The word ‘philanthropy’ refers to voluntary donations.
The industrial growth involved industries like steel, railroads, coal, petroleum, and the new communication technology: the telephone. These businesses were created and led, in typical American fashion, by immigrants. Two examples stand out: Andrew Carnegie and Alexander Graham Bell. They came to the United States in poverty, having left their homes for opportunities.
As these companies grew, thousands of jobs were created, giving new chances both to the urban poor and the rural poor. Many workers were able to move up from poverty.
At the same time, new manufacturing technologies reduced the prices on many ordinary products, allowing families to experience a higher standard of living, being able to afford better and more goods.
Industrialists like Andrew Carnegie earned millions of dollars, but refused to live an extravagant lifestyle of wealth. Instead, he donated millions of dollars to schools, museums, hospitals, universities, and libraries. He wrote:
This, then, is held to be the duty of the man of wealth: First, to set an example of modest, unostentatious living, shunning display; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community – the man of wealth thus becoming the mere trustee and agent for his poorer brethren, bringing to their service his superior wisdom, experience and ability to administer.
Carnegie understood an important economic principle. Voluntary donations by individuals are the most effective way to address poverty. Government programs, which were almost nonexistent during the late 1800s anyway, are inefficient and unproductive.
So it was, then, that charitable efforts to help the poor grew during this era, fueled in part by spiritual motives. Three major social institutions were religious organizations which were effective in addressing poverty: The International Red Cross was founded in 1863 and the American Red Cross in 1881; the British YMCA in 1844 and the American YMCA in 1851; and the British Salvation Army in 1865 and the American Salvation Army in 1880. All of these organizations proclaimed that they operated on the Christian principle of offering help to all people, regardless of race or religion.
Industrial growth made society more humane and more able to offer help to those in need.
What kind of economic expansion made such charity possible? Historian Wilfred McClay explains:
Hundreds of thousands of patents were granted during this dynamic economic period of American history. There were too many important advances in technology in this era to be able to enumerate them all here, but a few deserve mention. An advance that occupies a category by itself involved the manufacture of steel, which is iron with 1–2 percent carbon added, a material that combines the hardness of cast iron with the toughness of wrought iron. Steel is superior to iron for most purposes, particularly railroad tracks, girders for tall buildings and bridges, and machine tools, but was too expensive to manufacture until the 1855 invention in Great Britain of the Bessemer process, which revolutionized steel production. The numbers tell the story; from 77,000 tons of steel produced in 1870, the number had made an astronomical leap to 11.4 million tons in 1900. By then, Pittsburgh had become the iron and steel capital of the United States, mostly due to the abundant coal deposits in the western Pennsylvania area. Its most prominent entrepreneurial figure was Andrew Carnegie, a poor Scottish immigrant who rose from working as a bobbin boy in a textile mill to becoming the titan of the steel industry.
Science and technology led the way for this economic expansion. The development of new manufacturing techniques did more than increase the amount of iron and steel produced. Industrial development funded schools for children who otherwise would have no education. It funded hospitals for those who otherwise would receive substandard care.
