Having built America’s greatest fortune on iron, steel and muscle, Andrew Carnegie retired from active involvement in business in 1901 to begin a second career as the first modern philanthropist. As engagingly chronicled in David Nasaw’s new biography, the “Star-Spangled Scotsman’s” achievements as a philanthropist remain astonishing a century later: he founded the predecessor of a major university, Carnegie-Mellon; endowed the Carnegie Institution; funded museums and concert halls; created pension systems for teachers that evolved into TIAA-CREF; provided scholarships for the poor; most famously, provided funds to build nearly 3,000 free libraries worldwide; and funded more than two dozen major American think tanks, foundations and other institutions, all of which continue to confer significant benefits on society.

It is instructive in this current Age of Riches to study the father of modern philanthropy, who made his riches in the Gilded Age.

Born of modest means, Carnegie emigrated from Scotland to western Pennsylvania in 1848 at the age of 13 and with precocious speed became well connected and well positioned, eventually controlling a major portion of the US steel business and becoming the wealthiest individual in America. Carnegie moved to New York City in 1901 and laid out his essential principles of business and philanthropy in The Gospel of Wealth that “he who dies rich dies thus disgraced.” He was to retain this remarkably consistent vision for his remaining 29 years and urged the rich to give away their wealth during their lifetimes and in doing so to apply the same entrepreneurial skills and focus that they used in its accumulation. Devoting the remainder of his life to giving away his fortune, he quickly realized the necessity of systematizing what he came to call “industrial philanthropy.”

His highly organized office staff not only distributed the funds (in periodic, not lump-sum payments), but also performed research and oversaw the creation of hundreds of boards and advisory panels. With enormous funds at hand, Carnegie never ran out of money and was, at times, frustrated in his inability to give it all away. As a businessman, Carnegie had bedeviled his excellent managers with orders and suggestions, but as a philanthropist, he proved to be quite different: once he had provided money and ensured responsible leadership for institutions, he largely stayed out of their affairs.

A professor of history at City University of New York, Nasaw draws a portrait of a man who loved his adopted country, was acutely aware of how to thrive within its financial, political and social precincts, but preferred action to deliberation — and had a cultural, educational and social impact still felt today. Carnegie’s philanthropic techniques became the template for generations of modern grant-making — as did his interest and attention to self-promotion.

Foundations can make their greatest contribution as a driver of change—not as a catalyst or funder.

Yet the terrible irony of Carnegie was his unceasing ambition to become even wealthier so that he could give away ever larger amounts of money. Taking advantage of business practices that are not available today — or even considered appropriate — he was ruthless in accumulating wealth by justifying the good he could do in distributing it. While today’s wealthy are not nearly as rapacious as Carnegie and his fellow Gilded Age moguls, there is the continuing irony of how today’s global economy is generating unparalleled levels of wealth, much of which is seeking new forms and types of philanthropic outlets to meet pressing social needs, while simultaneously creating a startlingly wide divergence between the extremely wealthy and everyone else.