Archive for the ‘Health care’ Category

Dear Nonprofiteer, Whose money is too filthy to take, and why?

April 6, 2012

Dear Nonprofiteer:

I’d be interested in your take on the Tucker Max/Planned Parenthood issue. That whole issue, which I’m sure you’ve touched on before, of NPOs making tough decisions about accepting donations is one that constantly comes up.

Signed, Hoping to Keep Clean Hands and Full Coffers

Dear Hoping:

So Tucker Max (a blogger the Nonprofiteer had never heard of until this letter) tries to give half a million dollars to Planned Parenthood, which has just lost funding from the Komen Foundation and is at risk of losing Federal funding, and PP turns the money down.

Under ordinary circumstances the Nonprofiteer would say, “WTF? So he’s a sexist piece of dog excrement! So he’s trying to whitewash his reputation! Why shouldn’t we help impoverish sexists by accepting their contributions? Why shouldn’t they pay restitution for their crimes and sins?”

But these aren’t ordinary circumstances, because the donor describes himself as follows:

My name is Tucker Max, and I am an asshole. I get excessively drunk at inappropriate times, disregard social norms, indulge every whim, ignore the consequences of my actions . . . sleep with more women than is safe or reasonable, and just generally act like a raging dickhead.

Years of public education about what Planned Parenthood actually does would go right down the drain if it permitted itself to be publicly tied to an advocate of reckless, consequence-free sex. The Republicans have clearly hit a responsive chord when they strive to outdo each other in demonizing PP, and that chord is that the very existence of Planned Parenthood represents an utter breakdown of sexual morals. Never mind that this isn’t true: Tucker Max actually DOES represent an utter breakdown of sexual morals, and Planned Parenthood can’t afford to be associated with him.

In general, though, the Nonprofiteer remains in favor of taking money from bad people: it’s not possible to eradicate them, and they ought to be good for something. If she still shudders (as she does) at entering the David H. Koch Theatre at Lincoln Center, she consoles herself that it represents millions of dollars the self-same Koch no longer has available to give to the Tea Party.

It’s fine if donating makes an evil donor look good. Just be sure that accepting doesn’t make you look bad.

Existing forever versus doing some good

March 28, 2012

An op-ed piece a few weeks ago in the Wall Street Journal (behind a paywall)  argued that donors should construct their foundations to spend down assets as rapidly as possible, lest the foundations end up supporting causes their donors would revile.  This familiar argument comes with a familiar whipping-boy: the Ford Foundation, whose enthusiasm for assisting the poor and marginalized was certainly not shared by its eponymous founder Henry.  The op-ed piece, like many of its kind, focuses on the question of donor intent, arguing that only a brief payout period can assure that the donor’s intent is served.

The Nonprofiteer has never cared particularly about the intent of dead donors.  First of all, they’re dead, and while death may not extinguish intent as a matter of law it certainly does as a matter of common sense.   Second, how much better off do we really think the world would be if Ford’s foundation had spent all its money on Ford’s enthusiasms, such as promoting publication of the scurrilous anti-Semitic tract The Learned Protocols of the Elders of Zion?   Third and most important, the  tax-free status of foundations is supposed to encourage philanthropy, not the accumulation of permanently idle tax-free money.

The Nonprofiteer has long argued that the minimum expenditure required of foundations is way too minimum, and that setting up a structure to give away 5% of income shouldn’t entitle a donor to a 100% tax shelter–whatever his/her intent.  Most likely that intent was to escape from taxation, without too much more thought than that.

So let’s think about the issue not from the standpoint of donor intent but from the standpoint of social good.  Which is more useful for a philanthropy: remaining around in perpetuity, to grapple with issues that may arise a generation or three from now, or spending down in the present and relatively short-term future on issues the donor understands and cares about and which in any case are currently urgent?  From the phrasing you can tell the Nonprofiteer’s position: spend it down.

Julius Rosenwald saw the wisdom of this approach when he created a program of fellowships for African-American artists for their professional development.  Rather than keep the fellowships around in perpetuity, he ordered that the principal be awarded completely within 5 years of his death.  As a result, virtually every mid-20th-Century African-American artist you’ve ever heard of received a Rosenwald Fellowship: Ralph Ellison and Romare Beardon and Katherine Dunham and Gordon Parks and many others.   The value of what Rosenwald did, giving artists enough money so they could work without fear or distraction, is literally incalculable.

But also as a result, virtually no one remembers Julius Rosenwald, or at least not his fellowship program.  So that presents the question: are we in the business of fostering greatness, or memorializing it?  Is remembering a donor as important as creating work through a donor’s generosity?  Again, to the Nonprofiteer the answer is self-evident.  She’d rather be grateful for Ralph Ellison than to Julius Rosenwald.

Look, here’s the deal: people will make money in every generation, and in every generation some people will make a lot of money.  If we tax them properly they’ll look for the opportunity to shelter their money in philanthropy.  Why shouldn’t we tax them so that they’re motivated to spend it philanthropically, too?  Like the proverbial Fifth Avenue bus, another chunk of  money will be along any minute.

Sure, there’s a risk of spending too rapidly and with insufficient research (or “due diligence,” as people are fond of saying when they want to pretend that the nonprofit sector is really just like a business).  But the greater risk is the situation in which we find ourselves now, where philanthropies give out amounts insufficient to make any significant change.  No, philanthropy isn’t supposed to be society’s primary source of support, but while people are busy starving government so they can drown it in the bathtub, private wealth can and should step into the breach.

Consider the contributions of the Gates Foundations to the Global Fund to Fight AIDS, TB and Malaria. Can anyone really argue it would be better to hold back on eradicating those diseases, in case there’s some bigger plague later on?  If there is, as AIDS itself demonstrates, we’ll mobilize and raise money for it.  Meanwhile, in case of every ailment, time is our enemy: the later we provide resources, the harder it will be for those resources to have impact.  Thus wasting money is a less significant risk than failing to spend enough to make a difference.

Two things need to happen: philanthropists themselves need to organize their giving so that it ends within a reasonable time after their death, and Congress needs to modify the tax code to require philanthropies to pay out more each year to retain their tax-favored status.  A 10% annual payout–double the current rate–may end up causing philanthropies to dip into principal, maybe even until they’re empty.  But remember the words of Citizen Kane as he contemplated the financial difficulties of his newspaper empire: ” I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars *next* year. You know, Mr. Thatcher, at the rate of a million dollars a year, I’ll have to close this place in… 60 years. ”  Let’s take a Kane-like risk of running out of money.

One more story: Some time in the ’90s Joan Kroc stood up at a Ronald McDonald House benefit to announce her annual gift.  Rumor had it she was actually going to make a five-year pledge, and the Nonprofiteer’s table indulged in the parlor game of trying to figure out just how much that would be.   We figured the previous year’s gift ($5M) plus a little bump (so $6M) for each of 5 years, and settled on $30 million.  And then she rose to speak, a little woman holding a torn-off piece of yellow legal paper in her hand.  And she said, “I was going to make a 5-year gift, but then I thought: ‘The need is now.’  So tonight I’m giving $50 million to Ronald McDonald Children’s Charities.”  Everyone at the table fell back in her seat, literally knocked over by her generosity, and also by her insight: The need is now.

Aside from Ronald McDonald, Mrs. Kroc mostly supported causes her late husband disapproved of.  If only he’d given more in the present, he wouldn’t have had to contemplate a future in which his money went to places he despised.  So the donor’s intention and the sector’s need are in sync:

Spend it now.

Eternal vigilance is the price of—birth control?

February 10, 2012

The lesson from this past week’s Komen/Planned Parenthood contretemps is that when women make our voices heard in defense of the health care we need, we win the argument.

So let’s not hesitate to make just as much noise in response to the hysteria now being whipped up about the Affordable Care Act’s requirement that all health care providers offer free contraception.  Republican rhetoric suggests that this is the equivalent of requiring churches to distribute RU-486 instead of communion wafers; but that’s complete nonsense. Actual religious organizations are exempt. What’s not exempt is the network of hospitals and schools run by those religious organizations.

Hospitals and universities affiliated with religious groups aren’t exempt from the Civil Rights Act. As a result, they’re required to provide health care to women as well as men. Birth control is an essential part of health care for women—a fact you’d think most people would concede, as it’s a way of preventing the abortions they’re so horrified by.

The largest Catholic university in the country already provides birth control as part of its health plan. 28 states already require hospitals and universities to provide this minimum standard of care. If your employer dictates your health plan, and your health plan dictates where you get care—as most plans do—you may be sent to a Catholic hospital regardless of your own beliefs.  Why isn’t it a violation of your religious freedom to be denied the care you need based on someone else’s dogma?

This is just a sketch of the arguments we can and must make, and make loudly, before the noise-makers on the other side take away the health care we’re entitled to and count on.

Write the President, write your Congressperson, write your Senator, write the Secretary of Health and Human Services, write the editor, sign every petition that shows up in your mailbox.   Tell them: don’t compromise our health.

S.O.S.: Save Our Services.  If we don’t do it, no one else will.

Give the people at Komen a piece of your mind . . .

February 2, 2012

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.

The Nonprofiteer has been wondering what to write about . . .

February 1, 2012

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.

Define “generous”

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.

Of water bills, credit unions and self-help

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.

Beyond “Will not!” “Will so!”

October 27, 2011

Kudos to the Nonprofiteer’s nonprofit consulting colleagues Campbell and Co. for sponsoring a study by the Indiana University Center on Philanthropy to determine the impact on giving of increased marginal tax rates and a cap the charitable-giving deduction.  While some of us have been arguing that both of these moves toward social justice should be supported by the nonprofit community, and others have been arguing that the world will come to an end if every penny of tax savings isn’t afforded to the generous rich, these institutions decided to look for the facts.

The facts–as elegantly stated in a Congressional Research Service study that came to the same conclusion–are these:

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, but if 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 subsidy value is limited, (2) only a fraction (about 16%) of charitable giving is affected, and (3) because evidence 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.

On Wisconsin! Part II*

August 9, 2011

Boy, this guy is the gift that just keeps on giving:  Wisconsin Governor Scott Walker, not content to interfere with the provision of public services by destroying public-sector unions, has now decided to refuse to sign off on nonprofit grant applications to the Federal government that might “lead to ongoing programs that would need money from state taxpayers later.”   The first wave of grant applications deprived of the state’s endorsement would have supported health services, including programs to reduce binge drinking, an unhealthy activity in which Wisconsin leads the nation.

The hard Right has long argued that government services were unnecessary because nonprofits could step into the breach.  This claim was always nonsense; but at least its exponents didn’t also take on themselves the task of interfering with the charities’ overwhelmed attempts to do so.  Wisconsinites will pay the same Federal taxes whether or not the state receives Federal grants to support its nonprofit sector.  So clearly the point is not to shelter the state’s citizens from confiscatory taxes but to punish people who need help.   Governor Walker’s ideology apparently requires not just that people in need of assistance seek private charity but that private charity be deprived of the means of assisting them.

And let’s be clear about the legal antecedents of what’s going on here.  Groups of citizens of a single state are being deprived of access to something available to all other citizens of the United States—just as groups of citizens of the states of the Old Confederacy were once deprived of the vote.   Then, “states’ rights” was a buzz-phrase meaning “the opportunity to mistreat black people without interference from those durned Feds.”   Now, in Governor Walker’s view, the phrase is even more expansive, meaning “the opportunity to mistreat unhealthy and/or poor  people of every color to make the point that those durned Feds have no right to interfere.”   Anyone who’s enthusiastic about the states’ rights claims in the governors’ lawsuit against the Affordable Care Act should check out Wisconsin for a foretaste of what states’ rights really mean to the rights of states’ citizens.

The good news is, the Voting Rights Act of 1965 made clear that states’ rights are trumped by citizens’ right to vote.  Thus—and despite many recent efforts to enact barriers to that right-there’s a reasonable chance that Governor Walker will lose his legislative majority in the next few weeks, whereupon the appropriate state-federal balance can be restored.

Or, should I say, the Constitution can be restored.

——————

On Wisconsin! Part I appears here.

Eliminating the charitable deduction: It’s the end of the world as we know it, and I feel fine

May 19, 2011

As governments at all levels scramble for resources, the idea of eliminating the charitable deduction from the income tax code has begun to attract support.  Many people who work in nonprofits say this would damage the sector, because people would be less inclined to give and those who did give would give less.  Let’s assume this is true (though Americans’ passion for voluntary organizations long predates the tax code; Tocqueville, anyone?).  Is the health of “the sector” really the relevant concern?

It may be that people will give less to their churches or alma maters or prestige arts organizations if deprived of a tax benefit for doing so.  But that money will be in the public treasury, where it will go for health care and education and environmental protection (and even a pittance for the arts).  So wouldn’t the goals of nonprofit hospitals and nonprofit schools and environmental nonprofits and arts nonprofits actually be advanced if the government had more to spend on these essential services?

In other words, as with health care, the question isn’t whether people pay; it’s how.  You either pay for health care by giving money to an insurance company, or by paying taxes and letting the government insure you. (The latter model, in use in this country only for the aged, produces the greatest efficiencies and greatest satisfaction among patients, families and caregivers; but of course extending it to the rest of the population would set us on the road to serfdom.  Hayek himself endorsed public provision of health care, so what are we arguing about, again?)

Likewise, you pay either way for education and schools and environmental protection and so on; it’s just a matter of which pot you’re anteing up in: the private nonprofit or the public.

So there’s a real discussion to be had about whether the charitable deduction is a good idea for the entire sector, or whether in fact social service and social justice nonprofits–-the ones that struggle the most for philanthropic support–-would be better off without deductions but with a bigger public fisc.

(Yes, the money might go for defense, or subsidies for oil companies, or some other boondoggle.  It’s our responsibility as citizens to prevent this; tax deductions were not designed to protect us from self-government.)

This is another version of the argument the Nonprofiteer has made elsewhere about the generosity of billionaires versus the reinstatement of a significant inheritance tax.  (We Democrats should make a point of calling it “the inheritance tax,” because that’s the whole point: at the moment, people who work for their money pay income taxes on it while people who inherit their money don’t.  Or we could call it “the windfall profits tax,” which is what it is: a tax on the windfall profits of people whose only contribution to society is having picked the right parents.  And the Nonprofiteer speaks as a windfall recipient.)

When the government collects inheritance taxes it can spend the money on things we as a democratic society think important: health and education and social services and, yes, roads and weapons systems and a bunch of other things about which the Nonprofiteer’s opinions are in the minority.  If the government doesn’t collect, billionaires’ offspring can spend the money on the things they as potentates think are important, which might be eradicating malaria and endowing charter schools but which might, yes, be paying scholars to produce support for the elimination of public education or the abolition of all regulation, or even paying legislators directly for said elimination and abolition.

The tax code is designed to provide the government with resources to do its job.  Its job, among other things, is to provide essential services to citizens who cannot provide those services for themselves; and the more money it collects, the more services it can provide.  What’s important is that those services get provided, not that they get provided by the sector that happens to employ the Nonprofiteer.

So the question here is not, “Is it good for the sector?” but “Is it good for social welfare and social justice?”  The answer is not clear-–crunching the numbers would be a huge job for which the Nonprofiteer is totally unqualified-–but let’s make sure we’re asking the right question.