Julius Rosenwald, one of the guiding geniuses behind the creation of the Sears, Roebuck & Co. empire, decided at a relatively early age to devote his immense fortune to philanthropic ends. Described as “down-to-earth, flexible, compassionate, and people—rather than institution—centered,” he was committed to “making American democracy work and to the struggle against racial and religious intolerance.”
"The aim of my life is to have an income $15,000 a year, $5,000 to be used for my personal expenses, $5,000 to be laid aside, and $5,000 to go to charity." - Rosenwald, 1890s
Rosenwald began his philanthropy by making relatively small gifts. In 1912, for example, on the occasion of his fiftieth birthday, he donated $25,000 to help Booker T. Washington expand his Tuskegee Institute to smaller, far-flung campuses. When Washington found he couldn’t use the final $2,100 of the grant for the stated purpose, he asked Rosenwald’s permission to build six small rural schoolhouses in Alabama for African American children. Rosenwald agreed.
Based on positive initial results at those first six schools, Rosenwald gave Washington another $30,000. The immediate goal was to build a hundred similar schools across rural Alabama. But Rosenwald also hoped that these “Rosenwald schools” would spark “a revolution in public funding for education [by shaming] public officials into spending equal, even if separate, amounts for the education of black and white people.”
"It is a crime to pile up money after one has accumulated all that he needs for himself and his family. There is a stage where acquisition becomes a vice." - Rosenwald, 1918
The highly visible program was considered a great success, and soon other Southern states asked Rosenwald to expand his program to include them. By 1920, the Julius Rosenwald Fund was managing a $500,000 annual school-building program. What followed was nothing less than the education revolution Rosenwald had envisioned. By 1928, one in five of all black schools in the South were Rosenwald schools, and one in three of the region’s black students were being taught in those schools.
By the time of Rosenwald’s death in 1932, the program had helped build 4,977 rural schools. Significantly, the fund contributed only about 15 percent of the overall cost of those schools; the remainder came from state and local resources. Earlier than many philanthropists, Rosenwald recognized the “power of leverage” (although he probably didn’t use that label, any more than he would have tried to analyze his “social return on investment”). Not only did communities help pay for their “black schools”; in many cases, the construction of a new and relatively well-equipped black school compelled local authorities to build an equally good school for their white students. Education was upgraded for black and white children across the South.
"I can testify that it is nearly always easier to make $1,000,000 honestly than it is to dispose of it wisely." - Rosenwald, 1929
Unlike other endowed foundations, which were designed to fund themselves in perpetuity, the Rosenwald Fund was designed to expend all of its funds for philanthropic purposes before a predetermined "sunset date." It donated over $70 million to public schools, colleges and universities, museums, Jewish charities, and African American institutions before funds were completely depleted.
Rosenwald decreed that all monies had to be spent within 25 years of his death. He thought that funds should have the largest impact possible at the time it was needed, and he believed that others would pick up his mantle and continue to give in the future.
While Rosenwald never possessed the assets of his contemporaries Rockefeller and Carnegie (in current dollars Rosenwald’s total donations amounted to something under $2 billion) he got an enormous bang for his buck. This was due to his philanthropic vision and his determination to pump his fortune quickly into ameliorative projects rather than locking it up in permanent trusts.
In addition to changing the country, Rosenwald changed philanthropy. Together, this combination of the lives he directly transformed, and his many innovations in the practice and execution of giving which inspired other wealthy individuals to become more effective givers, set him apart. That he is largely unknown—thanks to his principles like keeping his name off projects and limiting the life of his foundation—is only a further tribute to his good motives.
References
Give Smart: Philanthropy that Gets Results. Book by Joel Lawrence Fleishman and Thomas J. Tierney
