For the past 15 years, I have been involved with philanthropy in America—as a philanthropic advisor to donors, as a social entrepreneur, a nonprofit leader, and advisor to leaders of faith-based organizations that serve the homeless, prisoners, recovering addicts, and at-risk children. I also collaborated with the efforts of the Bush Administration’s Faith-Based Initiative.
In a previous phase of my life, I had the honor of being appointed by President Ronald Reagan to serve in The White House in the Office of Public Liaison, where I was responsible for the White House briefings on the economic program for the business community. From that vantage point, I got a bird’s eye view of the Administration’s efforts to revitalize the America’s public and private sectors. I was in the thick of it, putting on briefings day in and day out, with cabinet secretaries and their deputies as spokesmen, as well as key White House staff. In the first year everybody wanted to meet with the President—and everybody had an agenda, as we discovered.
Ronald Reagan came to the presidency with a body of knowledge and convictions honed during his years as a spokesman for General Electric, where he gave hundreds of talks on all manner of subjects, long before he entered the political arena. He had a deep and abiding faith in the prudence and wisdom of people at the grass roots level to manage their own lives well, if left free from government intrusion. We know a lot of his thoughts from the handwritten commentaries he wrote in preparation for his radio broadcasts in the 1970s, published in the book: Reagan In His Own Hand. For his critics who claimed he was a “great communicator” because Peggy Noonan and others put great words in his mouth, this book is a rebuke. These are vintage Reagan talks—all written in his longhand—and they tell us a lot about the contours of the heart and mind of Ronald Reagan long before he became president.
In one of these broadcasts in 1977, he tells the story of Alexis de Tocqueville who came to America in the 1830s to try to understand what makes the nation great. Tocqueville discovered that it wasn’t America’s ample rivers or her vast commerce that made her great, but her goodness and her ingenuity. Reagan loved what Tocqueville discovered as one of the greatest strengths of American citizens: the ability to solve problems themselves. Reagan said in his broadcast, Tocqueville “told his countrymen how in America a citizen would see a problem that needed solving; that he wouldn’t call on the government but would cross the street and talk to a neighbor. They would talk to others and soon a committee would be formed, the problem would be solved and,” as Reagan relates the story,” Tocqueville said, ‘You won’t believe this but no government bureau will be involved at all.’”
What Tocqueville grasped, and what Reagan knew from his own experience, is that Americans have remarkable good will, generosity and ingenuity in caring for one another’s needs.
In the famous passage Reagan references from Democracy in America, Tocqueville marvels at the sweep of intellectual, moral, religious and social activity:
“Americans of all ages, all stations in life, and all types of dispositions are forever forming associations. There are not only commercial and industrial associations in which all take part, but others of a thousand different types – religious, moral, serious, futile, very general and very limited, immensely large and very minute. Americans combine to give fetes, found seminaries, build churches, distribute books, and send missionaries to the antipodes. Hospitals, prisons and schools take shape in that way….In every case, at the head of any new undertaking, where in France you would find the government or in England some territorial magnate, in the United States you are sure to find an association.” 
The thing Ronald Reagan liked best about this story is that the people didn’t go to the government for a solution. They stepped up to create a solution themselves. And they did it in the private sector.
In President Reagan’s inaugural address in 1981—and I was there when he gave it—he said “It is not my intention to do away with government. It is, rather, to make it work—work with us, not over us; to stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.”
He went on to say “We shall reflect the compassion that is so much a part of your makeup. How can we love our country and not love our countrymen, and loving them, not reach out a hand when they fall, heal them when they are sick and provide opportunities to make them self-sufficient so they will be equal in fact and not just in theory?”
President Reagan meant that—and he was a genuinely compassionate man himself. But as he explained later that same year to the National Alliance of Business: “The size of the federal budget is not an appropriate barometer of social conscience or charitable concern.” (Oct. 5, 1981)
With that statement, Ronald Reagan drew the line in the sand that constitutes the Great Divide. This is where conservatives and liberals part ways. Is the government an appropriate venue for compassion and charity or not? Reagan’s answer was no. He believed the private sector does a better job.
President Reagan was never convinced that the government best understood the needs of individuals, and he was firmly convinced that nonprofit groups should be less dependent on government grants so they could be free to pursue their own visions and strategies. In his words, “We who live in free market societies believe that growth prosperity and ultimately human fulfillment, are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefitting from their success—only then can society remain economically alive, dynamic, progressive, and free. Trust the people.”
He believed that the people in their own communities had better solutions caring for their neighbors in distress. He trusted their compassion as well as their prudence in serving people face-to-face—people whose names they knew, and whose problems they could help them solve in the context of a relationship.
That’s something Washington can’t do.
President Reagan’s economic plan was to reduce tax rates, reduce the rate of growth of the money supply, reduce unnecessary regulations and cut spending. I gave months of briefings on that four-point plan. He was able to do all of those things except cut as much spending as he wanted—Congress had other priorities—and the battle was not pretty. I experienced the wisdom of Otto von Bismarck when he said if you have any respect for law or sausages, you should never see them being made. It was messy.
As President Reagan sought to cut government programs, he looked to private nonprofits to take on some of the responsibilities. The President appointed a Task Force on Private Sector Initiatives, headed by William Verity, a steel executive and corporate philanthropist. They were to find ways to transfer responsibilities from federal agencies to nonprofits and reduce impediments for charities as they served the common good. What President Reagan did instead of redistributing tax dollars was to revitalize the economy and unleash a period of sustained economic growth, which in turn fostered more charitable giving.
The policy changes paid off. As we came “out of the 81-82 recession, the nation had five straight quarters of 7-9% GDP growth and six years of strong, sustained prosperity,” as former Secretary of Labor Elaine Chao recently wrote in the Wall Street Journal. By making a 24% reduction in marginal tax rates, the economy was unshackled in the private sector.
As the economy flourished, so did philanthropy. “In the Reagan years, charitable giving rose by more than 25 percent in inflation-adjusted dollars, twice the rate of the previous decade.” New foundations sprang up “and corporate giving as a percentage of pretax profits, reached an all time high,” as Les Lenkowsky has pointed out. The effect continued after Reagan left office. “In the 1990s, tax rates…remained below their pre-Reagan levels, and philanthropy grew even more rapidly as the economy picked up speed.” 
Although the 1980s were slammed as the “decade of greed,” the annual rate of growth in total charitable giving in the 1980s was nearly 55 per cent higher than in the previous 25 years, according to Richard McKenzie. As he wrote, “No matter how the records of giving is measured, the 1980s were in fact a decade of renewed charity and generosity.” 
By their fruits you can tell the difference between conservatives and liberals, when it comes to charitable giving. President Reagan was called heartless, but he took it upon himself to give charitably, at the same time as he was cutting government spending. Although he was not a wealthy man when he became president, he donated more than four times as much to charity—both in actual amounts and as a percentage—than Senator Ted Kennedy. (Kennedy, whose net worth was $8 million, gave barely 1 percent.) Reagan gave more to charities than Franklin Delano Roosevelt, who is hailed as the great man of compassion. In the midst of the Depression, when people really could have used the help, Roosevelt gave only 2 percent of his income. In 1985, Reagan gave away 6 percent of his income.
The patterns of giving in America are fascinating. Arthur Brooks wrote a book a few years ago that I reviewed for Philanthropy magazine, called Who Really Cares? Brooks is a consummate number cruncher and did not believe the results when they came out, so he ran them again. He had assumed that people who are the most vociferous about socioeconomic inequality would give the most to alleviate it. He discovered that despite their reputation as “caring,” political liberals give less of their income to charitable causes than conservatives.
Actually, conservative households donate 30 percent more money to charity than liberal households. What’s more, they are also more likely to volunteer to take care of the poor themselves. Why the difference? Brooks found that liberals view government redistribution as a “form of charity,” which they believe exonerates them from further giving.
It is possible to shame liberals into giving, however, using the spotlight. Presidential candidate Al Gore was embarrassed by the release of his tax return that indicated he had given only $353 (or ZERO POINT TWO) percent of his income to charity. His giving jumped to 6.8 percent the following year. Just for the record, President Obama gives about 1 percent to charity. George W. Bush regularly gives more than 10 percent. Dick Cheney in 2005 gave away 77% of his income to charity.
Arthur Brooks found in his research that the most generous donors have four key traits: religious faith, skepticism about the government in economic life, strong families, and personal entrepreneurism. Where these converge, dollars flow toward charity. The faith factor is far and away the greatest indicator for charitable giving.
Brooks also discovered one disturbing trend: government funding to nonprofits crowds out private giving. Brooks writes that “numerous studies have demonstrated that a dollar in government spending on nonprofit activities displaces up to 50 cents in private giving,” and the “highest level of crowding out occurs in assistance to the poor and other kinds of social welfare services.” Brooks found that FDR’s New Deal put a 30 percent dent in church-based giving in the 1930’s, just as TANF welfare payments 60 years later crowded out private dollars.
President Reagan’s strategy to invigorate the economy and move more human care to the private sector was an economically effective one. But there’s another aspect of this shift that goes beyond the numbers. Tocqueville discovered something else about America that Ronald Reagan also understood. As people give their own time and money, it encourages people toward virtue. Tocqueville said, “its discipline shapes a lot of orderly, temperate, moderate, careful, and self-controlled citizens. If it does not lead the will directly to virtue, it establishes habits which unconsciously turn it that way.” This is the acquisition of civic virtue. In caring for one another voluntarily, Americans foster their own character development.
Tocqueville dubbed these little units of interaction “voluntary associations.” He wrote in the tradition of Edmund Burke, who called them “little platoons.” Others today call this sector “civil society.” It is expressed in all the many ways people come together freely, in families, neighborhoods, schools, clubs, and communities. Burke and Tocqueville agreed that human beings interact best with each other when they engage in small civic units. To love mankind is abstract, but you can love particular people.
Tocqueville saw that this voluntary, charitable activity counterbalances a competing tendency in the American character—the tendency toward self-absorption, toward materialism, and the tendency to isolate one’s self in a little circle of family and friends and leave the rest of society to look after itself. Tocqueville said as long as the impulse to give and serve balances out these tendencies, America can remain healthy. But if the charitable tendency that fosters virtue is overcome by egoism, materialism and indifference, the soul of the nation is in peril.
Tocqueville’s words have proven prophetic for our 21st century American culture. The balance has tipped, and the health of our nation’s soul is hanging in the balance.
It is an odd paradox, but the success of America depends on these private virtues, and the theological truths that shape them, for its very existence. But it is outside the realm of the government to provide character formation that is necessary for the survival of the republic. The private virtue necessary for the survival of the public and civic order must be shaped in the private realm. Virtue depends on faith for its sustenance, and it is learned in families, in churches, in parochial schools, in the armies of compassion, and in the little platoons of street saints. And they depend on philanthropy to accomplish their mission. Ronald Reagan always believed in America as a shining city on a hill. And his faith in the potential for inherent goodness of Americans was unshakeable. In his speech to the Republican National Convention in 1984, he said, “The poet called Miss Liberty’s torch ‘the lamp beside the golden door.’ Well, that was the entrance to America, and it still is….The glistening hope of that lamp is still ours. Every promise, every opportunity, is still golden in this land. And through that golden door our children can walk into tomorrow with the knowledge that no one can be denied the promise that is America. Her heart is full; her torch is still golden, her future bright. She has arms big enough to comfort and strong enough to support, for the strength in her arms is the strength of her people. She will carry on …unafraid, unashamed, and unsurpassed. In this springtime of hope, some lights seem eternal. America’s is.”
Maybe it’s because of Ronald Reagan’s vision that despite everything, I can see glimmerings of hope on the streets of our inner cities. Something is stirring the hearts of people who converge here to serve. Republicans and Democrats are rolling up their sleeves together to renew bullet-pocked neighborhoods. Social entrepreneurs are pairing up with business entrepreneurs to tackle stubborn social maladies. African- Americans and Anglos, Latinos and Asians, Baptists and Jews, Pentecostals, Presbyterians and Roman Catholics are discovering that what unites us transcends our differences. Passion and conviction are bringing people together to restore dignity to shattered lives. We share hope, and even love. The needs are great, the time is now, and we need to do this together. The spark of greatness is still an ember in America’s soul, waiting to be re-ignited. We need an heir to Reagan to light the blaze.
Books mentioned in this essay may be found in The Imaginative Conservative Bookstore. This essay is based on a lecture given by Barbara Elliott at The Hauenstein Center for Presidential Studies on September 17, 2010.
1. Tocqueville, Democracy in America, p. 513.
8. Tocqueville, Democracy in America, p. 506.