as they seem to have lost their own. Komen’s decision to de-fund Planned Parenthood at the behest of an anti-choice Board member reminds us how ready the right wing is to sacrifice women’s health for political gain.
There’s a petition to sign if you want to want to make your voice heard. If you’ve been a Komen supporter and you now de-fund the organization, your voice will be heard even louder.
but she’d really have preferred not to have this as an inspiration. There is no excuse for the decision of Susan G. Komen for the Cure, until now a respected source of information and funding in the fight against breast cancer, to defund Planned Parenthood‘s program of providing breast exams to poor women.
In fact, the decision doesn’t even make sense–unless you consider that a recent addition to the Board of Komen is an anti-choice ex-politician from Georgia. As another commentator has wisely noted, Planned Parenthood will survive this latest injury–the Nonprofiteer’s determination to support the agency has just been redoubled, and probably her gift will be, too–but Komen may not.
Please join the Nonprofiteer in notifying Komen of your distress at its decision to let irrelevant politics endanger the lives and health of poor women, and of your decision to redirect to Planned Parenthood any support you may have been giving to Komen.
The most powerful argument Jack Shakely makes in his LA Times op-ed piece opposing the charitable tax deduction is that it’s a poor trade-off. The retired foundation executive points out that charities have permitted themselves to be shorn of their ability to influence policy and politics in return for a mess of pottage. Of course the restrictions on charitable participation in the public arena aren’t as draconian as nonprofit executives (and especially Boards) think they are—but the point is that nonprofits understand themselves to be constrained, and rather than bothering with the details remain quiescent politically.
As strong a proponent as the Nonprofiteer is of the pursuit of individual gifts, in the real world virtually every social service agency needs seriously more government money if it’s going to make any dent in the social problems it faces. The more social service agencies feel free to advocate for this particular budget bill or that particular provision in a piece of legislation—both prohibited by the current tax-code provisions—the more likely it is that those bills and provisions will pass, which would serve way more of the agencies’ clients than the most blue-sky estimates of their potential for growth in individual giving.
The Nonprofiteer had a fascinating conversation with Margy Waller, a special advisor to Cincinnati’s ArtsWave, which leads the nation in evidence-based approaches to advocating for arts funding. Ms. Waller had reached out to correct the Nonprofiteer’s misunderstanding (and therefore misreporting) of ArtsWave’s efforts, noting that the argument is not that the public should fund the arts to promote economic recovery but that it should fund the arts to promote neighborhood vibrancy. This nuance turns out to make all the difference.
Here’s the ArtsWave insight: people are ready enough to agree with the notion that the arts are good for the economy. But if you probe deeper, and ask what top three things we should do to improve the economy, no one answers “subsidize the arts.” So apparently the argument that the arts are an economic engine (true or false) is unpersuasive, which is what really matters.
But the ArtsWave research also uncovered the fact that if you ask people what would improve their neighborhood the most, the arts come up time and time again. Why? Because artists’ residences are known to herald an improvement in real-estate values; because arts audiences mean feet on the street and therefore greater public safety; because arts venues are known to spawn coffee shops and restaurants and other places of urban liveliness.
Therefore, the argument for public funding needs to be focused not on the art but on the public benefits of art-making. This simultaneously ends the unwinnable argument about whether x or y is valid art or a useful expenditure of public funds and reminds people of what they believe anyway, that investment in arts-related infrastructure benefits everyone—not in some airy-fairy, soul-stirring, life-improving sense but in the grossest day-to-day experience of quality of life.
Thus an appeal to provide tax breaks to bring artists to a particular area would be framed not as a subsidy to these all-important art-making beings (read: overprivileged white people who ought to get jobs) but as a way to offset (maybe even reverse) the damage to property values wrought by foreclosures. The subsidy is to the value of private property (something that can be monetized) rather than to the value of art (something that cannot).
As instrumental and cold-blooded as this approach may seem, Ms. Waller makes the powerful point that vibrancy is what people love about the arts—and that weaving the arts into the fabric of other social needs and activities enables people to appreciate the arts “not as consumers but as citizens.”
The Nonprofiteer was particularly struck by that last point. Asked what citizens should do to respond to 9/11, then-President Bush had nothing more to offer than, “Go shopping.” Anything that enables us to respond to public concerns in a public spirit; anything that combats the notion that government is the problem and privatization the solution; anything that reminds us that we’re a republic if we can keep it; anything that illustrates we don’t have to buy something to value it—any of these is a consummation devoutly to be wished.
As a wise person once noted, the important thing is not to have BEEN right, but to BE right. The Nonprofiteer has been wrong in her blanket condemnation of public funding for the arts, because she thought of it exclusively in the frame established by its opponents: as subsidies to artists to create what might or might not actually be valuable. Once the framing shifts to “vibrancy,”* and to concrete benefits to the broader society, public arts support suddenly makes sense. No one else may care, but it will be a relief to her to stop being the only left-wing theater critic in the country opposed to public funding for the arts.
She continues to think that the NEA itself is a lost cause and that energy spent defending it would be better spent squeezing support for the arts out of HUD, Fannie Mae/Freddie Mac and local housing authorities. But that’s a matter of strategy. As a matter of principle, the Nonprofiteer is grateful to have discovered a valid way to defend taxpayer support to something that matters so much to her.
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*Yes, “vibrancy” can be a euphemism for “gentrification,” or at least its prodroma. But if we plan for vibrancy (instead of simply hoping that lightening strikes in this ‘hood or that), we can also plan to prevent displacement. And without displacement, “gentrification” is just another word for “safe streets, amenities and public services”—for everyone, rich or poor.
An outside lawyer will review allegations that Herman Cain’s presidential campaign accepted tens of thousands of dollars in goods and services from a tax-exempt organization founded by his chief of staff . . .
The front group, “Americans for Prosperity,” is a Wisconsin nonprofit granted at least preliminary 501c3 recognition by the IRS. And if it were actually nothing more than a group of citizens banded together to advocate for policies they believe will lead to prosperity, there would be nothing wrong with that. But if instead it’s just a mouthpiece for the Koch brothers—an Astroturf, rather than a grassroots, organization—then there is something wrong.
The IRS requires 501c3s to raise a third of their money from the public precisely to prevent the creation of captive organizations of this kind. Use of a tax-exempt entity to promote the interests of a single individual or family is a violation of Federal tax law. Moreover, if the nonprofit paid some of the Cain campaign’s expenses, that’s a violation of Federal election law—perhaps one of the few activities left that is.
The Cain campaign may collapse under the weight of far more interesting allegations (sex beats money every time); but if in fact this nonprofit was nothing more than a campaign slush fund, its existence represents a taint on the “nonprofit” label. What a shame that “handmaiden to profit and to policies assuring that the profitable get more so and the rest of us get squat” is so unwieldy.
Maybe a new name for the sector wouldn’t come amiss; but let’s be realistic. The Iron Law of Euphemisms means that whatever name is adopted instead will soon become an epithet itself. This explains the “progress” in designating African-Americans, from “n****r” to “colored” to “Negro” to “black” to “Black” to “people of color”: as long as people using the term hate the people they’re describing, the term will be infected with their hatred and soon need to be abandoned.
And as long as the wealthiest people using the term “nonprofit” are determined to distort the form to support the worst excesses of the profit-driven world, it hardly matters what the rest of us call it.
The league — which includes small groups like Access Theater and larger organizations such as Dance New Amsterdam and the Children’s Museum of the Arts — has monthly meetings where constituents help each other with everything from fundraising to legal advice. The groups have created a downtown cultural festival, which they produce in the fall and spring. The members even apply for some grants as one entity and lobby the city government as a pack. Individually, some members with budgets as small as $100,000 are barely on funders’ radar, but as a group the members generate around $14 million in economic activity per year and employ roughly 1,200 people full- and part-time. After years when none of the groups were able to score a grant from American Express, for example, the consortium applied together in 2009 and was awarded $100,000. They divvied up the money according to the size of each budget.
While the cheery tone of the article elides some of the serious difficulties arts organizations face in aligning their missions and needs with one another, the point is nonetheless well-taken: organizations too small to get attention on their own may be big enough when combined with others to secure foundation funding and government cooperation.
Such collaborations also serve as living ripostes to the chronic funder complaint that the supply of arts organizations exceeds the demand for them: if these disparate groups can work together without cannibalizing their audiences or funding, they must not be duplicating each other’s work. Or, as it is written: the whole [collaborative network] is greater than the sum of its parts.
The estimated effects of the cap and other elements of the budget package depend on whether the proposals are compared with the current tax rates of 33% and 35% or the rates scheduled for 2011, 36% and 39.6%. Compared with current rules, estimated effects are between one-half a percent and 1% decline in charitable giving . . . . When compared with tax rate provisions in 2011, charitable deductions are estimated to fall by about 1.5% if only the cap is considered, butif income effects from the entire budget package are included contributions actually rise 2.5%. The relatively modest effects of the proposal arise because (1) the effect of caps on the subsidyvalue is limited, (2) only a fraction (about 16%) of charitable giving is affected, and (3) becauseevidence suggests that behavioral responses to changes in subsidies are relatively small.
(Emphasis the Nonprofiteer’s.) To paraphrase: the tax subsidy isn’t much reduced; that small reduction doesn’t affect 84% of charitable giving; and, in fact, charitable giving isn’t all that tied to tax benefit.
So whether we take the IUPUI findings that charitable giving is likely to decline modestly if these tax reforms are enacted, or the CRS findings that it might actually go up, we should realize that everyone who’s hyperventilating about the impact of these changes on their poor struggling private school, museum or hospital should just take a deep breath. Given that the reforms will support many of the social programs, environmental protections, educational institutions and health care options the nonprofits themselves seek to provide, it’s about time for the community to stop whining and agree to pony up.
About a month ago the Nonprofiteer received a note from a public relations officer at the Jewish Federations of North America describing the Federations’ opposition to placing caps on tax deductions. Being well aware that the debt ceiling negotiations are completely out of her control (and probably out of anyone’s control at this point), this letter failed to move the Nonprofiteer to leap to her telephone and urge her Congressbeing to beat back this latest assault on the nonprofit sector.
But it wasn’t mere laziness that kept her from the front lines in this particular battle; it was actual disagreement, based on the letter’s own summary of the horrifying proposal:
Specifically, the Administration has proposed limiting tax benefits for charitable contributions for those earning over $250,000 (married) or $200,000 (single). The tax benefit of all itemized deductions, including charitable contributions, would be capped at 28 percent and the Jewish Federations want the charitable portion to be exempted.
Thus, an extremely modest proposal for assuring that the wealthiest citizens pay some additional portion of our shared tax burden is considered a threat to the health and well-being of the hundreds of thousands of people served by the Jewish Federations. This, despite the fact that deductibility’s impact on giving is far from clear.
Listen up, gang. You want to see a threat to health and well-being? How about cuts in Medicaid, in Medicare, in the Affordable Care Act, in Social Security, in food stamps, in child care, in education? The fundamental problem of the American economy is that we don’t pay enough in taxes to support the services we very reasonably demand. We don’t pay nearly as much in taxes as our quite conservative neighbors to the north, or our counterparts in Europe or Japan. So we don’t have the health care, the educational system or the family support services we need.
Even complete abolition of the charitable deduction wouldn’t make much of a dent in the shortfall we’ve created out of pure political cowardice and foolishness. The deficit is not the result of social spending but of three simultaneous wars piled on multiple tax cuts. So the hideous notion of a cap on deductions fails on the Willie Sutton basis: you don’t rob nonprofits because that’s not where the money is.
But. If there were what Everett Dirksen called “real money” hidden in the charitable deduction for wealthy families, it absolutely should be subject to revision, for the same reason every other deduction and credit and tax dodge should: because those dodges enable the wealthy to pay less than their share, and because this society needs more money than poor people’s taxes provide to continue those services necessary for us to remain a member in good standing of the developed world.
The Jewish Federations’ objection to this proposal—while completely understandable from their perspective—suggests that even the nonprofit sector has become infected with the shortsighted quarter-to-quarter thinking which addles Wall Street. Rather than consider the long-term good of the society they serve, the Federations are concerned about balancing next year’s budget. And while the Nonprofiteer doesn’t blame them for that—that’s their job—you’ll pardon her if she sides with (and cites) a different giant of the American Jewish community, Samuel Goldwyn*:
*Per Wikipedia: “In 1916, Goldfish partnered with Broadway producers Edgar and Archibald Selwyn, using a combination of both names to call their movie-making enterprise the Goldwyn Pictures Corporation. Seeing an opportunity, Samuel Gelbfisz then had his name legally changed to Samuel Goldwyn, which he used for the rest of his life. “
Could this possibly be because the alternative combination of their names is Selfish?
Who are these people, and how did they get to be so smart?
A new study has found that inverting state tax structures—whereby the highest income earners would be taxed at the current percentage of income for the lowest income earners, and vice versa—would collectively raise $490 billion in new revenue, immediately eliminating states’ budget deficits and avoiding the serious consequences of budget cuts.
What’s being “flipped,” of course, is the current regressive tax system, which depends on getting more and more money from those who have the least of it—or, as a study co-author bluntly phrased it, “squeez[ing] water out of a stone.”
Is there any possibility that state legislatures will accept this sensible suggestion? Maybe not this minute; but the Nonprofiteer suggests we all wait until crime spikes this summer (not enough police officers) and schools open this fall with huge classes (not enough teachers). Maybe then our elected officials will get a clue that dismantling workers’ compensation and blaming public employee unions will be insufficient to preserve essential services.
So a couple of weeks ago the Nonprofiteer received a press release announcing “Redefining [of] the Nonprofit Model.” Doubtless you’re all familiar with the genre: a group of business people get together and decide that the nonprofit sector hasn’t cured cancer or ended poverty because people in the nonprofit sector are stupid and lazy, and that an infusion of good old hard-headed American for-profit business practices will compensate for that. Voila: instant Great Society!
This particular redefinition was truly revolutionary:
One hundred advisors, including many of Silicon Valley’s elite, are coming together to disrupt the nonprofit space. . . . [They] have committed to one full year of serving on the board of a nonprofit. . . . [and] attending monthly salons where they will discuss the specific pain points of their assigned nonprofits and attempt to find solutions as a team. . . . [This] is part of a larger movement . . . to make the non-profit world more efficient. . . . “This is just the start of how [we] will disrupt the nonprofit sector and create new, innovative ways for business leaders to contribute . . . . Before [this], there was no easy path for nonprofits to find experienced leaders to help them at a board management level. A board role is not just about fundraising, but includes developing growth plans, operational efficiency, cause marketing, customer relationship management, event planning, and much more.”. . . . In order to maximize results, [the group] carefully matches advisors to nonprofits based on their skills, interests and a nonprofit’s needs.
So let’s review: a bunch of business people are going to sit on nonprofit Boards of Directors! And then periodically those business people will get together and talk about how to be better Board members! As Board members, they will not only fundraise but contribute their skills! They’ll join Boards based on their interest in the nonprofit’s mission! And they’ll seek ways to improve the whole sector!
The accumulation of these radical notions caused the Nonprofiteer to swoon; but the one idea that really had her down for the count was that the entire purpose of the endeavor was to “disrupt the nonprofit space.” Because really, what nonprofits trying to serve their clients need most of all is disruption of their management to supplement the disruption of funding they face constantly, disruption of their staff produced by those funding crises, and disruption of their ability to operate smoothly or secure resources when their message is being drowned out by a constant drumbeat of demands for “reinvention.”
The Nonprofiteer understands that in the tech world, “disrupt” is a positive word, suggesting the kind of change-the-world ethic that fueled Microsoft and Facebook. But she urges everyone to notice that when those disruptive entrepreneurs Bill Gates and Mark Zuckerberg moved into the nonprofit sector, what they did was to find nonprofits doing good work and give them lots of money to do more of it. If the disruptive “advisers” of the press release would just do the same thing, there would be less “news” but a healthier nonprofit sector.
As she fanned herself back to consciousness, the Nonprofiteer was struck once more. In this case, the weapon was yet another article about hybrid corporate forms designed to enable nonprofits to earn their own revenue and stop “begging.” Whether the discussion purports to be about L3Cs or public benefit corporations or Triple Bottom Lines, the argument is always the same: nonprofits should just get with the capitalist program, identify lucrative markets and earn their keep like every other good red-blooded American.
This approach ignores the fact that nonprofits’ markets usually consist of clients who are not profitable to serve—because if they were profitable to serve, the for-profit sector would be serving them. The better a nonprofit is at finding and serving its market, the poorer it will be, because though for-profit clients are a profit center, nonprofit clients are a cost center.
Fine, say the hybrid-benefit-earn-your-own-revenue people: so start a profitable business and funnel its profits into the charity. But this notion of a two-headed agency is, like most similar creatures, a monster. If nonprofits expend their limited energy on creating market-based revenue streams, they’ll be diverted from their mission-based activities. Either the marketing strategy succeeds, in which case the profit-generating people gain the power within the organization and mission falls to a sad second; or the marketing strategy fails, in which case it has consumed significant resources that should have gone to serving clients.
There are, of course, institutions for which running a business can be part and parcel of mission, for instance, job-training centers. But for mental health agencies, arts organizations, group homes, rape crisis hotlines and most of the other charities which do the important work in our society, running a business is a dangerous distraction.
What if, instead of spending time telling nonprofits how they should operate differently, business people re-examined their own operating principles? What if every business set aside 25% of its profits for investing not in the business itself but in the wider community?
In other words, instead of asking why a charity can’t be more like a business, let’s start asking why businesses don’t operate more like charities. Businesses receive all sorts of public services and protections, from the enforcement of contracts in the law courts to well-maintained roads along which to distribute their products. Why shouldn’t they be expected to contribute to the public good in return?
Most business people would say, “But our primary duty is to our shareholders, not to the public good” (and those over-influenced by Ayn Rand and the University of Chicago economics department would say “Our SOLE duty is to our shareholders, the public be damned”). Right: and the primary (or SOLE) duty of charities is to their/our clients. Anything that takes nonprofits away from that activity is perforce improper.
What’s the point of this thought experiment, in which charities chide businesses instead of the other way around? Simply to demonstrate how much business advice to charities is sheer nonsense. To presume that the voluntary sector doesn’t make a profit because it hasn’t thought about how to do so is to fundamentally misconceive its role in the wider economy.
Besides, what nonprofits need isn’t more advice: it’s more money. When business people are ready to provide that—when they’re ready to serve on Boards not as agents of disruption but as securers of resources; when they’re ready to advocate for a tax system which will underwrite the necessary work done by the voluntary sector—well, THAT will be the time for a press release.
