The Greatest Philanthropist You’ve Never Heard Of

.

rosenwald_julius_large

Julius Rosenwald isn’t much remembered today, but eighty years ago he was considered one of the “big three” of American philanthropy, along with John D. Rockefeller and Andrew Carnegie. It’s a shame that Rosenwald is largely forgotten. He was a remarkable guy, and his approach to philanthropy is worth commemorating and emulating.

Julius Rosenwald was the president and chair of Sears, Roebuck and Co. in the early part of the twentieth century. Today we think of Sears as an aging big box retailer, but a hundred years ago Sears was the Amazon.com of its time, perfecting the new concept of mail order commerce. Customers – most living in rural areas – could find just about anything they could imagine in the 1,000-page Sears, Roebuck catalog, from wheelbarrows to night gowns to pre-fabricated homes, all at prices that undercut local retailers. Rosenwald was, by most accounts, a remarkably down-to-earth and unpretentious man. And he was also an extremely wealthy man.

As Peter M. Ascoli’s Julius Rosenwald describes, for the last twenty-five years or so of his life Rosenwald’s major interest was philanthropy. Rosenwald’s philanthropic approach was distinctive. He popularized the notion of the challenge grant: Rosenwald never wanted to be the sole funder, and even as he was being extraordinarily generous, he would require that his million-dollar gift be matched by two or three or five million from other sources. And unlike Rockefeller or Carnegie, he adamantly opposed creating a permanent, perpetual foundation.

Rosenwald was a man of many charitable interests. He was very active in Jewish philanthropy, particularly helping Russian Jews. He was the primary funder and founder of Chicago’s Museum of Science and Industry, which was originally known (despite his protestations) as the Rosenwald Museum. He was a trustee and major benefactor of the University of Chicago. But Rosenwald was best known for his commitment to the education of African American students – hardly a topic of concern for most white Americans in the early twentieth century.

At the time, Jim Crow ruled, and the Southern states enforced strict segregation and practiced legal discrimination. (The segregation in Rosenwald’s city of Chicago, while not enshrined in the law, was nearly as absolute.) The doctrine of “separate but equal” was in fact a fig leaf for separate and grossly unequal. Many Southern communities had no schools at all for African American children, and those schools that existed were typically crumbling, substandard, and open only three or four months a year.

Rosenwald collaborated with Booker T. Washington and others to create a program that incentivized local authorities to create new schools for black children. The essential formula was that a third of the money for construction would come from state or county government, a third would come from local donors, both white and black, and the final third would come from Rosenwald. Moreover, Rosenwald and his agents developed exacting architectural blueprints so that the schools would not only be built, but that they would be built well. Finally, the schools needed to be open for a full, traditional school year.

More than 5,000 “Rosenwald schools” were constructed in the South, eventually serving some 650,000 students at any one time. It is estimated that over the course of several decades one-third of all African American children received their education in schools funded by Rosenwald. Though Rosenwald did not directly attempt to overturn segregation laws – such an effort would have been unthinkable and doomed to fail in the 1910s and 1920s – and though funding for the education of black students remained vastly inferior to that for whites, the Rosenwald schools nevertheless represented an enormous, tangible leap forward for black education. And in creating the schools, Rosenwald helped set the stage for the successes of the civil rights movement, many of whose leaders began their educations at Rosenwald schools. Rosenwald’s form of philanthropy was activist, even revolutionary. As W.E.B. DuBois wrote on Rosenwald’s death in 1932, “He was a great man. But he was no mere philanthropist. He was, rather, the subtle stinging critic of our racial democracy.”

Rosenwald dramatically affected millions of people and helped to change society. What he did not do was create a permanent foundation. Rosenwald disliked permanent foundations and endowments with a passion. He wrote, “I am not in sympathy with this policy of perpetuating endowment and believe that more good can be accomplished by expending funds as trustees find opportunities for constructive work than by storing a large sum of money for long periods of time.” He argued that permanent charitable funds were folly, partly because creating a perpetual endowment would “inject the great fortunes of the day into the affairs of the nation five hundred or a thousand years hence.” And so the Julius Rosenwald Fund was created to give away all principal and interest by twenty-five years after Rosenwald’s death. His trustees completed the spend-down within sixteen years, an accomplishment that Julius Rosenwald would have appreciated.

Had Julius Rosenwald followed a different path and created a permanent foundation, you might well have already known his name.  But would he have had as great an impact on the country? My vote says: No way.

Julius Rosenwald is the gold standard for thoughtful philanthropy. Let’s make him famous again. Begin by forwarding this column to friends and posting it on Facebook and LinkedIn. If you are in a position to honor a truly generous philanthropist in your community, give that person the Julius Rosenwald Award. And as you ponder your own charitable decisions, ask yourself: What Would Julius Do?

Copyright Alan Cantor 2014. All rights reserved.

Share this: Facebooktwittergoogle_plusredditlinkedintumblrmailFacebooktwittergoogle_plusredditlinkedintumblrmail

5 thoughts on “The Greatest Philanthropist You’ve Never Heard Of”

  1. Great post, as usual, Al. Great to hear of this man and his humble, but effective approach!

    The other side of the permanent foundation argument would be that an endowment has the ability to create much more good over time as the fund develops interest, correct?

  2. thanks for writing this Al. We share admiration for Julius – his story is worth being trumpeted.

Leave a Reply

Your email address will not be published. Required fields are marked *