The former West Wing star, 62, has been handed $300,000 (£188,000) for "opening eyes, ears and minds" with her theatre projects about Rodney King, the face of the Los Angeles Riots, and healthcare.
Smith says, "I am deeply honoured. I can't imagine a greater honour than having my name linked with the incomparable Dorothy and Lillian Gish."
The annual cash prize is given to a person who has made "an outstanding contribution to the beauty of the world and to mankind's enjoyment and understanding of life".
Previous recipients have included Bob Dylan and Robert Redford.
Smith played Dr. Nancy McNally in The West Wing; she has also appeared in TV show Nurse Jackie, and her film credits include RENT, Philadelphia and The American President.