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Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our Economic Well-Being Hardcover – February 24, 2013
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"In The Gospel of Wealth (1889), Andrew Carnegie urged his prosperous contemporaries to avoid 'hoarding great sums' and to give their 'surplus' wealth away during their lifetimes, to strengthen an economic system that might thereby produce some riches for all. In the more measured tones of an economist, Mr. Acs is making much the same point: A capitalist economy not only enables but requires philanthropy. Through it, entrepreneurs can support the kinds of institutions that generate discoveries and that provide pathways for other people to make their own fortunes."--Leslie Lenkowsky, Wall Street Journal
"While philanthropy is generally seen as a positive practice, few view it as a sustaining capitalistic force that drives the economy. Acs seeks to change this in an informative and enlightening . . . look at philanthropy's many positive repercussions. . . . Economists will find this book helpful in crystallizing the long-term impact of philanthropy and the degree to which it influences the American economy."--Publishers Weekly
"Acs' effort to link philanthropy to greater income equality, opportunity and security is admirable and potentially important."--Glenn C. Altschuler, Tulsa World
"The best pro-philanthropy book I know."--Tyler Cowen, Marginal Revolution
"Drawing on research conducted over 30-plus years, Acs's examination documents historically how philanthropy has affected and been affected by the entrepreneurial spirit unique to the American economic system. . . . This is a worthwhile read for U.S. economists as well as those wishing to understand how American-style capitalism and philanthropy create innovation."--Elizabeth Nelson, Library Journal
"Acs develops an interesting account of American economic history as he traces the activities of philanthropists across the decades."--Kirkus Reviews
"Acs' major achievement here is to understand philanthropy's oft-neglected and uniquely American role in economic growth."--Evan Sparks, Philanthropy Magazine
"[E]asily the best work on the subject I have read."--Luke Johnson, Financial Times
"The book is fast paced and highly readable."--Kathi Coon Badertscher, Enterprise & Society
"Acs offers a well-written, well-researched account of the evolution of American capitalism."--Choice
"Why Philanthropy Matters is a useful book, appropriate to academics and an informed general readership as well as in undergraduate and graduate seminar-style classrooms (I myself am requiring it in a masters-level seminar this semester). . . . [I]t raises timely issues about the American economy, in particular the nexus of capitalism and philanthropy in America."--Gordon E. Shockley, Independent Review
From the Back Cover
"This marvelous and insightful book provides, to my knowledge, the first link between the philanthropist and economic performance. Exceptionally original and a pleasure to read, it will induce many scholars and policymakers to reconsider the way they think about the economy and the important role played by philanthropy."--David B. Audretsch, Indiana University
"Why Philanthropy Matters argues that philanthropy is the institutional element that enables the creation of great wealth and the recycling of that wealth across generations. With timely and well-grounded arguments, this breakthrough book offers a new vision of philanthropy's place in American economic thought."--Roger R. Stough, George Mason University
"This thought-provoking book provides a deeper understanding of how the market-based capitalist system works and how it has helped to increase societal prosperity. Acs puts the role of the philanthropist in historical and institutional context, and his insights will be of considerable interest to a broad audience."--Pontus Braunerhjelm, Royal Institute of Technology
Top Customer Reviews
The book is well organized into seven chapters. It begins with "A Conversation" about The Giving Pledge that was initiated by Bill & Melinda Gates and Warren Buffet and supported by several of the super wealthy in America. The book includes many examples of the 91 pledge letters after the Epilogue. Many in the general public view it as a self-promotion stunt and a few foreign billionaires attacked the effort as socialism and "a bad transfer of power from state to billionaires" (Der Spiegel magazine) and that "Charity does't solve anything". The following chapters lay out the long history of generosity of American entrepreneurs such as Benjamin Franklin and Andrew Carnegie "He who dies rich dies in disgrace". Chapters are focused on opportunity, innovation & entrepreneurship, the creation of wealth and finally, philanthropy; all virtues of capitalism that "lead to "a better society in the long run". In the last two chapters, Acs compares (the superiority of) American-style capitalism and philanthropy to the rest of the world, and in the Epilogue he outlines tax reform that recompense "investments to benefit society" with emphasis on the estate tax but ignores the deduction for charitable donations.Read more ›
However in a pluralistic liberal democracy the rising income inequality is a real issue. It is because inequality has the potential to undermine democracy as the wealthy increasingly find ways to "buy" elections on the one hand and to maintain economic and political power on the other. We are witnessing this today right in front of our eyes. However, what is really at issue here is not that wealth and income are concentrated but that the concentration undermines capitalism as rent seeking replaces entrepreneurial activity and innovation. Picketty's answer to the dilema of having r grow faster then g was inadequate and all know it. However that does not underestimate the underlying problem of what to do about it because it is not sustainable.
"Why Philanthropy Matters" offers an answer to the Picketty puzzle and it in in pat an American answer. America has faced this question and debated it for 300 years. America wanted rich people but it did not want a class structure. In other words we wanted to become rich but we did not want to see wealth stay in the same hands. So America invented philanthropy. Philanthropy is the solution to the Picketty conundrum of r being greater then g. Philanthropy does two things. First, it recsonstitutes wealth and second it creates opportunity for others by investing in education, universities and research that increases growth.Read more ›
It's obvious that entrepreneurship is about creating value for others THEN get paid. This focusing of the term "philanthropy" as creating value (versus "charity" as giving value) is really important, Sometimes simple truths are.
We are seeing disruption in social investing that has already spilled over into investment in general. David Chen of Equilibrium Capital calls it the third wave. First was seeking social return as a tradeoff with economic returns; next we sought blended returns... but the third wave is finding economic returns FROM social returns. We are starting to get there. Philanthropy has become the Big Picture driving force. At a recent NYU Satter conference on social entrepreneurship, we heard a series of social investors telling us that they now expected serious social returns that also drove economic return.
Zoltan's book is a nice look at what in 2020 we'll look back and see as one of THE trends influencing society. He puts some solid intellectual "wheels" under this.
p.s. and it just might also stimulate some ferocious debates :)