-wealthy donors, this year’s recipients are no strangers to being celebrated. So why is Carnegie bothering to honor them at all? Wouldn’t all of those resources be better allocated elsewhere in a world with no shortage of pressing problems?

These are good questions to ask at a time of growing scrutiny of how philanthropic dollars are spent—and who really benefits. Carnegie’s gold-plated medal program sounds like it involves a lot of elite hobnobbing and nice meals. But what’s its actual impact? “Wealth is not to feed our egos,” Andrew Carnegie famously said, “but to feed the hungry and to help people help themselves.”

Getting Trillions of Dollars Off the Sidelines

As it turns out, more flattery of leading philanthropists may be just what the doctor ordered.

Last December, we covered a Bridgespan report which revealed that the richest Americans are sitting on $4 trillion and giving away only a tiny sliver of that. While many wealthy people say that they want to give their money away—scores have signed the Giving Pledge, after all—most just keep getting richer and richer. That includes even those billionaires who are top philanthropists. Bill Gates and Warren Buffett, for example, are both nearly twice as rich today as when they rolled out the Giving Pledge in 2010. Moreover, for the all billionaires who have signed the Giving Pledge, there are many more who haven’t—and barely give away any of their money.

It’s not clear exactly what will induce the super wealthy to give more. Maybe it’s offering these folks a compelling menu of “big bets,” as Bridgespan has done. Or creating sophisticated intermediaries that can move bigger chunks of cash, as we’ve seen with outfits like Blue Meridian Partners and Co-Impact.

But one other way to try to shake the money tree is by using a more primal set of levers to move the super wealthy to give—such as peer pressure, flattery, and recognition.

In her essential 1996 book, Why the Wealthy Give, Francie Ostrower argued that—like it not—big league philanthropy tends to be strongly wrapped up in a desire for status within upper-class culture and a sense of obligation that comes with membership in the American wealth elite.

So maybe the Carnegie institutions are onto something here. Perhaps even more pompous, over-the-top celebrations of ultra-wealthy giving is exactly what is needed to spur greater giving by these folks. While on its face, the Medal of Philanthropy sounds like little more than an ego-massage, in reality it may serve a larger purpose. To the extent that a brand like Carnegie can stimulate the rich to give as much as they claim they would like to give, that’s a really big deal—and well worth the price of a fancy gala or two.

To be clear, Carnegie isn’t actively prompting the rich to give more—at least not publicly. But the medal, and the prestige that comes with it, help create a platform for those who are active philanthropists to court their less-active peers.

A Medal Winner Pushes for International Giving

Take billionaire energy tycoon (and the only Scot to receive this year’s Carnegie Medal), Sir Ian Wood. Wood has been working to convince more billionaires to give to international causes. He cites the fact that although the United States is the most generous country on earth (based on the amount of giving per capita), a full 95 percent of all U.S.-based philanthropy goes to U.S.-based nonprofits. Put another way, only 5 percent of American philanthropy is directed at the rest of the world. The giving of Bill and Melinda Gates makes up a significant portion of that 5 percent figure. Wood—himself a signatory of the Giving Pledge—is on a mission to alter this statistic. “People say that charity begins at home,” Wood told me. “Well, maybe charity begins at home, but it needs to develop into something with a significantly wider sense of responsibility across the world.”

In addition to its native Scotland, the Wood Foundation operates in sub-Saharan Africa where it helps tea farmers optimize their harvest and improve their crop yield through sustainable methods. Wood is keen to promote global giving to his fellow billionaires, looking to move life-and-death causes more into the mainstream of philanthropy. “I don’t feel any real strong sense of global responsibility across our planet,” laments Wood. “We’ve still got a billion people around the world seriously hungry. 8,000 children die each day from malnutrition, 15,000 die each day from diseases we can cure.” Wood believes that winning the Carnegie Medal, along with his participation in the Giving Pledge, will help him engage the billionaire class about these important issues.

While it’s impossible to measure the Medal of Philanthropy’s impact, if this effort really does help pull more wealthy people into serious giving, or catalyze greater giving by existing donors, the intricate selection process and lavish ceremonies are well worth the upfront cost. Meanwhile, the program helps the Carnegie organizations stay connected and act as cheerleaders for modern philanthropy and civil society more broadly.

“Andrew Carnegie created 22 organizations, each one following the directions of their trustees and their mission,” Vartan Gregorian, President of the Carnegie Corporation, told me. “So our aim was to bring unity and cooperation for all the Carnegies.”

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