Opinion Blog : Entries Tagged With 'public+welfare'
| June 19, 2008 12:10 PM |
Everything Old Is New Again, ApparentlyA swoony article in Slate recently heralded the national rollout of SingleStop, an amazing and wildly successful new social venture (not a boring old charity) with great metrics: “For every $1 invested [in SingleStop], the program gives clients $3 in benefits, $4 to $13 in legal counseling, $2 in financial counseling, and $11 in tax credits.” So what’s the revolutionary, paradigm-shifting product? Finding every dollar of government services to which the clients are entitled. Yes, that’s correct: the idea that will change the way we assist the poor in this country is to make sure that we are actually delivering the assistance that this country has already committed to providing to the poor. Only under a Republican administration could this be hailed as a triumph of private-sector innovation. It’s a fine idea—we do indeed leave substantial amounts of cash assistance on the table because people are too frightened or proud or confused to apply for it. And it may indeed be necessary to have an outside agency (rather than, say, a government employee) unearth all these goodies, because that same government employee is most likely under pressure to make her agency’s budget stretch as far as possible by disqualifying potential beneficiaries. But let’s hear no more about how effective the private sector is at providing for the needy, when the biggest idea in private-sector charity turns out to be slopping more effectively at the public trough. One might almost call it non-profiteering.
Posted by Katie Harrington
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| September 4, 2008 05:04 PM |
Social Enterprise in Scotland: The World Forum
I’m here in Edinburgh, Scotland, at the first-ever Social Enterprise World Forum. There are over 400 attendees from 25 countries, all here to talk about how to use business to accomplish social outcomes. And Scotland is a logical place for such an event. “Social enterprise is a key part of the Scottish government’s social strategy,” says Ruth Parsons, Director of the Public Sector (Scottish government). Plus, the Social Enterprise Alliance is a cosponsor of the event, and we’re scheduled to host the third world forum in San Francisco in 2010. One of the fun aspects of social enterprise conferences is to visit the social enterprises. Before the conference was formally opened, there were three different study tours available to attendees. I visited the One World Shop and learned about the history of the fair trade movement. The UK is probably the leading country in the world for consumption of fair trade products, mainly because fair trade has become a mainstream concept in supermarkets here. We then walked through Edinburgh on a lovely, sunny afternoon to the Soap Company. This social enterprise sells hand-made soaps, creating production and retail jobs. It’s part of the Forth Sector, a regional social enterprise group with a handful of enterprises. The opening ceremony had a mind-boggling location: Edinburgh Castle. I haven’t been to a social enterprise conference where the opening event included viewing the crown jewels of the country! We had drinks overlooking the city, and the kilts were out in force. The introductory speeches highlighted the Scottish national government’s commitment to social enterprise, which is a noteworthy aspect of the sector here in Scotland and in the UK. The UK actually has a government minister for the Third Sector, who is focused on social enterprise (he’s due to speak on the second day of the conference). I also learned about devolution here in Scotland, which means that the Scottish national government now has responsibility for issues that used to be controlled by the UK central government. This makes the social enterprise scene just a bit more complicated here!
Posted by Kelsey Walker
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| January 8, 2009 07:00 AM |
Behind the HeadlinesHeadline in the University of Chicago Chronicle: “An economic downturn impacts social services’ ability to aid poor.” Alert the media. Oh, wait, we are the media. Interesting nugget buried under inane headline:
Query whether all those beating the drum to reduce the number of social service agencies because there are “too many nonprofits” would be willing to simply have those funds transferred directly to poor people, thereby reducing their poverty. No, we didn’t think so. So in the words of the great Toby Ziegler, “Then shut up.” New Year’s revelry left the Nonprofiteer loaded for bear.
Posted by Katie Harrington
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| January 20, 2009 11:00 AM |
Will Recovery Effort Dilute Obama’s Giving-Sector Strategy?While mildly optimistic the Obama administration can build a true partnership with the giving sector to take on America’s toughest social problems, a leading scholar of the sector fears the massive job of reviving the failing U.S. economy could limit or even doom the hope for that collaboration. “My great fear is that the economic recovery will become Barack Obama’s Vietnam War, and will drive out the resources and attention and political capital that could be used for a whole variety of promising possibilities that relate to the nonprofit sector,” says Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins University. Salamon helped organized a two-day meeting Jan. 13 and 14 at which roughly a dozen nonprofit and foundation leaders reviewed recently-circulating proposals on a policy agenda for the giving sector in working with the new administration. Participants at the gathering, held at the Rockefeller Brothers Fund’s Pocantico Conference Center in Tarrytown, N.Y., included a nonprofit consultant who has been involved in the transition but was not there representing it, Salamon says. All participants were assured they would be speaking as individuals and not necessarily as representatives of their organizations, he says. He declined to identify participants but says they represent nonprofit intermediary organizations that have nonprofit and foundation members. Within two weeks or so, he says, the group should release its recommendations. While he would not discuss details until the recommendations are released, Salamon says everyone who attended received a policy-agenda document he had prepared that drew on the work of the Listening Post Project at the Center for Civil Society Studies. That effort has been tracking the views of grassroots nonprofits and collecting empirical data on nonprofits and the operating and policy issues they face. During the election campaign last fall, the project issued a communiqué that summarized nonprofit executives’ ideas about policies the new president should pursue to address America’s big social problems. While he would not provide a copy of the eight-to-10-page policy document he prepared, saying some of its ideas likely will be included in the new recommendations, Salamon says that document reflects many of the findings of the Listening Post Project. Among the issues the document addresses, he says, he lays out three broad areas in which the nonprofit sector should be involved in efforts to fix the economy. “It’s an incredible delivery system that should be part of the recovery program,” he says. In the face of proposals for a big increase in federal funds for emergency services, for example, Salamon calls for those funds to flow though groups like local United Ways and community foundations to nonprofits that provide direct services. He also calls for matching grants nonprofits could match with volunteer hours, a strategy he says could help mobilize citizens in the recovery effort, including those who are unemployed. Separately, he says, he has suggested to members of the Obama transition team a specific vehicle for handling funds for emergency food and housing programs. Mortgage relief also is the focus of recommendations in the document for addressing nonprofits’ role in the economic recovery, Salamon says. The national network of low-income housing groups and housing-finance institutions, for example, could serve as a vehicle to help work out problem mortgage loans, he says. “These organizations have enormous track records and experience dealing with low-income mortgage borrowers,” he says. “They’ve got experience in how to structure loans for low-income persons that would be an excellent use” of funds distributed through the government’s massive Troubled Assets Relief Program, known as TARP. The third set of recommendations in Salamon’s document involving nonprofits’ role in the economic recovery address emergency incentives for charitable giving and volunteering “that would help bring extra hands into this recovery effort,” he says. In one controversial proposal, he says, he calls for temporary suspension of the excise tax on foundation earnings if foundations in return increase their grants to direct-service organizations above the five percent of their assets they are required to pay out. The document also addresses ideas to support “capacity-building” in the giving sector, Salamon says. He says he is “mildly optimistic” the Obama administration will develop strategic policies to foster greater collaboration with the giving sector and spur more charitable giving and volunteering. Having worked as a community organizer, Obama “understands community institutions and nonprofits,” Salamon says, and the incoming administration seems to recognize “the potential of nonprofits to improve policy and improve ways in which we solve public problems in this country that is refreshing and unusual.” The new administration also has an “apparent openness to a set of ideas that connect to the nonprofit sector very directly” and with a perspective “that really takes account of the actual operations of nonprofits and doesn’t go off on ideological diversions.” The outgoing Bush administration has had the “ideological perception that the sector is a substitute for government, that government can back off and nonprofits and volunteers and philanthropy can fill the gap,” Salamon says. “It was not truly a partnership.” The incoming administration, in comparison, has a “better sense of government as a true partner of the sector,” he says. But he cautions that his appraisal is “still speculation and vulnerable to the pressures that are going to arise and already are arising from the demands of the economic recovery.”
Posted by Kelsey Walker
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| January 21, 2009 10:00 AM |
It’s Time to Turn Back the DialI woke up today to a brand new America. An America where any individual can live their wildest dreams and where our collective action can make a difference. I was fortunate to be at the Capitol in Washington, D.C. yesterday as our new President Barack Obama was sworn in. The subsequent Inaugural speech he delivered was so right for the moment. It was as if our incredible crowd of a million people were being forgiven for living mediocre lives for so long, and were now being given permission to be our naturally wonderful selves again. Sometimes we just need someone to give us permission to fly. What President Obama has given many of us, I think, is a new sense of responsibility—to our country and to ourselves. Poet Maya Angelou has said that we all must take responsibility for the space we occupy. Shirley Chisholm put it a slightly different way when she declared that service is the rent we pay to be on this Earth. However you want to spin it, millions of Americans all over the country today are inspired to do something better with their lives. Pop diva Beyonce was beside herself with emotion last night as she sang “At Last” to the new President and First Lady, saying that Obama makes her want to be smarter, to get more involved. The voice of the next generation, in particular, knows now what we must do. It is time for us to begin turning back the dial. John St. Augustine knows a little something about the span of a life. He gave a talk last year about “living the uncommon life” and how urgent it is for us to make deliberate choices with our time here on Earth. If, on average, we will only live to age 77 or so, what will you do in those short years during the remaining timeline of your life? Most of us already know what we must do. What we have always longed for in our heart of hearts, in our wildest of dreams. My Life List has even compiled 90 of the most sought-after human goals. What has happened is that we have tuned out for so long, keeping ourselves busy with everything else on our to-do lists. We have lost the signal. I believe Barack Obama, in his inaugural speech yesterday, did not just lay the groundwork for a new attitude in America. He also called us as individuals to be responsible for the space we occupy. He called us to turn back the dial and reclaim that signal of hope, that radio station on the inside that compels us to live well and do good. Deep inside of each of us, there is a glimmer of wanting light that wants to do something real and true. On a clear day like yesterday at the Capitol, you could see it on the faces of a million people shivering in the winter air, wearing nothing but hope on their faces. We have been forgiven for so many years of waiting until we get our ducks in a row before we do what we want to do in our lives. We have been given permission to fly as far as we want to go. We have all been inspired to turn back the dial and become better Americans in the process. Listen for what it is that you are called to do. And when you hear it, don’t wait. Do it now.
Posted by Kelsey Walker
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| January 26, 2009 10:00 AM |
Obama’s Call for Service, a Spur to Giving SectorThe giving sector got a big push from President Obama in his inauguration speech. It also got what should be a big wake-up call. So while nonprofits and foundations may be riding high, anticipating a surge in giving championed by our new president, they also have a lot of work to do to be better stewards of the time, know-how and money Americans give. In his speech, Obama called for a “new era of responsibility” and the “recognition on the part of every American” of the shared duties of “giving our all to a difficult task.” But he also cast part of the blame for the meltdown in our economy to “our collective failure to make hard choices and prepare the nation for a new age.” While it plays an irreplaceable role in addressing urgent social problems and their root causes, the giving sector faces serious operating challenges it must address to be effective at fixing those social problems. Nonprofits are expected to do too much with too little, and too few are willing or able to invest in building their internal operations or to raise their voice to speak out and work for social change. And too many nonprofits still act as if their cause entitles them to support without having to adapt their fundraising to better engage and serve the givers they depend on. Big nonprofits and foundations also are moaning, respectively, about the difficult of raising money and the loss in the value of their assets because of the decline in the economy. But instead of getting their own houses in order, they and the trade groups that represent them are tripping over one another in a rush to grab a piece of the government’s massive financial bailout package. Foundations are flush with donated wealth dedicated to charitable purposes, flush even with the decline in the value of their assets because of the sinking capital markets. Their job is to serve as vehicles for investing assets givers have dedicated to charitable causes in return for generous tax breaks the givers enjoy. Yet foundations treat those assets as a source of private wealth and influence they make it their job to hoard and grow. Far too few foundations are willing to give more than the five percent of assets they are required to pay out each year in grants and overhead. And far too few are willing to use their voice or their shareholder role to try to shape public policies and the business strategies of companies in which they invest. In a regulatory system with few rules and weak teeth, foundations operate pretty much as they wish and are accountable to no one but their own boards, boards that typically sleep at the wheel. That lack of accountability can result in serious damage: Foundations were among the charitable investors that lost millions of dollars in the Madoff investment scandal, losses that might have been avoided had foundations been subject to greater oversight and required to disclose more about their operations and investment practices. The economic crisis, Obama said in his speech, “has reminded us that without a watchful eye, the market can spin out of control” and that “a nation cannot prosper long when it favors only the prosperous.” The giving sector does not operate under a “watchful eye,” and regulation of the sector favors big foundations and their wealthy donors, groups that have had the clout, and have exercised it, to successfully fight efforts to tighten regulation of them. The giving sector can make a huge difference in the effort to fix America’s social problems. But to truly become an effective vehicle for social change, the sector first must take a hard look at how it operates and fix what is wrong. Nonprofits need to strengthen their operations, build their capacity so they can secure and absorb more giving, and raise their voice on important policy issues. Foundations need to pay out more, give more to support nonprofit operations, be more open about what they do, and speak up on social change. And government needs to do a better job policing the giving sector and making sure it operates fairly and in the light of day. Rooted in values he called the “quiet force of progress,” the giving sector can continue to serve effectively if it is willing to be brutally honest about itself and work harder and smarter to engage and justify the “faith and determination of the American people” on which Obama said the nation relies.
Posted by Kelsey Walker
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| April 14, 2009 12:00 PM |
Foundations Can be Smarter InvestorsThe crisis in the financial marketplace should be sounding alarm bells in the charitable marketplace. With the failure of the capital markets, the value of the endowments of U.S. foundations fell nearly as much last year as the total grants those foundations paid out over the past four years. Despite those huge losses, foundation endowments still total roughly $550 billion, yet foundations are blowing a big opportunity to shape social and economic change because they continue to operate as passive investors, says Michael Passoff, associate director of the Corporate Social Responsibility Program at As You Sow. Foundations typically delegate their proxy-voting responsibilities to investment managers who often vote the foundations’ proxies based on recommendations from management of the companies in which the foundations own stock, say As You Sow and Rockefeller Philanthropy Advisors. So foundations fail to influence corporate policies on a broad range of governance and business issues and even can support actions directly opposed to their own philanthropic values and goals. Passive oversight of their investments also can put foundations at serious risk. As The Wall Street Journal reported last week, that was a key message from New York Attorney General Andrew Cuomo in a fraud charge filed April 6 against J. Ezra Merkin, the former chairman of GMAC Financial Services who Cuomo says was a middleman for the convicted investment manager Bernard Madoff. Big losses to charities that invested through Merkin underscore how charity boards fell down on the job, the Journal said. A key step foundations can take to be more responsible investors in the charitable marketplace is to be more responsible investors in the capital markets, say As You Sow and Rockefeller Philanthropy Advisers. “The surge in shareholder scrutiny of financial matters that cut across the traditional ‘governance’ and ‘social’ divide should signal that foundations now have greater opportunity than ever to exert more influence in how companies conduct business,” says Doug Bauer, a senior vice president at Rockefeller Philanthropy Advisers. Taking a more active shareholder role is an important step foundations should take to put their assets to more productive use in addressing the charitable purposes for which givers gave those assets to foundations in the first place. Private foundations, which are required to pay out at least five percent of their assets in grants and overhead, typically do not pay out more than that minimum. Community foundations, which do not face a mandated minimum payout, often pay out a bigger share of their assets than do private foundations. But far too few foundations treat their investments as assets they can use to address the social and global problems they care about. That is a huge waste because, as shareholders, foundations can play an important role in shaping the corporate and business policies of the companies in which they own stock. Foundation boards have a lot to answer for: Their hoarding of assets, combined with plunge in the capital markets, has cost the charitable world billions of dollars that now will never be used to address urgent problems. And in providing only passive oversight of the investment of their assets, foundation boards have acted as enablers of corporate boards and executives in setting and carrying out business strategies that have seriously damaged our economy, our environment and our national security. For the fifth year, As You Sow and Rockefeller Philanthropy Advisers have published a “Proxy Review” that aims to provide the leadership of foundations with guidance on shareholder proposals on social and governance issues directly related to their mission. Also available on the websites of both organizations is a downloadable copy of their earlier publication, Unlocking the Power of the Proxy, which offers information on how foundations can exercise their fiduciary responsibilities in voting their proxies. Foundations can do much more to address the economic crisis and the human toll it is taking. Instead of hoarding their assets so they can perpetuate their wealth and the power, foundation boards should be voting to pay out more in assets and better fulfilling their governance role by taking a more active role as shareholders. Foundations should be putting all their assets, including those they pay out and those they invest in the capital markets, to more productive use to address the critical and escalating social and global problems we face.
Posted by Kelsey Walker
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| April 28, 2009 11:29 AM |
Giving Sector Needs to Adapt to Economic CrisisBusiness as usual should be history for the giving sector. The recession should be spurring nonprofits, giving organizations and individual givers to regroup and find innovative ways to address urgent social and global needs that only are getting worse because of the growing economic crisis. Three new studies underscore the need for givers and nonprofits alike to change the way they operate. On study looks at steps U.S. foundations are taking to cope with the crisis, another looks at the need for U.S. nonprofits to fill key jobs, and a third says U.S. corporations and nonprofits could do more with pro-bono and skilled volunteers to offset a decline in corporate giving. Foundations already are retooling their work, with nearly two-thirds expecting to reduce the number or size of their grants, or both, according to a new survey by the Foundation Center. Over half the more than 1,200 foundations responding to the survey say they are responding to the crisis by taking on more work other than grantmaking, with two-thirds aiming to collaborate more, one-third planning to act as convenors, and one-fifth planning more staff-led work such as technical assistance, bridge and emergency financing, or advocacy. Foundations also say they will tap a range of resources to fund their giving this year, with nearly 40 percent expecting to dip into their endowments. Fourteen percent of foundations have made or launched, or plan to make or launch, special grants or initiatives to address the economic crisis, mainly by shifting existing grants budgets. And in response to the economic downturn in 2000-02, nearly one-third of foundations say, they made operational changes, such as adjustments in their investment strategies or reductions in their operating expenses, that they believe better prepared them for the current crisis. “Foundations are not rolling over in the face of adversity,” says Steven Lawrence, senior director of research at the Foundation Center. “The new survey shows foundations being creative, strategic and willing to dig deep to ensure that their agendas move forward while this crisis persists.” In a separate survey of nonprofit executive directors, Bridgespan Group finds a leadership deficit projected in 2006 may have widened in 2009 and that, despite tighter budgets, nonprofits already see a need to fill 24,000 vacant or new jobs, in areas such as finance and fundraising, in the face of growing management complexity and retirements by Baby Boomers. Developing nonprofit leaders remains critical, Bridgespan says, with nearly three-fourths of 433 executive directors responding to the survey saying they value skills from the for-profit sector. But despite big layoffs of corporate managers, 60 percent of those nonprofit executives believe they will not get enough qualified candidates. “It’s a wake-up call that even as the rolls of unemployed executives swells, nonprofits are struggling to fill key positions,” says David Simms, a Bridgespan partner. “There is an overwhelming perception that these roles will be difficult to fill due to the need for specialized skills, compensation and funding challenges, competition for the best candidates, and lack of career development opportunities.” The third survey, by Deloitte, finds that while nearly 40 percent of nonprofit executives say they will spend $50,000 to $250,000 of “hard-won” cash on outside contractors and consultants this year, 24 percent say they have no plans this year to use skilled volunteers or pro-bono support. “The current economic crisis and the new [Obama] Administration’s national call for service underscores the need for corporations and nonprofits alike to broaden their definition of corporate giving,” says Barry Salzberg, Deloitte’s CEO. “Nonprofits and corporations are encouraged to think of pro-bono and skill-based volunteerism as a valuable form of currency,” he says. “It is an opportunity to more fully maximize corporate assets, especially when demand for nonprofit services are on the rise and corporate giving is on the decline.” The ruins of the U.S. economy and capital markets can be the seedbed for innovation in the charitable marketplace. Instead of bemoaning the obvious, which is that times are tough, nonprofits and givers alike can look for ways to work smarter and make a greater impact.
Posted by Kelsey Walker
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| April 28, 2009 11:39 AM |
The Best Thing we can do for Nonprofits–and OurselvesHave you seen Rick Cohen’s typically smart and on-target piece “The Worst Thing We Can Do for the Obama Administration”? While he’s speaking about the nonprofit sector and its/our special-interest-group needs, there’s a broader point: that those of us who supported the President’s election because we share his basic principles and values should express that support by remaining independent and criticizing when necessary, rather than by becoming supplicants to or apologists for the people we put in office. That’s an idea relevant to each and all of us as citizens. The Nonprofiteer’s own version of this insight struck her while she was raging at news of the Administration’s refusal to investigate and prosecute allegations of torture. Abruptly she realized she had two choices: struggle to construct a rationale for a constitutional law professor’s apparent indifference to violations of the Constitution, or struggle to make it impossible for such apparent indifference to continue. So she’s now volunteering with the ACLU, whose legal work contributed to the release of the torture memos and which is helping to orchestrate public pressure to bring to justice the people who violated our laws in our name. Politics, it is said, is the art of the possible. The citizen’s job is to define for politicians what’s possible, and to make sure that the definition encompasses everything that’s essential. As nonprofit leaders, we know first-hand how much of what’s essential requires the government’s support. But as Cohen says, our primary job is not begging for that support; it’s giving or withholding our own based on how well the government–our government–lives up to our ideals, and its own.
Posted by Kelsey Walker
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| February 12, 2010 12:24 PM |
TED Prizewinner and Chef Jamie Oliver: Food Revolutionary?It’s TED Week, when the granddaddy of social change fests meets again in California to air the latest, best and brightest ideas to help the world. This year, organizers formally awarded a young British social entrepreneur — a chef — their prestigious TED Prize, an honor conferred annually to someone with a dream and the organizational chops to change the world, at least a bit of it. Meeting in Long Beach, conferees gave the $100,000 prize to Jamie Oliver, a 34-year-old British chef, who told TED-goers Wednesday he will use the money to start a movement [and a social change organization] devoted to fighting childhood obesity. It’s a problem, he says, that will — for the first time in history — give today’s children a shorter lifes-pans than their parents. Oliver, the son of pub owners in Calvering, Essex, England, and a high school dropout who parlayed his entrepreneurial skills into a best-selling cookbook and TV show in Britain, said last night that he wished “for a complete overhaul” of the American food system, saying processed food and industrialized agriculture are giving Americans poor choices of what to eat, decreasing life spans and causing health care costs to surge out of control. “This is a global catastrophe,” he said. “It is sweeping the world — China, India, everywhere. And in America, obesity costs Americans $150 billion per year. In 10 years, it’s set to double, and let’s be honest, guys. You can’t afford it.” In a highly-engaging, hit speech that has been the buzz of the conference this year, Oliver said obesity doesn’t just hurt the people who are overweight, but the families and social communities around them. And the food industry, he says — from restaurants to agribusiness — “needs to be stopped.” Portion sizes are massive, he says, and food labeling “is a disgrace,” he said. “The industry wants to self-police themselves but how can somebody say it’s low fat when it’s filled with sugar?” “My wish is to have a strong, sustainable movement to educate every child about food, to inspire families to cook again and empower people everywhere to fight obesity,” Oliver told conferees in this speech. “…England is right behind you, America. We need a revolution.” Oliver, named to the prize weeks ago but giving his first official speeches an interviews as a prizewinner this week, says he will use his winnings to:
Oliver, who begins a program for ABC television in March called Jamie Oliver’s Food Revolution, first caught the eye of TED conference organizers with his “Feed Me Better” campaign in the U.K. in 2005 to improve school lunches, during which he presented a petition with more than 270,000 signatures to the prime minister’s residence calling for healthier diets for children and young adults. As a result, the British government also pledged to address the issue. Oliver’s new TV show will follow Oliver as he visits Huntington, W. Va, as of December deemed the “unhealthiest town” in America for its high rate of food-related illnesses and deaths per capita. The show, created in reality-show style, will set out to chronicle Oliver’s efforts to educate the local population and create a movement to turn things around. What do you think. Can one social entrepreneur build a social movement big enough to change the way a nation, much less a global population, eats?
Posted by Samantha Penabad
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| February 22, 2010 10:01 AM |
Nonprofit Sector Needs to Be Better UnderstoodThe nonprofit sector does not get enough respect. The sector is big and sprawling, plays an indispensable role in society and the economy, and faces daunting financial and operating challenges. Yet the sector generally is poorly understood and underappreciated. A report prepared for Congress last fall by the Congressional Research Service gives a good snapshot of the sector’s magnitude and impact. Released in November, “An Overview of the Nonprofit and Charitable Sector” features lots of data and information about the size and scope of the sector and how it is funded, and about its relationship with government and key policy issues it faces. “The nonprofit and charitable sector represents a significant, highly diverse component of the U.S. economy,” the report says. Noting that President Barack Obama has “turned toward the nonprofit sector while seeking solutions to social problems,” the report says the economic downturn “increased the demand for many of the goods and services provided by charitable organizations, while simultaneously placing the same organizations under increased financial constraints.” In providing an overview of the charitable sector’s relationship with government, the report says that, in theory, “economics suggests that the government should subsidize activities that are either public goods or have positive external effects.” And it says it “can be argued that some charitable activities possess these qualities.” The report also examines the costs to government of providing grants; allowing charitable contributions to be deductible; exempting investment income of charities from tax; and providing property and sales tax exemptions. It also looks at government’s oversight role. And it reviews key policy options affecting the sector, including increasing government grants and subsidies to charities; creating an oversight agency within the federal government to gather data, conduct research, and advocate for the charitable sector; implementing policies to help charities and foundations in economic downturns; and changing the itemized deduction for charitable contributions by limiting the deduction, converting it to a credit or making it more widely available. Among data in the report:
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| October 10, 2006 06:43 PM |
Big Philanthropy’s Threat to the American Way
It was during the time of the great robber barons of the late 19th and early 20th centuries that the first—and some of the largest—American foundations were created. In our own Gilded Age, the captains of industry try to outdo one another with their philanthropic gifts as corporate profits soar and wages continue to shrink as a proportion of the nation’s GDP. Some cynics argue that now, as in ages past, philanthropy has functioned as a social safety valve, redistributing just enough wealth to keep people in low-income communities from taking to the streets in protest. Dramatic philanthropic gestures are not confined to our shores. Hong Kong billionaire Li Ka-shing recently that he would give a third of his $19 billion fortune to charity. This was followed days later by news that Mexican billionaire Carlos Slim, the world’s third richest man, would match peso for peso any amount invested by Mexican or foreign foundations in Mexican social work. Over time we can expect to hear more announcements like these from people who made their fortunes in states that cooperated in concentrating wealth into the hands of a very few. It’s much less likely, for example, that a Swedish philanthropist will emerge to grab the headlines from the Buffetts and the Gateses. That country has a progressive tax that functions to redistribute wealth, and a cradle-to-grave welfare system that obviates the need for many privately supported charitable organizations.* But in the United States, the social safety net is tenuous and under constant attack by fiscal conservatives. As a result, lower-income people feel a measure of financial insecurity that can be exploited to drive down wages and further widen the gulf between the rich and the poor. As suggested earlier, big philanthropy, together with other leveling efforts, can provide enough relief to the underclasses to quell social unrest. Because foundations often fill the gaps left by retreating sources of public support, they’re sanctioned by government and given fairly wide latitude in their operations. But if they go too far—if, as Bill Schambra, director of the conservative Bradley Center for Philanthropy and Civic Renewal warned, they begin to “undermin[e] traditional sources of authority”—then society must mobilize to curtail their power. We see this in Schambra’s warning, near the end of his op-ed, that the forces of law and good order** “may not be so complaisant about philanthropy’s license” if it “drift[s] carelessly and inadvertently into … a revolutionary undertaking.” We see it also in the constant vigilance that nonprofits need to exercise in order to preserve important advocacy rights. The fear of some is that under the leadership of liberals like Gates, Buffett, and Soros, philanthropy will become the snake that bites its own tail. Rather than forever satisfying themselves with dressing the wounds inflicted by the periodic convulsions of American-style capitalism, or with performing triage on those who don’t fare well under its rules, these philanthropists might simply decide to change the system. If unchecked, they might succeed in introducing democracy to the United States by helping to pass meaningful campaign and lobbying reform. They might shore up support for a public safety net worthy of the richest nation on earth. They might even curtail our further slide into the barbarism of state-sponsored torture. It’s our attenuated sense of social responsibility that makes big philanthropy’s interventions appear necessary in the first place. But big philanthropy also has the potential—largely unrealized, I believe—to be a civilizing force can help us evolve toward our full humanity.
** In this passage, Schambra deputizes “the American people.” _____
Posted by Albert Ruesga
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| December 12, 2006 12:46 AM |
Our Global Warming EquivalentWhenever I talk to human services nonprofits, I hear the same problem: “Our funding is being cut by the government and no one is giving us a check to fill in the gap.” One long-term ED lamented, “What will happen to our agency, which we started in the 60’s, as it matures and there’s no new blood, no new money to keep the flame alive?” Everyone except foundations and donors. Foundations don’t want to fund primary health programs, for example, because, they reason, that’s government’s job. We’re talking about a huge amount of money here. Private citizens, in general, don’t perceive the slow retrenchment of government services. And if they do, they don’t feel responsible. Afterall, they’ve paid their taxes. My question to you, dear reader, is this: Who will pay for social services in our country if neither government nor foundations will? I have a cleaning lady who is from Mexico. She pays monthly installments on her $4,000 dental bill from last year. She commutes three hours because there isn’t affordable housing nearby. Her daughter goes to a mediocre public high school, where the students watch a lot of videos in class. How will her kids ever make it to the middle class, I wonder. What will happen if there’s an emergency in the family? I don’t have a philosophical opinion about whether government should be big or small. I just want to know, Who is going to provide social services that we used to expect from our government? Year by year, it seems, local, state, and federal governments are freezing or cutting social service funding. It’s like global warning: The average person doesn’t see it; it takes place over a long period of time; and the results could be irreversible. So, who in this sector is going to raise raucous about this? I don’t see the Council on Foundations, Independent Sector, or Nonprofit Congress saying much. If they have and I’ve missed it, maybe they can speak a little louder.
Who will pay for social services in our country if neither government nor foundations will? Please post your comments below because this question confounds and scares me.
Perla Ni, founder and former publisher of the Stanford Social Innovation Review, is the founder and CEO of GreatNonprofits. She is also a co-founder of Grassroots.com. Posted by SSIR Editor
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Kelly Kleiman, who blogs as 
Jim Fruchterman is an engineer turned social entrepreneur. He has worked as a rocket scientist, founded two of the foremost optical character recognition companies, and developed a successful line of reading machines for the blind. He now runs his own “deliberately nonprofit” technology company, 
Todd Cohen, a veteran news reporter and editor, is editor and publisher of 
Rosetta Thurman is an emerging nonprofit leader of color working and living in the Washington, D.C. area. She holds a Master’s degree in Nonprofit Management and blogs about nonprofit leadership and management issues at 
Marcia Stepanek is Founding Editor-in-Chief and President, News and Information, for 
Perhaps it’s no accident that grand philanthropic gestures coincide with moments in our history when wealth becomes concentrated in very few hands and the gap between the rich and the poor becomes intolerably wide.
