Carnegie Corporation Of New York Business Information, Profile, and History

Company Perspectives:

Carnegie Corporation of New York was created by Andrew Carnegie in 1911 to promote `the advancement and diffusion of knowledge and understanding.' Under Carnegie's will, grants must benefit the people of the United States, although up to 7.4 percent of the funds may be used for the same purpose in countries that are or have been members of the British Commonwealth, with a current emphasis on Commonwealth Africa. As a grant making foundation, the Corporation seeks to carry out Carnegie's vision of philanthropy, which he said should aim `to do real and permanent good in this world.'

History of Carnegie Corporation Of New York

Carnegie Corporation of New York (CCNY) was founded in 1911 by the prominent philanthropist Andrew Carnegie, whose principles have guided the organization since its inception. Carnegie believed that it was the moral responsibility of the rich to eschew ostentatious living, to live frugally, and to use their wealth to benefit the public. Carnegie's original endowment of the foundation had a market value of about $135 million--a legacy which had grown to $1.69 billion by the end of June in 1999. The endowment represents a capital fund that allows Carnegie Corporation to award annual grants totaling approximately $60 million. Such grants are typically made in four general areas: education, international peace and security, international development, and democracy/special projects. In all, about 300 grants are made each year. Although Andrew Carnegie's will stipulated that his bequest be used to benefit those of the United States, approximately seven percent of the available funds are used to assist both past and present countries of the British Commonwealth. In addition to making various grants, the corporation has created various study groups and commissions that have been instrumental in effecting social progress and change throughout history.

1835-1911: Andrew Carnegie and His Legacy

Andrew Carnegie, who became one of America's 19th century 'captains of industry,' was born in Scotland in 1835 as an heir only to relative poverty. His life followed the elusive 'rags to riches' pattern of the Horatio Alger dream, which posited that hard work joined with personal virtue would inevitably lead to material success in the United States. In Carnegie's case, the reality actually fit that much-maligned myth. After his family emigrated to the United States in 1848, young Carnegie started working as a bobbin boy in a cotton mill. A series of jobs with Western Union and the Pennsylvania Railroad followed before the thrifty Carnegie was able to establish his own business. It was then that he began his rise to both fame and fortune as the founder and owner of Carnegie Steel, the company that established the mammoth steel industry in Pennsylvania.

In 1901, after he turned 65, Carnegie sold his interest in his company to J.P. Morgan's United States Steel Company, devoting the remaining years of his life to philanthropy and writing. He created Carnegie Corporation of New York in 1911 as a separate foundation with a trust fund as large as the rest of his trusts combined. In the foundation's charter he also set down the principles that continued to guide Carnegie Corporation's policies and procedures throughout its history. Before his death in 1919, Carnegie followed what he had himself preached in his book, The Gospel of Wealth (1889), by giving away a personal fortune of $311 million. Outside of the Carnegie Corporation endowment, much of his wealth went into other endowments for libraries, foundations, educational institutions, and organizations and projects promoting world peace.

1912-54: The Foundation's First Four Decades

Although the initial $135 million endowment of CCNY may seem a fairly slight sum in an age in which corporate CEOs command annual salaries in that range, it was a considerable fortune in 1911. In fact, in 1915 the corporation's endowment exceeded the grand total of all spending for higher education in the United States.

During the first few years, Andrew Carnegie served as both president and a trustee of the corporation. His private secretary--James Bertram--and his financial agent--Robert A. Franks--were also trustees and officers. Along with Carnegie, they constituted the foundation's first executive committee. After Carnegie's death in 1919, the trustees appointed James R. Angell to serve as both the first salaried president, or CEO, of the corporation and ex-officio member of the board.

Just before Andrew Carnegie's death, the corporation helped fund the Teachers Insurance and Annuity Association (TIAA) through its sister organization, the Carnegie Foundation for the Advancement of Teaching (CFAT). CFAT was created in 1918 to 'protect academic mobility and encourage savings by the nation's college professors.' In time, TIAA would become the nation's largest private insurance company.

The third president of CCNY was Frederick P. Keppel, who served in the capacity from 1923 to 1941. It was during his tenure that in 1938 CCNY commissioned Swedish social scientist Gunnar Myrdal to undertake a comprehensive study of the American Negro, a seminal work that strongly influenced the direction of race relations in the desegregation era after World War II. Myrdal's study helped dispel the myth that racial equality and civil justice could be achieved through a system of separate but equal education.

Throughout its early history and into the post World War II years, most grants awarded by CCNY reflected the philanthropic philosophy of its founder. Although the priorities shifted somewhat during the tenures of different presidents, significant grants were made under each of them in support of research, education, and the cause of world peace. Major gifts were used to establish libraries and advance higher education in America, as well as to underwrite continuing and non-traditional educational programs.

1955-82: New Strategies under Presidents Gardner and Pifer

Starting in the 1950s, the relative size of CCNY's portfolio began to diminish as larger private foundations came into existence and the federal budget rapidly inflated, driven by both the Cold War arms race and welfare programs. The possibility that the corporation's influence and prestige might wane with this relative reduction in its endowment compelled its board to re-assess its grant-making strategies to achieve more leverage. Between 1955 and 1981, under presidents John Gardner and Alan Pifer, the corporation narrowed its concentration to selected areas in which its strategists believed it could make important, policy affecting differences. Among other things, CCNY began actively seeking partnerships with other agencies and foundations willing to promote innovative ideas and change.

The principal focus was on education. Gardner and the corporation foresaw the postwar wave of students that would strike at all educational levels, as veterans from both World War II and the Korean War returned home to develop occupational skills and raise their families. Under Gardner's leadership, CCNY worked to make sure that programs strove to achieve or maintain excellence in American education. For primary and secondary schools, the corporation advocated the removal of race and gender barriers to educational opportunities and sought methods of enhancing the special skills of all children. For colleges and universities--besides striving to achieve parity in educational opportunity--Gardner and his staff worked to foster international understanding by supporting special area studies programs and research, the findings of which could be transmitted to policy makers in Washington and other world capitals. During Gardner's tenure, there was a 'justified tendency to assume that ideas and innovations generated with Carnegie funds could and would be passed on to governmental authority.'

In 1965, Alan Pifer succeeded Gardner as the corporation's president. At the time, the country was reeling from a crosscurrent of divisive, implosive movements. This included anti-Vietnam War activism, assassinations, the pursuit of true racial equality, and the counter-culture movement. Pifer worked diligently to promote equal opportunity and social justice. Under Pifer's watch and through its grants and studies, the corporation supported educational research and training. It also underwrote programs and studies advocating social justice and equal opportunity for both racial minorities and women.

It was in Pifer's first year that CCNY established the Carnegie Commission on Educational Television, whose work helped achieve the passage of the 1967 Public Broadcasting Act. Among other things, that commission's study led to the corporation's establishment of the Children's Television Workshop, which--beginning with Sesame Street in the late 1960s--launched a series of quality educational programs for children. Thereafter, these were generously funded by the federal government, which, under the aegis of the Department of Education, also absorbed the National Assessment of Educational Progress, founded by the corporation in 1969.

1982-96: Hamburg's Presidency and CCNY's 'Preventive Orientation'

During the 1970s and 1980s, public concern with the national debt and the cost of welfare programs fueled a new conservatism that forced CCNY to reconsider the efficacy of the public-private partnerships it had sponsored in earlier decades. David Hamburg, a physician and research scientist, took on the presidency of CCNY in 1982. A public policy thinker with a background in public health, Hamburg somewhat altered the corporation's focus and method, using a 'preventive orientation' to problems. Among other things, the corporation undertook an assessment of the role played by science and technology in global conflict, thereby reviving international programs promoting world peace. Hamburg committed the foundation to that cause, first through the avoidance of nuclear war and, second, through fostering better relations between the United States and the Soviet Union.

Under Hamburg's watch, the foundation also underwrote new studies and programs dealing with educational reform and child and adolescent problems arising from such social realities as the changing structure of the American family. The corporation's series of task force reports all stressed the need for a stronger commitment to children's development and welfare--both by families and schools as well as by other institutions involved in shaping their lives, including the media and community organizations and services. Hamburg was also very concerned with the undesirable side effects of technological advance, including sophisticated weaponry, rampant urbanization, environmental damage, depletion of natural resources, and disease.

By 1984, when the foundation had $20 million to award in grants, it began investing much of it in four primary areas: the avoidance of nuclear war, education in America, the prevention of harm to children and young adolescents, and the promotion of better ways to improve life in developing countries. Fairly typical of Carnegie-funded study groups were the Carnegie Forum Task Force on Teaching as a Profession and the Council on Adolescent Development. In 1986, the Task Force on Teaching issued a report that painted a dismal picture of the state of education in America and offered some radical recommendations. Among these recommendations: the national certification of teachers, a national teacher-proficiency examination, a required master's degree for all new teachers, and major salary hikes in the profession. It concluded that public education in America was failing and in the process was gravely threatening the nation's future. The Council on Adolescent Development, formed in 1986, focused on teenage pregnancies, suicides, and drug, alcohol and tobacco use, hoping to find ways to reverse their alarming increase among post-adolescent Americans.

The Carnegie Corporation, often tarred with the brush of 'liberalism' by those who did not like its task forces' findings, had repeatedly tried to make legislators deal with pervasive problems that were eroding the quality of life in America or threatening world peace. Its approach was largely to recommend preventative measures, using the reports of commissions and study groups to outline necessary steps to solve the problems that reached crisis proportions.

For example, in 1994 while still under Hamburg's watch, CCNY issued a report entitled 'Starting Points: Meeting the Needs of Our Youngest Children.' The report argued that new, federally-funded welfare programs were needed to deal with the impact of poverty, abuse, and neglect on an appalling number of the nation's children. The report flew in the face of the decade's conventional wisdom, that government welfare was, in fact, a failed system. In any case, as a result of the study, in 1996 CCNY awarded two-year grants in excess of $3 million to sixteen states and cities participating in the new grants program--named Starting Points State and Community Partnerships for Young Children. It was designed to mobilize community action to help effect the reforms recommended in the 1994 report.

Also in 1994, CCNY established the Carnegie Commission on Preventing Deadly Conflict. The commission, co-chaired by Hamburg and former U.S. Secretary of State Cyrus R. Vance, issued a final report in December of 1997 which stressed that deadly conflicts between and within nations could be prevented through an early-warning system, expedient and effective reaction to crises, and a commitment to resolving the underlying causes of violence.

1997-2000: Vartan Gregorian's Presidency

In 1997, Vartan Gregorian succeeded Hamburg as president of CCNY, and the foundation's basic concentration remained in three program areas: the education and healthy development of children and youths; the prevention of violent conflict in the world; and the strengthening of human resources in developing countries. In his first presidential report, Gregorian expressed his 'deep concern' over some specific problems: racial and ethnic relations in the United States--particularly their impact on children; the state of scientific and educational institutes in the countries of the former Soviet Union; the impoverished condition of sub-Saharan African nations; and the impact of the Islamic faith on American society. It was thought that new initiatives could well arise from these concerns in the new millennium.

As the turn of another century neared and CCNY undertook and/or sponsored new programs, its old commitments remained intact, reflecting still the philanthropic interests of its founder. In June of 1999, the corporation awarded grants totaling $15 million to public libraries in 23 cities. The awards marked the centennial of Andrew Carnegie's 1899 $5.2 million gift to New York for the establishment of branch libraries throughout the city's five boroughs. Thus, even as it has mapped out new initiatives and programs, the foundation--Janus like--has kept its past in view.

Chronology

• Key Dates:

• 1911: Andrew Carnegie founds the Carnegie Corporation of New York.
• 1919: Andrew Carnegie dies and the foundation appoints its first salaried president.
• 1938: Corporation commissions Gunnar Myrdal to make study of the American Negro.
• 1955: John Gardner is named corporation president.
• 1965: Foundation establishes the Carnegie Commission on Educational Television; Alan Pifer becomes corporation president.
• 1982: David Hamburg assumes presidency of corporation.
• 1997: Vartan Gregorian succeeds Hamburg as president.