Archive for the ‘Private Philanthropy’ Category
January 4, 2012
Here’s a chronic story (h/t The Nonprofit Quarterly), about how the United States is the most generous nation on earth. This annual survey measures how often people donate money to charity, how often they volunteer and how often they help strangers in need—the distinction between #1 and #3 being a little vague.
While the Nonprofiteer salutes all the donors among us, she feels constrained to point out that the United States leaves to private charity a whole range of activities provided elsewhere by the government. Are the citizens of France really less giving, or are they just willing to give free public higher education through their taxes rather than depend on the kindness of strangers? Are the Swedes, who provide paid parenthood leave while Americans think they’re generous to provide unpaid leave, really stingier than we are? And do the English really turn their backs on the needy, or do they instead provide health care for everyone?
The Nonprofiteer is proud to be an American, but she prefers to be proud of the things we really do well rather than the things we do to compensate for what we do poorly, namely, supply adequate social services to all our citizens.
Posted in Coverage of nonprofits, Finances, Government grants, Health care, Higher education, International, Nonprofits--General, Philanthropy and Taxation, Poverty, Private Philanthropy | 2 Comments »
December 20, 2011
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.
And for someone with foundation cred to say this! All hail Jack Shakely.
h/t The Nonprofit Quarterly Newswire.
Tags:501c3, Advocacy, charitable tax deduction, charity, donors, Executive Director, Fundraising, IRS, nonprofit, not for profit, philanthropy, Relations with funders, social services
Posted in Advocacy, Coverage of nonprofits, Current Affairs, Fundraising, Government grants, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Social Service Agencies | Leave a Comment »
November 22, 2011
Now here’s something that breaks the Nonprofiteer’s heart: the MacArthur Foundation is making grants to a dozen libraries and museums nationwide to establish youth computer learning centers modeled on YOUMedia, the Chicago Public Library’s innovative youth learning project.
Why does such good news evoke such profound sorrow? Because the Nonprofiteer can remember when the notion was that the philanthropic sector would serve as a laboratory, trying out new approaches to solving social problems and then passing along the ones that worked to be funded by the government. What we have here, however, is a model already vetted in the public sector whose future sustenance apparently will have to come from private charity.
This role-reversal is particularly galling here in Chicago, where the reward for the library’s pioneering work has been a substantial chop in the city’s library budget.
It’s hard to read a computer screen, or learn anything, when the world is upside-down.
Tags:501c3, charity, Chicago, Chicago Public Library, donors, MacArthur Foundation, nonprofit, not for profit, philanthropy, recession
Posted in Charity scandals, Current Affairs, Education, Finances, Government grants, Mission, Nonprofit management, Nonprofits--General, Poverty, Private Philanthropy, Public private partnerships, Technology | Leave a Comment »
November 18, 2011
While the Feds debate the future of the charitable deduction (among many other aspects of the tax code), some states are diving in with modifications to their own tax subsidies to charity. Michigan, for instance, will apparently permit a tax credit for donations (available for the past forty-plus years) to expire at year’s end.
Naturally, nonprofit leaders are distressed and are giving voice to their concerns. The Nonprofit Quarterly reports:
According to Michigan Radio, the credit allows Michigan taxpayers to essentially double their contribution when they give to community foundations, homeless shelters, food banks, and public institutions (such as Michigan universities, museums, public libraries, and public broadcasting stations).
The tax credit has been eliminated as part of the governor’s plan to pay for a business tax cut. According to the Detroit News, 250,000 made use of the credit in 2010, and it earned $100 million for Michigan charities and provided $40 million in write-offs.
You won’t find the Nonprofiteer cheering any endeavor designed to pay for a business tax cut, especially when it’s so well-documented that many businesses pay nothing like the nominal rate–or even pay nothing at all. But it’s too simple, and not exactly correct, to argue that the tax credit earned $100 million on a $40 million investment. First, we don’t know how many of those gifts to charities would have been made anyway. Second, as is the case with all tax subsidies, the money taken from the public fisc doesn’t support the same public purposes it would if the taxes were paid. If Michigan traded $40 million worth of public schools and police officers for $100 million worth of private schools and university police forces, is it really better off? The allocation of funds matters as much as, if not more than, the raw amounts.
NPQ further quotes a representative of the Community Foundation for Southeast Michigan:
Studies have shown that people give to charity because they care about the cause, but tax policy influences how much people are able to give . . . . We anticipate that with the loss of the tax credit, people will give to charities they’ve supported in the past, but they will give less because it costs them more.
She may be correct, but that’s actually less an argument for maintaining the credit than for raising the tax rate on individuals. The higher the tax, the greater the value of any tax subsidy, and therefore the more likely individuals are to make tax-subsidized gifts.
That’s the theory, anyway. We’ll all be interested to see how this turns out.
And meanwhile, the Cook County Assessor has begun the process of returning Northwestern Memorial Hospital buildings to the property tax rolls, after a court ruled they were not “charities” and therefore not entitled to continued exemption under the state Constitution. The Illinois situation is worth watching because it represents a modification to tax subsidies not by the legislature but by the courts–meaning something not subject to public pressure or comment.
The Nonprofiteer is NOT arguing against “activist judges,” or any nonsense of that kind. The Illinois Supreme Court’s rulings in this area have been (in her view) utterly within the four corners of the Illinois Constitution. She’s merely making the point that sector-wide outcry will have no impact on judicial changes to the tax environment–which means that one way or another we’ll all find out soon how important tax subsidies really are.
Tags:501c3, charity, Chicago, donors, nonprofit, not for profit, philanthropy
Posted in Coverage of nonprofits, Current Affairs, Finances, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Public private partnerships | 1 Comment »
November 10, 2011
It will be interesting to see how things develop at the Washington Post’s new On Giving section. Self-described as a “conversation about philanthropy and social entrepreneurship,” it at least aspires to talk about the nonprofit sector in more depth than the conventional scandal-or-gala approach. (The Nonprofiteer has long complained about the mainstream media’s coverage of the sector, which manages to be both narrow and shallow; in fact, those shortcomings account for the launching of this blog.)
But is a focus on mammoth gifts and efforts to up-end the nonprofit model really any better? Maybe those are the dog-bites-man stories. Maybe the day-to-day struggles of the majority of good-deed-doing agencies simply don’t lend themselves to the conventions of daily journalism—but the Nonprofiteer would give a lot to see someone try to find out.
Tags:501c3, charity, corporate giving, nonprofit, not for profit, philanthrocapitalism, philanthropy, social entrepreneurship, Washington Post
Posted in Charity scandals, Coverage of nonprofits, Nonprofits--General, Private Philanthropy, Social enterprise | Leave a Comment »
November 8, 2011
. . . wrote Andy Rooney in this long-ago essay. This makes as much sense to the Nonprofiteer as anything else Andy Rooney ever said, which is to say, not much. What does it mean to “deserve” charity, beyond needing it? As George Bernard Shaw’s Alfred Doolittle memorably explained in Pygmalion,
If theres anything going, and I put in for a bit of it, it’s always the same story: “Youre undeserving; so you cant have it.” But my needs is as great as the most deserving widow’s that ever got money out of six different charities in one week for the death of the same husband. I dont need less than a deserving man: I need more. I dont eat less hearty than him; and I drink a lot more. I want a bit of amusement, cause I’m a thinking man. I want cheerfulness and a song and a band when I feel low. Well, they charge me just the same for everything as they charge the deserving. What is middle class morality? Just an excuse for never giving me anything.
Philosopher Matt Zwolinski made the same point in somewhat more formal terms.
T]he mere fact that there is a valid moral distinction to be made does not entail that we want our public policies to make it. It is, after all, difficult to discern between the deserving and the undeserving – maybe especially for governments, but for private charities too.
And Jewish folklore provides yet another version. The story is told of a rabbi who gave a beggar $100 and then faced the reproaches of his wife, who’d seen the beggar’s wife wearing fur. “He told me he needed it, and I had it, so I gave it to him,” replied the rabbi. “What he does with it after is none of my concern.” The point is that generosity is the process of separating yourself from your money, not the process of evaluating someone else’s virtues.
Does the Nonprofiteer tend to give her money to causes she judges worthwhile (and therefore deserving) and to agencies she believes are efficient (and therefore deserving)? Of course. But does she worry about whether the UN Population Fund is providing assistance only to women who became pregnant by an angel, or whether the ACLU vindicates the rights only of upright church-goers? Of course not. People who need help, deserve help. End of conversation.
Tags:501c3, ACLU, charity, deserving poor, donors, Fundraising, nonprofit, not for profit, philanthropy, Poverty, Relations with funders, UNFPA
Posted in Coverage of nonprofits, Fundraising, Mission, Nonprofit management, Nonprofits--General, Poverty, Private Philanthropy | Leave a Comment »
November 7, 2011
Alarms are sounding in the Nonprofiteer’s home town of Chicago today about the first budget proposed by Mayor Rahm Emanuel, which requires nonprofits to pay for water and sewer services they previously received free. A sector-wide outcry produced one modification—a phasing-in of the charges over three years at smaller nonprofits—but generally the Mayor is keeping a campaign promise to ask nonprofits to bear their “fair share” of municipal costs.
He also seems to be following the lead of the Illinois courts which, as previously noted, are re-examining the nonprofit status of several of the state’s hospitals. The Nonprofiteer’s colleagues at The Nonprofit Quarterly characterize Emanuel’s move as over-reaching, in that it affects nonprofits other than hospitals. But the Nonprofiteer has no difficulty identifying non-hospital nonprofits whose water and sewer bills she doesn’t feel like subsidizing: the YMCA of Metropolitan Chicago (which, notwithstanding the social services it provides, is mostly a very successful health club that uses a lot of water); the Art Institute of Chicago (which, notwithstanding the educational programs it provides, is a wealthy institution with very low personnel costs because every art-history major wants to work there); the University of Chicago (whose housing and athletic facilities use as much water as any suburban development and whose property tax exemption is secured by the Illinois Constitution). And let’s remember that the smallest nonprofits are renters, most of whom get water and sewer as part of their leases from for-profit landlords, and won’t be affected in the least. So a bit less howling, okay?
Especially as we contemplate this past weekend’s flood of accounts transferred to nonprofit credit unions in reaction to the obvious greed of the largest banks, particularly Bank of America. (Even a major philanthropist has moved his accounts to protest B of A’s failure or refusal to modify a reasonable number of mortgages). Maybe if the credit unions get wealthy enough they’ll be able to provide the rest of the sector with the working-capital loans it can rarely get from commercial banks. Maybe they’ll offer special water-and-sewer-bill loans.
And maybe a little taste of self-help will remind the sector that it’s supposed to be independent. Political trends come and go but the work we do must continue, and it’s our business to organize ourselves so it can.
Tags:501c3, arts groups, charity, Chicago, credit, nonprofit, not for profit, philanthropy, Real Estate, recession, Relations with funders, social services, taxation, water bills
Posted in Arts Organizations, Coverage of nonprofits, Current Affairs, Environmental, Finances, Government grants, Health care, Higher education, Nonprofit management, Nonprofits--General, Private Philanthropy, Public private partnerships, Real Estate, Relations with funders, Social Service Agencies | Leave a Comment »
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.
Tags:501c3, Advocacy, Americans for Prosperity, Cain, campaign finance, charity, Conflict of Interest, IRS, Koch, nonprofit, not for profit, politics, Tea Party
Posted in Advocacy, Advocacy groups, Campaign finance, Charity scandals, Coverage of nonprofits, Finances, Mission, Nonprofit management, Nonprofits--General, Private Philanthropy, Relations with funders | 6 Comments »
November 2, 2011
Ellen Alberding’s interview with the Chicago Tribune in advance of the Independent Sector‘s meeting in Chicago earlier this week pressed nearly every one of the Nonprofiteer’s buttons. Ms. Alberding, head of the Joyce Foundation, described the Foundation’s approach to what even she characterizes as a perfect storm of increased need and reduced resources in the nonprofit sector:
We do what any good business person would do when faced with reduced resources. We have become very focused on first maintaining support of our core grantees. Foundations are required to spend a minimum amount — 5 percent of our assets. On occasion, we will overspend that in order to keep our grantees whole.
In other words, business as usual. Most likely the Joyce Foundation’s governing documents prevent its Board from spending its assets down to zero, but there’s no reason why the Foundation shouldn’t use more than the statutory minimum 5% of its $800 million in assets to sustain the work it exists to support. Foundations are NOT businesses; they exist to give their money away, and only in some vague theoretical sense is an institution with $800 million facing constraints preventing it from giving away more than $40 million.
If Joyce gave only 6% instead, that would be another $8 million available to nonprofits in its areas of concern—a not-insubstantial 20% increase. What is stopping the Foundation from doing this, other than a misguided sense that preserving its capital is more important than doing its job?
And then the cherry on the sundae:
It’s the position of the Independent Sector that a cap [on charitable deductions] will reduce charitable contributions across the board and diminish support for nonprofit organizations. I believe it’s the administration’s view that the 28 percent cap might have some impact, but it wouldn’t have a dire impact. (But) I think we have to listen to the organizations themselves, who feel otherwise.
In other words, notwithstanding reality, the prejudices of self-interested parties will dictate the organization’s behavior. Their minds are made up—don’t confuse them with the facts. But as President of the organization, doesn’t it behoove Ms. Alberding to make sure her members don’t make their decisions based on fantasy?
Grrrr.
Tags:501c3, Board of Directors, charity, Conflict of Interest, donors, Endowment, foundations, Fundraising, grantmaking, grants, IRS, nonprofit, not for profit, philanthropy, politics, recession, Relations with funders
Posted in Boards of Directors, Conflict of Interest, Coverage of nonprofits, Finances, Foundation Hall of Shame/Stupid Foundation Tricks, Fundraising, Investment, Mission, Nonprofit management, Nonprofits--General, Philanthropy and Taxation, Private Philanthropy, Relations with funders | Leave a Comment »
October 31, 2011
Do you have any advice on getting phone numbers for donors not connected to board/staff/etc?
We’re finding it increasingly challenging, and people are understandably protective of personal info.
Signed, Waiting By The Phone
Dear Waiting:
I don’t, actually, though I’m a big user of WhitePages.com, where lots of people “protective of personal info” will find to their surprise that they’ve been listed. It’s worth checking, at least, because it’s much more comprehensive than the old phone book. You do risk having people say, “How did you get this number?” though relatively few will want to yell at you for saying thank you, and it doesn’t hurt to say, “Your number is published on WhitePages.com so we thought it was public information; if you’d rather it weren’t you might contact the site.”
Another thing: make sure your staff carefully examines the front of any check you receive (does anyone still send checks instead of credit card numbers?). It’s pretty standard to have phone numbers there, and that’s your first, last and only chance to copy down information you’ll need later.
Finally, modify your donor contribution card to ask for a phone number. Some people will refuse to complete the card, but many will fill it in just out of habit and then you’ve got them.
Tags:501c3, charity, donors, Fundraising, nonprofit, nonprofits, not for profit, philanthropy, Relations with funders, volunteer
Posted in Fundraising, Management Advice Day tip, Nonprofit management, Nonprofits--General, Private Philanthropy, Relations with funders, Technology | Leave a Comment »
