Archive for the ‘Campaign finance’ Category

By any other name . . .

November 4, 2011

The Nonprofiteer has never had much time for people who want to change the name of the sector to something non-”non”—something more positive, like “Civil Society Organization,” or less meaningful, like “independent.”  But this article about the connection between Herman Cain’s campaign and a Tea Party front group funded by the Koch Brothers has her rethinking her position.  Under the headline “Cain to Review Links to a Nonprofit” we learn that

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.

Emanuel and the foundations: What price access?

March 29, 2011

In fundraising there’s an old saw that if you want someone’s money, you ask for his advice.  Leave it to the ever-innovative Rahm Emanuel to turn this observation into an ultimatum, telling people equipped with useful advice that it won’t be heard unless it comes wrapped in money.

That, in effect, is the meaning of Mayor-elect Emanuel’s request to a group of Chicago foundations that they pay the costs of his transition, costs  traditionally covered by leftover campaign funds, of which Emanuel has plenty.   In a city whose political culture has long consisted of being punished for disagreeing with or disobeying the mayor, the foundations faced an unattractive choice: call the mayor-elect on his inappropriate pick-pocketing and look forward to 40 years in the desert, or pay the man the $2 (or $2 million, as the case may be) in order to be heard.

The Nonprofiteer doesn’t blame the foundations for ponying up, though she wishes they hadn’t: their job is to influence public policy and make change, and the mayor’s office is an important route (sometimes the only route) to doing so.  But the Emanuel administration-in-waiting should never have asked for this sort of tribute.  Whether intended or not, the request makes it appear that access to city government is restricted to those who tithe.  There’s nothing new about that—the title “City That Works” has always ended in a silent “For Pay”—but Chicagoans might be excused for having hoped for something new post-Daley.

Many in the nonprofit sector are dismayed at having to compete with city government for the foundations’ largesse, and that’s a legitimate concern, though a belated one: the Daley administration never hesitated to ask private and foundation donors to subsidize city expenses with money that would otherwise have gone to independent community groups.  (Can you say “Millennium Park”?  “Olympic bid”?)  But the Nonprofiteer is more concerned about a new mayor’s implying, and establishing a precedent for the idea, that even being heard on the 5th floor requires big bucks.

Some wag once said that New York was about culture and Washington about power, but Chicago was all about money.  Plus ca change . . .

Well, duh!

October 26, 2010

England’s Financial Times reports concern that cuts in government grants to charities will impair the charities’ ability to provide services, and particularly to pick up the slack produced by cuts in direct government services.  The Nonprofiteer wonders what this is doing in the newspaper, as it falls into the category of Dog Bites Man.

Defenders of the cuts argue that they’ll provide incentive for government-dependent charities to raise money from the private sector and individuals.  While the Nonprofiteer yields to no one in her insistence that charities become less dependent on grants of any kind and spend more time asking for money from individuals, she also knows that this defense is crap—at best irresponsible, at worst deliberately false.

No one can realistically suggest that charities which have essentially been created by the government to provide services it funds (probably for the purpose of evading unions) can somehow instantly replace 95% of their operating budgets with contributions of a pound or ten, or even a hundred. It takes time to develop individual donors, and surely no one would seriously suggest that charities have neglected this task for lack of “incentive,” because government grants keep them in the lap of luxury.    There’s never enough money, as a result of which there’s also never enough time to raise money if you’re also going to serve your clients.

So which is it, Mr. Cameron?  Do you want charities spending their time providing services that your government now won’t, or do you want them spending their time raising money to provide those services?  “Both” is not a realistic answer.

Conservative governments should really have the courage of their convictions.  If you’re going to cut public services, then say to the public, “We’re not going to provide these services.”  It’s just dishonest to say, “We’re not going to provide them, but don’t worry, someone else is,” when no one else has anything like the resources necessary.

Apply as appropriate to the American situation.

An appraising stare down the gift horse’s gullet

August 31, 2010

Jane Mayer’s excellent piece in this past week’s New Yorker about the brothers Koch, oil billionaires who’ve donated hundreds of millions to nonprofits promoting right-wing causes, finally clarified for the Nonprofiteer her unease at Bill Gates’s campaign to persuade billionaires to donate half their estates to charity.  It’s not a question of who has or hasn’t taken the pledge, though that’s an entertaining parlor game.  Nor is it the fact that the generosity of extremely wealthy people may not be what the rest of us have in mind when we hear the word “charity.”  (The Kochs’ “charity,” for instance, is a term of art encompassing donations to all kinds of institutions, predominantly think-tanks churning out rationales for the economic interests of wealthy people and front groups to make it appear that defending those economic interests is the political will of the non-wealthy majority.)

What’s troubling about the billionaires’ pledge remains so even when the receiving causes are unexceptionable.  Gates, for instance, has very generously underwritten substantial efforts by the Global Fund to Fight AIDS, Tuberculosis and Malaria.  Good for him, and for the world.

But.

Even the best-intentioned best-directed private donations are a way for moneyed people to work their will on the public, while the rest of us have nothing but the vote.  And when the level of contributions is discussed in fractions of $1B, it’s no longer charity within a democracy: it’s benevolent dictatorship.

Maybe our country should be giving less to treat AIDS et al and more to eradicate infant and maternal mortality through the UN Population Fund; maybe not.  That’s a decision to be made by the people of the United States, through our government.  It’s really not a decision for a single person.

Why not?  Well, for starters, the “single person” in question is a billionaire, and thus always a man.  That means almost by definition that the highest levels of charitable giving will overlook women, though we constitute more than a majority of the population.  And if that’s the case—if society’s needs are met by individual whim instead of collective decisions about the greatest good for the greatest number—then what, actually, is left of self-government?

Of course, billionaires have plenty of assistance in the task of allowing economic power to trump political will.  The Supreme Court’s decision in Citizens United, holding that corporations are “persons” with First Amendment rights violated by limits on their campaign spending, already put the nation quite a way down that road.  But somehow it’s worse when something that sounds so benign—”half my estate to charity, because I’ve been so fortunate”—actually translates as “I set the agenda for the future of this country, because I’ve been so fortunate.”

What we really want from billionaires is for them to pay a lot more in income taxes: say, the 87% of taxable income paid in 1954,  or even the 70% paid at the start of the 1980s.  And then we as a group can decide where our group’s money goes.  All contribute, all decide.

And what we really want from billionaires’ heirs is for them to pay the 77% estate tax rate in effect in 1941, or even the 70% estate tax rate in effect in 1976.   (And let’s not hear any nonsense about “death taxes.”  The dead aren’t the ones paying.)  Why shouldn’t people who get money by inheritance have to pay taxes on it, just like people who get it by working?

Merely to ask that question is to answer it: no democratic society decides that people who don’t work should be privileged over those who do.  Societies like that are called “aristocracies,” and all those so-called Constitutional Originalists running around hijacking elections by screaming about excessive taxation should take a moment to remember that our Constitution was designed precisely to interfere with the establishment of a government by inheritance.

The Constitution prohibits not once but twice the granting of any title of nobility; but the Framers didn’t rest there.  They fought to cripple and ultimately abolish entail and primogeniture, the primary devices by which English law kept family fortunes together.  Why?  Because they realized that, if you’re founding a republic, it’s really not a good idea to let money keep piling up generation after generation in the same few pairs of hands.

Self-governing societies can’t operate on noblesse oblige, and societies that do aren’t truly self-governing.  As Dr. Franklin said, “A republic—if you can keep it.”

Chase: What matters?

July 23, 2010

[An excerpt of this posting appears on the Huffington Post, in the Impact section.]

The Chicago Tribune’s Chris Jones notwithstanding, the problem with the Chase Community Giving program isn’t that it lets “civilians”–non-expert non-critics–decide which theater companies deserve a $20,000 one-time no-strings grant.  The problem is that it pretends to do that–Let the People Decide!–while actually turning theater companies into marketing satellites of Chase Bank.  Institutions poor and weak enough to be moved by a $20,000 carrot–to which the competition was explicitly restricted–recite the bank’s name relentlessly to their audiences.  That’s a lot of advertising for very little money.  Of course, all corporate giving is advertising–but this is of a special, insidious kind.

The Nonprofiteer doesn’t believe in “crowd-source philanthropy,” because it’s not philanthropy at all: it’s “crowd-manipulation marketing.”  Chase has gotten hundreds if not thousands of little charities to demand that their audiences provide contact information to the bank and subject themselves to commercial targeting for the good of the cause.

These crowd-manipulation marketing programs (pioneered by Pepsi and American Express, doubtless with many more corporate behemoths yet to come) also set up a system which rewards the nonprofits with the greatest Internet presence or savvy, which is not the same as giving the money to the neediest, or best, or most diverse, group of people doing important work in society.  Again, the issue isn’t who gets to define “best;” it’s whether the agencies competing for that designation have a fair and equal opportunity to receive it.  Upper-middle-class people may imagine that “everyone” has access to the Internet, but in fact if you reward clicks and responses to e-mail and Facebook postings, you reward organizations with wealthy white audiences and disadvantage those whose audiences are nonwhite and/or poor.  Way to magnify the digital divide.  Way to make sure that the rich get richer and the poor have babies.

This lazy and manipulative approach to corporate giving diverts nonprofit attention from real fundraising–which involves relationships over the long term–to point-and-click fundraising, which costs “donors” nothing and therefore gives them no stake in the institution.

The argument about who’s entitled to judge art is a side-show, doubtless one Chase would be happy to have theaters and critics debating from here to eternity.  Meanwhile, the bank laughs all the way to–the bank.

[Unable to resist, the Nonprofiteer dons her critic's hat and argues that, though she believes her opinions about theater are better-informed and therefore more useful than those of the guy standing next to you on the train, she's also open to the possibility that her prejudices and blind spots make this false in a significant number of cases.  In any case, if she didn't believe theater was the essential human art form--because it involves words, the very thing that separates us from all other species--and therefore belonged to everyone human, she wouldn't spend so much of her life seeing and reviewing plays.  So she refuses to concede that others' engagement with theater--in whatever form, and without any credentials whatsoever--is unwelcome or inappropriate.]

“Crowd-source philanthropy” doesn’t mean the people get to decide; it means they get the illusion of deciding while actually being used to serve someone else’s commercial purposes.  We know that’s a bad thing when the issue is what corporations give to, and get from, politicians.  Let’s not fail to notice when the issue is what they give to, and exact from, us.

See also Barbara Talisman’s posting on the subject, which links to an entire discussion of the pros and cons.

Too many charities?

December 19, 2007

People wonder why nonprofits are proliferating these days, and complain that the field is too crowded.  But it finally occurred to the Nonprofiteer that the main reason for nonprofit multiplication isn’t Baby Boomer solipsism or a revival of civil society or easy access to technology; it’s something bigger, something so huge and obvious it’s nearly invisible: the exceptional unresponsiveness of our contemporary political system

Don’t you feel helpless? 

  • We choose a Democratic Senate and House to end the war, and they go on funding it and complaining they can’t get Republican permission to stop.  (Just turn the money off!  How complicated is this?) 
  • We believe in our Constitutional right to privacy, but the Justice Department and the intelligence agencies felt free to violate it and the self-same Democratic Congress is preparing to grant immunity to the phone companies that helped them do it.  (Could this possibly be because the chair of the Senate Intelligence Committee gets campaign contributions from the phone companies?  Could it really be that a Rockefeller needs to sell us out for money?) 
  • We believe we’re a civilized and law-abiding nation, but people are being tortured in our name.  (Read that again: people are being tortured on your behalf.  How’s it feel?)  The Congress passes a law prohibiting torture; the President signs and then says he doesn’t have to abide by it.  A judge tells the Executive Branch to safeguard evidence of torture relevant to future trials; instead, it tolerates destruction of a highly relevant videotape and then tells the judge not to investigate and the Congress not to hold hearings (because they might interfere with the judge’s investigation–no, I’m not making this up).
  • We believe we live in a representative democracy with three co-equal branches of government but apparently nothing–not Congressional subpoenas, not orders from Federal judges, not elections of an opposition majority–can stop this Administration from doing exactly what it pleases; and no one will even say that these refusals to obey the law constitute high crimes and misdemeanors, let alone pursue the Constitutional remedy of impeachment for them.

The Nonprofiteer–wealthy, independent, with access to a public platform–feels helpless.  How much more helpless do her fellow citizens feel?  Is it any wonder they choose self-help?  And–with the public purse apparently permanently closed to them for such frivolous purposes as buying school supplies–is it any wonder they create nonprofits and ask for charity to support them?

So let’s assume there are too many nonprofits–too many to be efficient, or too many for private charity to support.  That’s a symptom, of a cause so much more important and frightening that it makes "proliferation of nonprofits" seem like a joke problem up there with "shortage of cloth napkins." 

And–for a little irony with your despair–consider that funders complaining about nonprofit redundancy represent the very agglomerations of private wealth that have pushed citizens out of the political system and into the third sector to begin with.  No wonder it sticks in some of our craws to be expected to herald the new philanthropists and laud them for their bold engagement in grappling with social problems–problems they created for the rest of us themselves.   

Why taxing smokers is NOT the fairest, or even the best, way to balance a state’s budget

July 30, 2007

Though sticking up for smokers is about as popular as sticking up for lepers*, the Nonprofiteer wishes to  register her opposition to Illinois’s scheme for balancing the state budget by adding 75 cents to the tax on a pack of cigarettes.  Her objections are twofold:

  • Yes, of course, we want people to give up smoking, for their own sake and for the sake of the public environment.  But if we were really serious about interfering with activities that damage public health, we’d be raising the tax on alcohol even more precipitously.  Drinking is implicated in a huge percentage of hospital admissions, and not just for cirrhosis or hepatitis.  There are the injuries from drunk driving and the sexually transmitted diseases caused by risky behavior of the sort in which intoxicated people specialize, not to mention virtually every injury from violent crime.  So let’s take a little break from anti-smoking smugness, shall we?  You know the kind: it involves coughing when a character lights a cigarette on stage, or even in the movies.  Instead, let’s try paying attention to the other, even more major source of injury–especially as tobacco hurts its users first and others only incidentally, while alcohol is often the other way around.  (As the comedian Jimmy Tingle has pointed out, "There aren’t too many kids cowering in doorways, saying ‘Oh, no, here comes Dad–he’s been out smoking all night!’")  Liquor taxes have barely risen over the past 50 years–and if you think that has something to do with campaign contributions by brewers and vintners and distillers, go to the head of the class.  Yet every time anyone points out the public costs of keeping alcohol taxes low, we hear the same tired prating about the failure of Prohibition, and see the same crocodile tears about how alcohol taxation will hurt the poor most.  Listen: Prohibition had a number of terrible externalities, but it actually did reduce drinking.  And reducing drinking would be a good thing, especially among the poor.  As an old Crown Royal ad had it, "If price matters, you’re drinking too much."  So let’s acknowledge that drinking is a costly social activity–even more than smoking–and either tax both of them into oblivion or leave smokers the hell alone.
  • More relevant to the subject of this blog**, the idea that it’s better to tax small groups of people for the costs they impose on society rather than tax the whole society for services everybody needs, albeit in differing amounts, is a pernicious one.  There’s a straight line from that idea to the notion that somehow charity can make up for a lack of public support for the poor, uneducated or ill–and a very short step from there to the abolition of the entire public sector.  After all, if people should be punished by special taxation for inflicting public health costs on the rest of us, why shouldn’t people be punished by special taxation for inflicting the costs of public education on the rest of us?  Or for requiring police services?–after all, the wealthy among us pay for their own security.  And so on.  And soon we decide that poor people should bear the burden of their own poverty because, after all, most people manage not to be poor.  That way lies the workhouse and debtors’ prison–and if those strike you as a good idea you haven’t read A Christmas Carol recently.

This situation (created by the Illinois Governor’s failure of leadership, flawlessly imitated by his legislative counterparts) is the inevitable consequence of an utter unwillingness to tell the truth, namely, that balancing the state’s budget and providing services requires an increase in the income tax.  Nothing but that sort of progressive and society-wide allocation of burdens indicates with any degree of seriousness that we regard ourselves as a single society, albeit one with multiple needs, rather than a series of Balkan states just waiting to erupt into internecine war.
————-
*Something we all should be doing, by the way, rather than staying silent in the face of Lou Dobbs’s disgraceful claim that undocumented immigrants are creating a leprosy
epidemic
.  The implication that immigrants’ very presence–or that of lepers, for that matter–on our soil puts
us all at risk of the disease is arrant nonsense.  Hansen’s disease is not thought to spread through casual contact and is curable by antibiotics.  This is not, after all, the 14th Century despite
the resemblance of Dobbs’s attitudes and beliefs to those prevalent in medieval
Europe.

**A rigorous account of the comparative costs and benefits of regulating alcohol and cigarettes can be found here instead.   

Dueling Aphorisms

March 12, 2007

There’s so much delicious about Mitt Romney’s making donations to conservative nonprofits that he hopes will endorse him that it’s hard to know where to begin the commentary. 

  • Gosh, I certainly hope the funds he gave to, among others, The Federalist Society and Massachusetts Citizens for Life (is that, like, a sentence?  You have to be a citizen of Massachusetts for life?) came in the form of general operating support.  Otherwise, his foundation might accidentally be funding–gasp!–advocacy!  Will all the legislators who are so concerned about the revolutionary political tendencies of charities please confirm that Mr. Romney’s foundation shouldn’t be the subject of Congressional hearings and then lose its tax-favored status?   
  • Several of his beneficiaries have already begun revising their views of the ex-Governor’s campaign for president.  If I give pro-lifers $25K, will they revise their views to be in favor of keeping abortion safe and legal?  If so, consider this a pledge.
  • So this guy made a lot of money and thinks that entitles him to political power in a democracy.  And, whaddyaknow, it’s true!  Just funnel the money through opinion-making nonprofits.  And it’s a two-fer: not only do you get to tell people less well-off than you what to think, you also get a tax break so you pay a smaller percentage of your income than people less well-off than you. 

So which aphorism is appropriate: the one where the offended recipient of a proposition asks, "What kind of girl do you think I am?" and the man who’d offered her first $1 million and then $1 responds, "We’ve settled that, we’re just arguing about the price;" or the one where the veteran pol says, "If you can’t take their money, drink their liquor and still vote against ‘em, you don’t belong in politics"? 

I know the Nonprofiteer is always going on and on about how nonprofits should steer clear of funds from people or organizations whose agendas might distort or interfere with the recipient’s mission.  But if you can’t take their money and still refuse to endorse them for President, you don’t belong in the nonprofit sector.

Other People’s Money

January 3, 2007

People are forever yowling about how the good-for-nothing nonprofit sector should suck it up and learn something about management from the corporate world.  Well, folks, it’s finally happened: The Big Idea has made its move into charities.  And The Big Idea is:

Operate with other people’s money.

Now, the corporate right is fond of stirring the pot by arguing that corporations are doing just that when they give away some portion of their proceeds to charity; God forbid any private money should be used for the public weal.  But for the moment the Nonprofiteer isn’t concerned about the poor downtrodden stockholders whose dividends could be higher but for those pro-charity bandits in the executive suite. 

Instead, she draws your attention to the current craze for suggesting to people that they can solve the world’s problems without inconveniencing themselves at all, simply by encouraging other people to do something.

Example #1, the recent flood of suggestions to bloggers that they put icons on their sites in support of charities: PlayPumps International has been a particularly active promoter of this scheme.  (We shouldn’t be surprised, I suppose: this is a charity whose central argument is that villages in Africa can have clean water if they’re provided with pumps appealing enough to masquerade as toys: the pumps require no work, only play, and children’s power will operate them.  For all I know this is true, but it has some serious overtones of alchemy and the perpetual-motion machine.  Call it The Philanthropist’s Stone.)  "Yo, blogger, don’t bestir yourself!  Don’t give anything away–get your readers to do it for you."

Example #2, unearthed by reporters Danny Hakim and Margot Williams in the New York Times November 28 and December 3, is a scheme by which members of the New York State Legislature pass public money on to nonprofits of their own private choosing–often ones affiliated with campaign contributors.

The Other People’s Money idea arose in response to a commenter who defended the Bristol-Meyers-Squibb "you click and we’ll give" campaign as "encouraging people to actually do something, rather than just sitting around bemoaning the state of the world. In that sense, at least, it’s an opportunity to participate."  Allow the Nonprofiteer to argue that letting George (or Bristol) do it is not doing something, and that the charitable sector is going to be hurting even worse than we are now if we insist on continuing to pretend to people that charity doesn’t involve giving anything up.

Nothing like being the Puritan schoolmarm at a cocktail party–but every nonprofit Board I’ve ever counseled believes that someone else will pay the bills.  And they believe this ("Why don’t we write some more grants?  Get the corporations and foundations to give!") because everywhere they look is some other scheme based on that false notion.  In fact, as long as three-quarters of charitable contributions come from individuals–and that fraction’s held pretty steady for a quarter of a century and more–it’s important to educate individuals that giving isn’t something they can delegate.  They’re supposed to do it themselves.

And not with other people’s money.

Washing our dirty money in public

October 18, 2006

Yesterday’s New York Times included an op-ed piece suggesting that Congress close the loophole that allows charities to serve as conduits of money to politicians and lobbyists as a way of concealing the money’s ultimate provenance.  It seems inarguable that charities have better things to do than serve as money laundries for politicians.

Another reason, albeit a secondary one, to promote free tv time and a concomitant removal of money from the political process: preserving the integrity of the nonprofit sector. 


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