In income-taxless 1901, Andrew Carnegie sold his vast steel empire to J. P.
Morgan for $492 million. At the close of that huge deal, which formed the core of the new U.S. Steel Corporation, the beaming banker extended his hand and uttered the ultimate praise of the day: "Mr. Carnegie, I want to congratulate you on being the richest man in the world." What few men knew about "the greediest little gentleman ever created," as one biographer called Carnegie, was his inward conflict over wealth. He fretfully condemned the worship of money as "one of the worst species of idolatry," and in 1889 he wrote that "the man who dies rich dies disgraced." Before his own death in 1919, Carnegie gave away 90% of his money.
Carnegie handed out money furiously, but by 1911 still had more than $150 million left. So he launched the Carnegie Corporation of New York, the first and then biggest ($125 million) "general purpose" foundation. This week the corporation issued a 50-year report of giving (total: $303.9 million) that reveals how one rich man with a conscience can profoundly enrich generations unborn.
Medals & Music. Carnegie's pre-corporation giveaway was staggering. He lavished cash on Scotland's four universities and his native town of Dunfermline. He pensioned off everyone, from railroad clerks and Civil War telegraphers to a couple of maiden ladies with whom he had once danced.
Picking up speed, he built 2,509 public libraries costing $43 million.
He founded Pittsburgh's Carnegie Institute, which spun off the Carnegie Institute of Technology, and Washington's Carnegie Institution, which started California's Mount Wilson Observatory. He threw in Manhattan's Carnegie Hall, the Hague Peace Palace, Washington's Pan American Building, and the Carnegie Endowment for International Peace.
An instance of the impact was the Carnegie Foundation for the Advancement of Teaching (1905). In setting up free pensions for professors in the U.S. and Canada, the foundation had to define a "college," which in turn meant defining "high school." Result: the "Carnegie Unit"—the 120 hours per year that U.S. high schools now accept as standard for each subject. The foundation went on to organize the Teachers Insurance and Annuity Association (120,000 current policy-holders), a pioneer among U.S. annuity plans. Most important, the foundation financed the famed 1910 Flexner report criticizing medical schools in the U.S. and Canada, which in turn unlocked the Rockefeller millions that revamped medical education.
Unleashing Talents. Taking its cue from Flexner, the Carnegie Corporation itself has long specialized in supporting the one inexpensive study that rouses others to give on a grand scale. Today this is partly by necessity. Carnegie is a powerhouse among U.S. foundations, which now total 12,000. But in market value of its assets ($286.6 million), it runs a poor fifth to the top four: Hartford and Duke (each with more than $400 million). Rockefeller ($615 million) and the colossal Ford Foundation ($2.5 billion). Last fiscal year alone, Ford earmarked $155.7 million for new grants, as against Carnegie's $12.8 million.