Teaching Generosity in Philanthropy
in Business Schools and Organizations
Princeton University | July 10 - 12, 2008

Organized by:
The Program in Business and Ethics of the Witherspoon Institute

Sponsored by:
Essentials in Education
The Trinity Forum
The Center for Thrift and Generosity at the Institute for American Values
The Bendheim Center for Finance at Princeton University

Essentials in Education, the Institute for American Values, the Trinity Forum, and the Witherspoon Institute organized a private consultation entitled Teaching Generosity in Philanthropy in Business Schools and Organizations held in July, 2008 on the campus of Princeton University. The Consultation included scholars from the leading business schools and philanthropy leaders who are concerned with how to teach and properly conceive of philanthropy.

The initial phase of a joint venture among these non-profit organizations, the Consultation proposed to examine the challenges of, on one hand, encouraging business schools in teaching generosity in philanthropy, and on the other hand, leading entrepreneurs and corporations to integrate the virtues of thrift and generosity in their operations. The Consultation adopted moral and faith perspectives to explore the question, on theoretical and practical grounds, of what is required from business institutions to foster cultural flourishing. The Consultation was the first step in developing a proposal to a major foundation to fund research in the area of philanthropy, economy, and society.

Andrew Carnegies Gospel of Wealth (1889) focused on the importance of stewardship in one's own lifetime in contrast to posthumous gestures. Carnegie was so emphatic on this point that he concluded that a person dying with millions left over dies unwept, unhonored, and unsung, no matter to what uses he leaves the dross which he cannot take with him. Of such as these the public verdict will then be: The man who dies thus rich dies disgraced.

Graduates of business schools have generated much wealth. But can business schools improve on what they teach their students to do with that wealth, in particular through the lens of Carnegie's Gospel of Wealth, which has been a favorite reading of many people, including the late William E. Simon, Sr., former U.S. Secretary of the Treasury?

With Andrew Carnegie's remarks in mind, the consultation explored with respect to major business schools:
1) What students at business schools need to know,
2) What are they learning now, and
3) What needs to be done.
For this last question, the consultation solicited from each speaker a brief, several-page outline of what they would do with a $1 million research grant in this area.

Speakers and discussants at the meeting included:

Curtis Meadows, Meadows Foundation
Gene Tempel, Indiana University
Arthur Brooks, Syracuse University
Rob John, University of Oxford
Paul Schervish, Boston College
Gregory Dees, Duke University
Claire Gaudiani, New York University
Jim OToole, University of Denver
Marvin Olasky, UT Austin
James Piereson, William Simon Fdn.
John Templeton, Jr., Templeton Fdn.
Amy Kass, University of Chicago
Carlos Cavalle, IESE; Social Trends Institute
Christine Letts, Harvard University
Frank Hanna, HBR Capital, Ltd.
Dan LeClair, AACSB
Mark Berner, New City Commons
Don Eberly, Civil Society Project
Luder Whitlock, Trinity Forum
Robert Andringa, Engstrom Institute
Charles Stetson, Essentials in Education
Jay Hein, White House Office of Faith-Based Initiatives

Below are some inquiries that framed the conceptual scope of the consultation.

1. Why should business schools and organizations be concerned with stewardship and philanthropy?
Gaining a deeper understanding of these concepts may equip business leaders to replace fashionable and short-sighted management strategies with sharper thinking, such as moral analysis. To equate the goal of business with just making money is dubious from both moral and economic points of view. One need merely consider how, without sound economic underpinning, making a lot of money can usher in wealth destruction, as the recent scandals of Enron, WorldCom, Global Crossing, and others have shown.

Business leaders need to be concerned with deterring scandalous business conduct. But ethics have a positive valence. From a wealth-creation standpoint, teaching business with examples of the innovative spirit behind and best practices for fashioning new and better products and services can inspire business leaders. Moreover, a concerted focus on stewardship and philanthropy prompts business leaders to see beyond the short term and adopt a long-term perspective where sustainability matters.

2. How and in what ways should companies and entrepreneurs create wealth?
With the rise of the corporate social responsibility movement (CSR), corporations are expected to be philanthropic, to be good corporate citizens, to support local communities, to assist victims of natural disasters, to care about their environmental impact and provide health care for the indigent. Yet against the backdrop of such expectations, CSR advocates have downplayed, if not altogether ignored, business organizations bedrock financial and economic responsibilities: those things a business does intrinsically as a business, not as a business responding to outside expectations. Indeed, the claim that companies share responsibility for creating public wealth runs afoul of the views of those, such as Milton Friedman, who claim that profit maximization is the sole responsibility of business. Consequently, an important question for the consultation to address is the scope of corporate responsibility for creating public wealth and the obligations of stewardship and philanthropy that are connected with it.

3. What is the nature of philanthropy?
Today we are witnessing new kinds of initiatives that extend beyond traditional philanthropy to encompass the transfer of means for others to generate their own wealth. The question therefore arises as to what business practices fall under the concept of philanthropy. New approaches can be seen in morally motivated micro-lending organizations like ShoreBank, Operation Hope, the Grameen Bank, and the Microfund for Women in Jordan. Other questions may be addressed: Do companies themselves have philanthropic obligations, or do such obligations only attach to (wealthy) individuals, governments, and NGOs? How ought philanthropic obligations to be shared and coordinated as between these categories? These questions are vital from the standpoint of business education.

4. What is the connection between wealth, stewardship, and sustainability?
Investment is necessary for wealth maintenance as well as growth. If the investment rate is high, the present generation may carry a burden of reduced consumption for the benefit of future generations. However, todays consumer society seems headed the opposite way, favoring consumption to the detriment of investment. Moreover, the overuse of certain natural resources may create costs for which future generations will have to pay. The question thus arises as to what role the concepts of stewardship and sustainability should play in informing our notions of consumption, investment, and wealth. To say that wealth creation should be sustainable means that it ought to be capable of meeting the needs of the present generation without compromising the ability of future generations to meet their needs. Is this issue framed adequately in business education?

5. What is the wealth of a nation?
Should the wealth of nations encompass both private and public goods? Public goods are characterized by non-rivalry and non-exclusive consumption. The functioning of the markets and the production of private goods depend on such public goods. In contrast, when speaking of the wealth of an individual or a company, one typically considers only the assets under its control, thereby ignoring the public goods from which it benefits or with which it may be burdened. In the international realm, public goods are gaining in importance and often constitute a driving force behind transnational background institutions.

A robust conception of the wealth of a nation can include the total amount of economically relevant private and public assets. Yet while some economic theorists suggest that properly functioning markets are powerful engines for generating private wealth, markets can fail in building public wealth. Moreover, there is a question of how to understand physical, financial, human, and social capital as components of wealth.

6. What are morally appropriate motivations for charitable contributions?
Charitable contributions often generate self-interested advantages such as tax benefits and positive corporate images. Sometimes corporations and individuals use philanthropy as a strategy for deflecting public attention away from unscrupulous conduct in some area of their operations. How fair and accurate are those judgments that people make about what they take to be the real, underlying motives of wealthy individuals and corporations undertaking philanthropy? Is this a good practical reason for not attracting a lot of publicity for an ethical companys charitable giving?

7. What criteria should apply to the selection of a charitable cause?
Presumably there must be confidence that the recipient will make good use of a contribution. Recall, for instance, the United Way scandal. What constitute reliable sources of information about worthy causes? How does one determine if the target of ones contribution is an organization of integrity?

8. Is it fair to criticize wealthy individuals on the basis of their alleged lack of charity?
Prominent financiers such as Warren Buffet can become targets of attack for a purported lack of philanthropic sensitivity and inappropriate stewardship. Yet in some instances critics may fail to see or appreciate benefits that wealthy individuals have already brought to others (employees, investors, communities) from building their businesses. Some leave valuable legacies of inventions, new business models, valuable forms of intellectual property, and so on, which redound to the benefit of current and future generations. Whatever opinion one may have about particular financial celebrities, concern for the underlying debate leads to deeper questions about how we understand wealth, stewardship, and philanthropy.

9. Can thrift and generosity become vices rather than virtues?
To consider the case of Wal-Mart, there is controversy about whether the companys philosophy of frugality (originating with Sam Walton, himself among the richest people in the world) and cost-cutting is in some respects a ruse for exploitation of its workforce. This is not to mention the furor that arose over the disclosure of Wal-Mart helping its own workers fill out government applications for food stamps. As for generosity, the plight of Consumers United is noteworthy. The insurance company was so aggressive in its altruistic initiatives that industry regulators shut it down on the grounds that it lacked adequate reserves to cover future insurance claims of its policyholders. Broader understandings of what makes for an ethical company and ethical leadership seem to constitute a conceptual backdrop for how one interprets the virtues of thrift and generosity in light of a business bottom line.

10. How do religious and philosophical attitudes towards wealth, stewardship and philanthropy differ?
In what ways are different religious attitudes towards these concepts affected by their understandings of the material versus the spiritual world, and their account of the creation of the world itself? How do various philosophical understandings of the nature of the human person (e.g., the self and its relation to others) influence their accounts of the value and meaning of wealth, stewardship and philanthropy?

11. Some questions raised by addressing the faith dimension.
How do Judaisim and Christianity understand and value business and economic life in general and prosperity and wealth in particular? What role does the distinction between private and public wealth play in a Judeo-Christian approach to business and economics? Ought wealth to be considered as material, or does it also include a moral and spiritual dimension? Is there a more noble purpose of business and its role in society? Rather than seeing business as simply about making money and acquiring wealth, is there a way to see business as a means to higher spiritual ends, involving a mixture of motivations that are self- and other-regarding? Do model companies-of-faith exist; if so, what lessons can be learned from them?

12. What challenges does taking a global perspective pose for philanthropy?
To the extent that globalization brings about the acquisition of wealth, is philanthropy called for to reallocate wealth back to the poor? Do the vast economic resources of mulitnational companies (some of which are richer than the poorest nations) impose a special obligation on them to help the poorer countries develop? How do attitudes about corporate philanthropy differ from culture to culture, for instance, from the U.S. to Europe to Asia, and what factors determine those differences in attitude?