Efficiency in Making Bequests

AT the time when a civilized world was trying to decide how it ought to give away the Sage millions, a man in the throes of will-making wrote, — “Will you please send me the names of the most worthy charities in New York City, including hospitals ? ” Shortly before, a lawyer had inquired if a client’s property one hundred miles away could be used as a freshair home; a widow asked how $100 could perpetuate her husband’s interest in wornout tenement mothers; another how the savings of a trusted servant — $20,000 — could be invested in health for infants.

Have you ever worked out details of a plan for using the interest on $70,000,000 so as to help, not injure, its recipients? When you try to cure insomnia by imagining yourself under obligation to give away $1000 every morning, do you ever get beyond the tenth morning ? Then you know how great is the need of the prospective will-maker for don’ts, handbooks, and first helps. Volumes have been written to tell relief workers the danger of pauperizing needy families, begging letterwriters, and street, mendicants; not enough has been written to show the danger of pauperizing the charity worker, college president, hospital trustee, ladies’ auxiliary, board of aldermen, or posterity.

We have reached the point where it is generally believed that individual mendicancy cannot exist unless the applicant for relief is given that which harms and demoralizes instead of that which cures and elevates. More slowly are we coming to see that pauperism, whether in a man, a church, or a college, consists not in asking for aid on the street or from house to house, but in begging when one does not need, when one does not intend or is unable to use aid for the purpose advertised, or when one does not give back service proportioned to his receipts. Generous men and women persist in giving poison to sick men because their attention is focused on the giver or recipient instead of on the gift itself, and its history after leaving the giver. Likewise benefactors of institutions do not want to increase the sum total of unhappiness in the world. No mother wants to hurt orphans by her gift to an orphan asylum, or to abet neglect of unsanitary conditions by her hospital gifts. Even when testators give for the sake of the world’s applause they would undoubtedly prefer, if shown how, to avoid criticism for having endowed fraud or imposition, and thus having defeated their own purpose.

Because will-making starts with motive, some students fear that it must always be subject to caprice, therefore beyond help from efficiency tests. History has proved, however, that it is possible to attain efficient giving without attempting to improve upon the motives that seem most frequently to prompt public bequests: 1. Desire to perpetuate interest in a work or class of sufferers. 2. Desire to please a friend. 3. Desire to avoid post-mortem censure. 4. Desire to appear public-spirited. 5. Desire to establish a memorial for a relative. 6. Desire to do the fair thing by a society that protected the testator, and furnished opportunity for making his fortune. 7. Desire to help where suffering receives least attention. Whatever the motive, it is human and can be put to uses that will neither defeat the testator’s purpose nor put obstacles in the way of human progress. Efficient giving from a selfish motive may give more happiness and do less harm than inefficient giving from an altruistic motive. To pay out money for certain disappointment, to buy censure where one aimed to silence it, to carve a family name on a gold brick, is not efficient giving. In every community are scores of instances which show that giving may be sadly inefficient. Whether or not it is efficient depends upon what is done with the gift, rather than upon the motive and the confidence of the giver or the worthiness of the recipient. A few instances will show the importance of a testator’s desiring to know what will in all probability be done with his bequest.

A banker had heard so much from his family physician of the struggles and economies of a certain hospital that he determined to leave it $50,000 for a memorial wing. When the wing was finished it bore the tablet, In Memoriam, Mrs. Grateful Patient, — and added $55,000 to the hospital’s annual burdens. No corresponding addition was made to the number of friends willing to support it. In fact, several large donations were reduced because it was imagined that the relatives of Mrs. Grateful Patient would give handsomely. The friend in need who had patiently met all former deficits announced that he could not carry the larger load, and after the first year would give $2000 and no more. There was nothing for the managers to do but to face about and solicit the public subsidy that they believed inimical to private hospitals. The contributing public gradually fell off, mistakenly believing that the city supported the hospital. For ten years every legacy received has gone to meet deficits; wards are repeatedly closed for months for lack of funds; to increase revenue private patients are given all choice windows; a large floating debt is carried — a veritable Minotaur ready to swallow the next legacy and the next forever. For fear of losing its subsidy the hospital managers have declined to take any part in the fight against preventable epidemics due to official neglect.

A society once strong shows signs of age. Love of struggle has given way to love of ease. Work once fitted to a city’s need is now calculated to perpetuate that need. Organized to relieve suffering, it lives to-day for itself alone. A large endowment makes it unnecessary to raise more than one tenth of its support from the public. Two or three more large legacies will remove this necessity. The bequests come. Income is assured. The work is now nobody’s business but the Board of Managers’, whose contempt for the community injures every other charitable society, inhibits the desire to give, and retards the development of constructive social enterprise. It will not permit vaccination, for it is stocked with lances for bloodletting. It refuses to learn bacteriology, for is it not death on fits ?

A college was started to hold high the banner of Methodism in a western state. Inscriptions show that all of the money came from the East, where the president has spent most of his time. It is hardly worth while trying to get support from the Western country which benefits from his college; why bother with hundred-dollar gifts when some mourning parent in Springfield or Boston will give $10,000 or more? The college has never acclimated itself. The Western Methodists are pauperized, and their children educated with equipment and educational talent inferior to that of the indigenous state university.

Each of the instances cited can be multiplied almost indefinitely. In each the work that testators wished to further has been injured by their gifts. Instead of aid, the three beneficiaries received respectively impoverishment, gout, and pauperization. In emphasizing this fact there is here no intention whatever to criticise the will-makers, but merely to point out that they did not gel their money’s worth.

Three other instances illustrate the method that leads to efficient giving: Four years ago a retired manufacturer asked the president of his state Board of Health, what kind of help the very poor needed most. Numerous suggestions were made, including the need for leadership in a popular crusade against consumption. Without disclosing his own identity, the possible giver communicated for over one year with a physician thought to be eminently qualified to organize such a crusade. A hundred units of inquiry were found, — extent of the need, various methods of fighting tuberculosis, world evidence of successful treatment, a detailed plan of procedure, with estimates as to expense of publication, laboratories, dispensaries, administration. Had a steel mill been involved instead of a health crusade, the procedure could not have been more businesslike than that which gave the world the Phipps Institute for the Study and Prevention of Tuberculosis.

In May, 1906, Mr. Rockefeller sought from several social workers suggestions as to the use of certain vacant property overlooking the East River adjoining the Rockefeller Institute for Medical Research. Playgrounds were the first thought of several. Another mentioned three needs. 1. Farm gardens for crippled children, river breezes on the bluff for those not able to move about; 2. Day nursery; 3. Out-of-door fresh-air camp for very sick “summer complaint” babies and their mothers.

“Which will have the greatest educational results?”

“The camp demonstration that mothers can save their own babies in their own tenement homes if they will give them clean milk, clean air and clean bodies.” An itemized estimate was required of cost, method of treating, teaching, and results to be expected. Inside of six weeks Junior Sea Breeze was opened, and throughout the summer led the fight against preventable infant mortality, giving 2050 days’ care to 156 babies, 14,389 days’ entertainment and instruction to an average of 232 tenement mothers and children, and suggestions for application elsewhere for 274 babies. It was visited by 1025 social workers and physicians.

The widow who wanted to establish a $100 memorial considered a score of means before finally purchasing two strong invalid revolving chairs. Forty mothers every summer will have ten days at the seashore, moving about among the hundreds of guests who are the living memorial of her husband’s interest in Sea Breeze. Her method was as commendable as that of the two millionaires, not because she had a mite, but because she spent it efficiently.

Efficiency in will-making is obviously more difficult than efficiency in making ante-mortem gifts. It is conceivable, for instance, that three wills drawn within the last four years provided for an educational crusade against tuberculosis, a first babies’ camp in the heart of New York City’s tenement district, and two rolling chairs for Sea Breeze. If so, the bequests, when available, would be duplicating effort already made, and would in no case fulfill the purpose of the testator. Most wills involving large gifts for public purposes are made when the giver hopes, even if he does not expect, to live many years. Under these circumstances an unelastic plan may, if executed, prove the maximum of inefficiency. Why, then, attempt to fit future resources to present needs ? Is it not wiser to trust the spending of the legacy without condition to those whom the testator knows and likes ? That depends upon the practice of the individual or agency one aims to help. If the amount of the gift is small, the possible evil that might result from inefficient giving may be so small as to be safely ignored; but if the amount is large enough to change the current of the beneficiary’s life, the efficient testator will give in a way that will in all likelihood increase, not decrease, the beneficiary’s welfare. The father who wants to keep his fortune in the family, ought to be able to give in such a way that the family will not promptly deprive itself of that fortune ; a mother who loves her son so dearly that she cannot disinherit him, ought to be able to avoid encouraging him to disinherit and outlaw himself; a contributor wishing to continue indefinitely his annual gift of $500 to a trade school, ought to be able to prevent a legacy of $12,500 being swallowed the first year by deficit. The injunction, “Do not look a gift horse in the mouth" does not apply to givers.

What a charitable or educational agency will probably do with bequests can be discovered. If its current receipts are regularly below its current expenses there is every reason to believe that a legacy will be used, all at once or gradually, to meet the deficit, unless the interest on the bequest is sufficient to fill in the gap. If deficits are the exception rather than the rule, it is important to learn how former legacies were used: whether for sumptuous offices, Indian festivals during seasons of surplus, much needed additions to equipment, improvements in standards of service, experiments of vast consequence, or merely piling up a sterile surplus. It is probable that future legacies that impose no obligation on the recipient will be treated like the unrestricted legacies of the past. If the efficient willmaker decides that he prefers to share for all time in a society’s work, he may stipulate that the principal shall remain intact, the interest only to be used. This often acts like a total abstinence pledge, a reminder in time of weakness of one’s past intention when not under temptation. The efficient giver will impose no condition on the use of the interest beyond possibly a period of five or twenty-five years, during which he may reasonably expect that conditions will not have so changed as to make the stipulated work unnecessary. No efficient giver will subsidize a demand for distress, putting bounties on wolf-scalps when all wolves have been exterminated except those especially reared to earn the bounty.

Feeling that most testators have a desire, however vague, to perpetuate their coöperation, some societies provide in by-laws that all legacies, even when unrestricted, shall be placed at once in a reserve or endowment fund. Thus sometimes an unrestricted legacy becomes a restricted legacy by act of the beneficiary society; for example, the James C. Carter Fund, the interest to be used in promoting some distinctly civic effort, such as securing adequate milk inspection, or proper administration of public baths. The floating or unrestricted fund known as endowment or reserve, made up of legacies or fragments of legacies received during twenty or fifty years, is safer when reserved for emergencies only and protected by by-laws as well as by tradition against hasty action. If a month’s notice be required to draw upon the reserve fund other means will often be found of meeting what at first seemed an emergency. If after due consideration an emergency still confronts the society, or an exceptional opportunity to invest a legacy in the kind of happiness the testator wanted his gift to provide, many societies use their reserve. Relief societies, for example, often believe that their deceased benefactors would not wish them to refuse to relieve families in urgent need so long as there is one dollar of the unconditioned legacies left. Many hospitals would feel it an affront to the memory of their benefactors to put surplus revenue in the bank instead of into the fight against conditions that cause sickness and deplete vitality.

Conditioned or restricted legacies are in disfavor with many trustees. To them it seems inconsistent, to be interested enough in a college to leave it $250,000 and at the same time to distrust its ability to spend the money when and where most needed. But it happens that large gifts are quite as apt to be due to regard for the college name or its past management as for its present directors. It is definite tradition, not an uncertain future, that the alumnus wishes to endow. He intrusts interest only, restricting and perpetuating the principal, not because he lacks confidence in the trustees, but because he would rather give a ninetynine year lease than a quit-claim deed. Many of us subscribe to a magazine we do not wish to buy outright, and trust a broker to buy stocks selected by us when we would not trust him to select the stock itself. Opposed as they are to gifts with a string tied to them, trustees generally manage to be sincerely grateful for annuities, but they respectfully petition you not to tie the annuity to any purpose that is not capable of re-definition as time may change needs and resources for meeting needs. A serviceable qualifying clause for restricted bequests would be, — “Whenever the need herein provided for shall have disappeared, or when responsibility for meeting it may be placed on some other agency better equipped to meet it, the annuity may be used for educational purposes in connection with the work conducted at that time by the beneficiary.”

Because true affection for a society’s name and work accounts for most bequests for public purposes, testators will continue to leave the spending of both interest and principal to the judgment of beneficiaries. Men and women who have themselves as trustees suffered the torments of uncertain income will continue to feel that they qualify their generosity by restricting a legacy, — too much like inviting a private detective to oversee a lunch party. Such loyal friends may safeguard their bequests and the traditions they love against the aggressive, moneyspending minority known to be on every board, by asking that for ten, twentyfive, or fifty years the disposition of the capital be explained to friends of the society in successive annual reports. For example: —

C. C. Smith Memorial Fund, — $50,000 — 1885; intact. Interest used for five Smith Fellowships.

Mary J. Walker Legacy, — $152,500 — 1903; $100,000 remaining in General Endowment. $50,000 consumed in spreading broadcast the knowledge that bone tuberculosis is due to consumption; that it can be prevented; that it can be cured by out-of-door salt air treatment. Fund of $250,000 raised for the first American Seaside Hospital presented to New York City in 1907.

William Anderson Legacy, — $75,000; consumed for office building, 1903, that produces no revenue.

Helen Pullman Legacy, — $300,000; consumed for office building, 1903.

Legacies AM, aggregating $37,800; consumed to meet annual deficits.

Legacies NV, — $50,000; used for dressing room.

James Read Legacy, — $1000 ; used for portrait of giver.

In Memoriam N. D. $100,000 ; half consumed to erect laboratory; $50,000 invested; interest used in publishing facts as to preventable infant mortality.

In addition to the moral support such a restriction would give the trustees in time of need, is the incalculable advantage of compelling a policy of complete frankness between the board of managers and the solicited, prospective will-maker.

The road to efficiency in will-making is smoother when one has not yet made up his mind just what societies to help, and has no personal reasons for making the efficiency test seem out of place. Then most men will be grateful for fair answers to the one definite question in their minds,—“What are the worthy charities?” Unless we break that question up into parts, or unless their lawyer or consulting expert “factors” it, the Goodness Fallacy and Inefficiency will make most wills, and other soup kitchens or bread lines will be started where testators hoped to encourage industry. There is an ever-increasing class of men and women able to make large bequests, and willing to make them if shown how. Accustomed to apply the effectiveness test to investments during life, they come to believe sincerely with Professor Sumner that “the next most pernicious thing to vice is charity in its broad sense.”They distrust emotional appeals. They wish to picture to themselves the probable results of their giving, and may be pardoned for preferring something distinctive, expressive of their personality, or at least assurance that their message shall not be misinterpreted, and that no business principle shall be violated. They have a right to expect that societies seeking their coöperation will welcome businesslike questions necessary to insure efficiency in giving. More givers of this class would undoubtedly be forthcoming if societies would anticipate questions, forecast the needs in their own fields, and persistently offer opportunity to buyers.

What then does a business man mean by worthy charity ? Among other things he means that which is worth while, not superfluous, well-managed, efficient, an investment that pays no less than the current rate of interest, and declares an occasional special dividend. Besides its practice with regard to endowment, he desires to know — although he may not be familiar enough with details to formulate questions — the extent to which the charity recognizes the partnership of its contributors and the public; whether it studies and learns from its own experience; whether it gladly modifies its policy and technique to fit changing needs; what portion of the community’s work it does; whether it can easily be spared : its relative efficiency as compared with other charities doing the same work; what needs its plans for the future disclose. To answer these questions requires study, it is true. Here is a place for the business doctor, or for the prospective giver or his lawyer to turn diagnostician. It rests with societies that pray for bequests to accustom prospective willmakers to demand statements of fact, rather than expressions of personal preference, from those asked for advice. What graft is more reprehensible than that of educational and other benevolent agencies which use a lawyer’s influence, rather than his intelligence or their own facts, to get bequests ?

In default of reports and diagnosticians the following suggestions may be of service in making bequests for amounts small or large : —

1. Unless one cares, — can give himself with his gift, — leave it to the public treasury, where it will probably do less harm than if left to charity or education.

2. If one cares, let him make sure that his gift will relieve, not increase, a burden. Do not give an elephant to a peasant, or an automobile to a push-cart merchant.

3. Insert no inelastic condition.

4. If temporary restrictions are to be imposed, give to the least popular or less popular rather than the most popular aspect of the beneficiaries’ work. A relief society needs its need for coal quite as much as the coal; to relieve it of the need and the need’s appealing power may reduce its total contributions by many times the value of the coal.

5. To specify of a legacy that its income shall not be used for salaries or other expenses of management may invite waste and inefficiency. It requires money to spend money efficiently.

6. To give specifically for salaries and management will often convert an inefficient into an efficient society, and enable it to increase the community’s interest in its work; many societies fail for want of a hearing.

7. Accompany unrestricted legacies by a request for an annual accounting for the principal, through the first ten, twenty-five, or fifty years.

8. No society should be encouraged to prefer a surplus to service rendered. A work deficit is infinitely more dangerous and discreditable than a fiscal deficit.

9. The presumption is strongly in favor of a society’s dependence upon the public for the major portion of its support. Do not debauch posterity or send a fatted calf to a prodigal son.

10. Endowed brains can readily be adapted to changing needs; brick and mortar cannot.

The large giving of recent, years has sought educational opportunities. If the Carnegie libraries seem an exception, it must be remembered that each library is given on condition that books shall be forever accessible. Our universities and colleges are adding to equipment and endowment by leaps and bounds. In this prosperity charitable agencies have not participated largely, owing to the double conviction that, the most efficient giving is for education, and that charitable work and education are mutually exclusive. An agency that is not called a school, college, or university, is not considered educational. The man who teaches outside of school walls is not called an educator. From this confusion of means with purpose it happens that the educational value of teaching done by civic, charitable, and religious organizations is not properly recognized. The new interest awakened by their teaching redounds, not to their own financial benefit, but to that of schools and colleges. As a matter of fact, much work done by colleges and schools is not educational and is charity. Too frequently research finds out nothing and schooling fails to educate, while the charity budgets, including free scholarships not earned but given, of Harvard, Pennsylvania, Vassar, and Smith, are larger than that of any relief society in New York City. The student whose wealthy father pays $150 for instruction that costs $500 is no less an object of charity than a woman who is paid $2 in a relief bureau for making a garment worth only $1; the mother who does that sewing is taking part in an educational process just as truly as is the college student.

The times call for endowments, not of things and names of things, whether charity, hospital, or college, but of truth.

Whatever the name of its beneficiary, no endowment can be truly educational that does not perpetually facilitate the application of truth to man’s environment, in order that obstacles to human happiness shall progressively decrease, and opportunity for development toward happiness progressively increase. Of what avail to care for a few hundred infants at the seashore, if we are to send them back to an unclean milk supply that causes the death of thousands during the summer months. One bequest recently received by a hospital that is known to have a large surplus income might have established a fund for loans on personal credit or wages, or the after treatment of hospital patients, or financed the national crusades against tuberculosis and child labor or child neglect for one whole year. To correct the evils of ignorance, bad business judgment, and disregard of the rights of tenants to healthful and decent surroundings, the facts learned by one efficient tenement house inspector, properly used, would accomplish more than a block of model tenements. Proper use is incompatible with burying such important facts as “at the present rate it will be over eighty-six years before the work of lighting the interior rooms is completed.”One thousand dollars spent in proving the need for official attention to the physical welfare of school children will pay larger dividends than $1,000,000 spent in a child’s hospital. From $350 to $500 per school-child is spent during the years from seven to fourteen because we believe in universal education; from the years fourteen to seventy universal education is left to chance, sensationalism, and methods antagonistic to or incompatible with true education and efficient citizenship.

Efficient citizenship, which is, after all, what college presidents and editors mean when they talk of good citizenship, is not possible without more information than we have to-day. To subsidize instruction in good citizenship and in civilization will accomplish less at this particular time than to subsidize research for facts registering the efficiency of our present civilization. Large endowments are needed to analyze budgets and to advertise community needs, establish fact centres for every group desiring to make to-morrow better than to-day.

A great service would be rendered if some philanthropist, seeking to crystalize our best analysis of past experience, should offer prizes for the best plan for using endowments of fifty thousand, five hundred thousand, and five million. These prizes should be large enough to entice the most capable students, and numerous enough to interest every city and every state. At least one prize should go to every state, for a plan best fitting local and state needs. Two or three or five general prizes might be given for papers superior in principle, as well as in technique of presentation. When local, state, and national needs are placed under observation and criticism, we shall not be so unprepared to dispose efficiently of large and small endowments as we seem to be at present.