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Title, Table of Contents, and the Introduction of my graduation thesis.

Title, Table of Contents, and the Introduction of my graduation thesis.

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Graduation Thesis Graduation Thesis Document Transcript

  • The Changing Role of Philanthropy in Relation to Poverty in the U.S. by Koichi Goto A Thesis Submitted to the Faculty of Arts and Sciences of University of Tokyo in Partial Fulfillment of the Requirements for the Degree of Bachelor of Arts January 2008
  • Contents Introduction……………………………………………………….………...1 1. Welfare Reform and the Aggravation of Poverty in the U.S. ................. 3 2. The Roots of Poverty and the Neo-liberalism ........................................ 7 1 ) Demoralization of the Poor................................................................................................ 7 2 ) The Invisible Poor.............................................................................................................. 9 3 ) Poverty and the American Unity...................................................................................... 10 3. Historical Overview of Philanthropy: Integrations and Doubt............. 11 1 ) Philanthropy as American Value ...................................................................................... 11 2 ) Integration of Philanthropy and the Government ............................................................ 12 3 ) Integration of Philanthropy and Business ........................................................................ 15 4 ) Business Philanthropy...................................................................................................... 16 5 ) Doubt in the Power of Philanthropy ................................................................................ 18 4. The New Structure of Philanthropy ...................................................... 20 1 ) Democratization: Public Grantmaking ............................................................................ 20 2 ) Diversification of Traditional Foundation Philanthropy .................................................. 23 3 ) Effect of the Recent Change ............................................................................................ 24 5. The Changing Role of Philanthropy ..................................................... 25 1 ) Who Takes the Role? ....................................................................................................... 25 2 ) Redefinition and Reorganization ..................................................................................... 27 3 ) Role of the Government................................................................................................... 29 Conclusion……………………………………………………….………...29 Bibliography………………………………………….………….………...31
  • 1 Introduction The U.S. history has a long history of controversy about the economic balance between “the have” and “the have-not”. Since 1930s, the U.S. government had found its position as the “welfare-state” government, and complemented various welfare programs. However, today’s U.S. policies put importance on relaxations of “unnecessary” regulations and the open-market policy. In a sense, the U.S. citizens are now experiencing a kickback seeking for the small and efficient government. This reverse transition - “the end of modern welfare state – not a nonwelfare moment but a postwelfare moment” - has not ever been seen in the history (Goode and Maskovsky 9). In the transition, a lot of socio-political measures were introduced to enhance free competition. As a result, the competitiveness of the American business firms has revived particularly led by the financial service and the IT industries. On the other hand, the poor in the U.S. became more involved in the international competition. On the other hand, charitable giving is spreading in the U.S. and abroad. Not only by large foundations giving out vast amount of money, a lot of individuals are making an effort to contribute to society by way of philanthropic activities. The Foundation Center reported that the U.S. charitable giving is over 40 billion dollars in 2006. This figure is remarkable if compared to the total giving by Andrew Carnegie and John D. Rockefeller while they were alive, which is about 14 billion dollars in the current dollar. Thanks to the economic expansion in the recent U.S. history, the charitable giving is estimated to keep growing.
  • 2 Figure 1 Giving by U.S. Foundations, 1996-2006 50 40.7 40 36.4 31.8 30.5 30.4 30.3 Dollars in Billions 30 27.6 23.3 19.5 20 16.0 13.8 10 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Note: All figures based on unadjusted dollars. Figures estimated for 2006. Source: The Foundation Center, Foundation Growth and Giving Estimates, 2007. The rapid growth of philanthropy in the last decade shows that philanthropy can have a possibility of giving a huge impact on nationwide affairs. Therefore, it is meaningful to look for the possibility that philanthropy can change the actual, and not necessarily desirable, condition of poverty in U.S. society. This thesis will focus on the significant shifts both philanthropy and poverty are experiencing in the recent U.S. history, and will make an attempt to seek for the possibility of philanthropy which may present a new contexture of U.S. society.
  • 3 1. Welfare Reform and the Aggravation of Poverty in the U.S. On July 14th, 2005, New York Times published an article titled “How Long Can Workers Tread Water? – Income Gains Go Mostly to the Affluent”. The article pointed out a simple fact that the compensation for employees grows slower than the growth of corporate profit. The profit of business firms is “mostly concentrated at the top. At the bottom end, income growth has mainly come from an increase in employment - not better wages.” (Porter) In fact, a lot of data suggests that the inequity of income in the U.S. is widening. According to 2005 data of the Internal Revenue Service, the wealthiest 1% of Americans earned 21.2% of all income in the U.S., up sharply from 19% in 2004. On the other hand, the bottom 50% earned only 12.8% of all income, down from 13.4% in 2004. On the other hand, the real median household income increased 0.7 percent, from $47,845 to $48,201, between 2005 and 2006. Figure 2 Household Income at Selected Percentiles and Real Median Household Income, 1967-2006 2006 dollars 200,000 180,000 160,000 140,000 120,000 95th percentile lower limit 100,000 90th percentile lower limit 80,000 80th percentile upper limit 60,000 50th (median) 40,000 20th percentile upper limit 20,000 10th percentile upper limit 0 1966 1976 1986 1996 2006 Source: U.S. Census Bureau. Income, Poverty, and Health Insurance Coverage in the United States: 2006.
  • 4 Figure 3 Income Share of the Top 10%, 1917-2005 50 45 Income Share ( % ) 40 35 30 25 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005 Note: Income is defined as market income but excludes capital gains. Source: Internal Revenue Service homepage <http://www.irs.gov/taxstats/index.html> On the other hand, some critics insist that the poverty in the U.S. has been alleviated to some extent. The official poverty rate in 2006 was 12.3 percent, down from 12.6 percent in 2005. Compared to the poverty rate in 1959, the first year for which poverty estimates are available, the poverty rate has decreased remarkably. However, the method of estimating the poverty threshold was revised 4 times in 1966, 1974, 1979, and 1981. Therefore, the data since 1959 until today may not be comparable. Today, there are 36.5 million who are in poverty. Figure 4 Number in Poverty and Poverty Rate, 1959 to 2006. 9 20 8 7 Number of Family (million) 6 15 Poverty Rate ( % ) 5 4 3 10 2 Number of Poor Families 1 Poverty Rate for Families 0 5 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 Source: U.S. Census Bureau homepage <http://www.census.gov/hhes/www/poverty/histpov/hstpov13.html>
  • 5 Goode and Maskovsky explain that the current poverty is comprised and sustained by the neo-liberal socio-economic policy of the U.S. government. They think that today’s economy is polarized due to the U.S. government’s belief, the Market Triumphalism, which believes that the free market can achieve the best efficiency and is the only way to achieve both the economic growth and the amplification of the welfare system at the same time. As a result, the bipartisan legislative actions “rolled back, privatized, or definitively dismantled” important social supports for the poor (Goode and Maskovsky 5). They criticize the neoliberalism as follows. : Everyone, including the poor, is assumed to be possessed of empowerment thanks to the liberating structure of the market itself. Once government gets out of the way of “opportunity,” the logic goes, progress will take care of itself. Accordingly, no specific measures need be taken to address the problem of poverty and inequality, since these will eventually be solved by natural working of the “free” market… The neoliberal valorization of the market thus has a particularly pernicious effect on the creation of alternative political responses involving the poor. For instance, residents in poor and immiserated neighborhoods are increasingly encouraged to purge their ranks of the undeserving poor in order to make their neighborhoods more attractive to private investors. This “localist” agenda is now sold to neighborhood groups by well-meaning state functionaries as the only option for neighborhood improvement and development, with the consequence that tensions and antagonisms within and between poor communities are intensified. (Goode and Maskovsky 9) Indeed, the U.S. government did not amplify the social safety net sufficiently when the U.S. was under the strong influence of the international economic restructuring in the recent decades. The economic restructuring was mainly consisted of the relocation of manufacturing
  • 6 activities to low-wage regions in the world, the descent of wage, and the increase of the number of temporary jobs. In this situation, the basic belief of the U.S. policy was to stimulate the economic growth and elevate the economic status of all the U.S. citizens. From this standpoint, several important public supports were abolished in order to accelerate the “free” and “equal” competition in society. The introduction of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996, in particular, is the typical of the neo-liberal approach to “end welfare as we know it”, claimed by President Clinton in 1993. The validity of the installation of the PRWORA is suspected in terms of the improvement of the living conditions of the poor. The PRWORA adopted the Temporary Assistance for Needy Families (TANF), replacing the Aid to Families with Dependent Children (AFDC) and the Job Opportunities and Basic Skills Training (JOBS) programs. The essence of the TANF was the introduction of certain conditions and a lifetime limit to receive public supports. In addition, legal immigrants cannot receive important public supports including the Medicaid, food stamps, cash assistance, and so on under the PRWORA structure. Therefore, more and more people were obliged to live without enough public protections against sudden lay-offs, substantial cuts of workers’ benefits, and the severe working conditions. It is easy to foresee that such immigrants had more difficulty in finding a new job once they lost one, because they cannot receive enough support necessary to find one. As a result, they are more vulnerable to the social conditions. By this means, the economic polarization has been intensified by the economic policy favoring the free market and by the abolition of important social safety nets. The structure of poverty is thus unprecedentedly fixed. Indeed, the PRWORA instantaneously succeeded in reducing the welfare cost. However, the deterioration of the living conditions of quite a few people in society will result in the rapid and unprecedented increase of the total number of people who must rely on the public support.