Posts Tagged ‘Chicago’

No good deed goes unpunished

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.

Advertisements

More about the impact of tax subsidies to charity

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.

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.

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 . . .

Cheating on this blog with another

October 1, 2010

The Nonprofiteer shares her reflections on the differences between self-government and Chicago government in a new piece on the Huffington Post.

In Our Prime

July 22, 2010

Editor (and fellow nonprofit consultant) Nancy Worssam and I will be reading from our essay anthology In Our Prime, by and about women 50 and over, next Thursday evening, July 29, at 7:30 p.m. at Women and Children First bookstore, 5233 N. Clark Street in Chicago.  I hope some of you can join us that evening.

And please listen that morning—it’s only a week from today!—to Chicago Public Radio, 91.5 FM, when 848 host Alison Cuddy interviews Nancy and me about the inspirations for and origins of the book.

All about venues

April 18, 2010

The Nonprofiteer was talking to a friend who had just scored an amazing venue for the fundraiser of which she is chair: a church close to all forms of public transportation and parking, with a youth group willing and able to provide valet and food service and an adult auxiliary willing to take responsibility for the building so her agency doesn’t have to pay for a security guard.  A wonderful welcoming space for free–isn’t that what every nonprofit wants?

Whereupon we realized how much time we and all the other nonprofit professionals we know spend trying to find exactly that: a free place to hold the meetings of our tiny all-volunteer association, or to hold the public forum sponsored by our small civic group, or to conduct the fundraiser for our grassroots coalition.  Wouldn’t it be great, my friend suggested, if all the nonprofits in our area (Chicago, but the same would be true for any metroplex) pooled our knowledge about who will share space for free under what circumstances?

If we had a venue registry, we could save endless time–and what is time in nonprofits but the only resource we have with which to secure money?  Anything which saves one saves the other, for as it is written “A rental fee saved is a grant earned.”

Surely someone with more social-networking capability than the Nonprofiteer could figure out how to set such a thing up (isn’t this the very definition of a wiki?).  Or is there one already in Chicago and the Nonprofiteer just isn’t in the (you should pardon the expression) loop?

Thoughts on how other people approach this chronic issue welcomed!

Charter schools and unions: good ideas in conflict?

April 21, 2009

The on-line ChiTownDailyNews reports a whole lotta shakin’ goin’ on at a charter school where teachers are talking–and preparing to do more than talk–about organizing a union.

The Nonprofiteer doesn’t know the rights and wrongs of this particular engagement, but she firmly believes that charter schools–like other nonprofits–are the most fertile territory for union organizing, and she’s not surprised to see that organizing professionals have figured that fact out as well.  Combine the relative immobility of most nonprofits–the Art Institute of Chicago won’t pick up stakes and move to Singapore–with their routine underpayment and general exploitation of their employees, and it shouldn’t be a surprise when the union comes to call.

Nonprofits sustained themselves for many years on the unwaged labor of women, and for many years after that by skimping on financial capital and trying to make up the difference in human capital.  Everyone who works in the sector is familiar with poor salaries, no benefits, routine demands for unpaid overtime and other violations of the labor laws, and a resistance to improved working conditions based on the “let’s you and him fight” argument that decent salaries for nonprofit workers can only come out of the pockets of nonprofit clients–instead of the pockets of nonprofit Board members, whose job it is to provide resources for their beloved agencies.

It’s not clear that the tactic in this particular organizing battle–to point out that charter schools get public money and thus should treat their teachers the same as those in public schools–is especially on point.  (And, to reiterate: the Nonprofiteer is not making any assertions about this particular school, its particular Board of Directors, or its particular employment policies.)  Rather, it seems to the Nonprofiteer, teachers at nonprofit charter schools should range themselves on the side of all nonprofit employees, and note that the people who do society’s hardest and most important work should probably be paid reasonably for the privilege.

Nonprofits must economize, sure, and more now than ever; but they don’t get to do it on the backs of their workers.

Where’s the beef?: Big projects swallow up all the money

April 6, 2009

Hey, Nonprofiteer, here’s my beef:

I read (Crain’s Chicago Business, March 16, registration required) that the Chicago Olympics 2016 committee has a corporate sponsorship goal of $1.8 billion.  Isn’t that going to cut into corporate responses to nonprofit funding requests?  Is that going to make things worse for nonprofits than they already are?  I remember hearing a nonprofit Executive Director grousing about how much money was diverted from regular charitable donations to go to [naming opportunities in the city’s new downtown] Millennium Park, and the Tribune recently mentioned the same possibility in connection with the Olympics.

Should I worry about who will pay if the Olympics go over budget?

(This guy sounds a little worried:

http://behindthebid.blogspot.com/2007/03/crains-olympic-challenge.html)

Signed, Bean Counter

Hey, Bean–

You’re asking two separate questions.  Second one first: you shouldn’t worry about who will pay for inevitable Olympic cost overruns, because it’s all settled: you’ll pay, if you’re a Chicago taxpayer.

I think the Olympics are a bad idea on about six different dimensions, but the first one you raise is discussed least often: the tendency of big projects like the Olympics (or, before it, Millennium Park) to sop up huge volumes of corporate and foundation funding, leaving less for ordinary operating nonprofits.  But of course it’s impossible to determine what those funders would have spent on education or health care or social services had a sexier alternative not been available.

Fundraisers for high-profile projects always advance the argument that, as George W. Bush would have it, we “make the pie higher”–that donations to the Olympics constitute additional private money being put at the service of public purposes.  The notion is that glamor projects magically produce the fresh generosity necessary to sustain them.

But if Great Depression II teaches us anything, it’s that private firms actually don’t have limitless sums of money, and that if they put it in one pot (say, credit-default swaps) it’s not available for inclusion in another (say, mortgages).  By the same token, if they put the money into naming the Ronald McDonald Memorial Olympic Village it’s going to be mysteriously missing when the local food pantry comes to call.  And it stands to reason that given the option corporations (and even foundations) will choose to invest in shiny things on which they can engrave their names.

At least in Chicago, the ordinary lack of transparency in philanthropies (“It’s our money; why should we tell you what we’re doing with it?”) is complemented by an equal lack of transparency in government (“It’s your money; why should we tell you what we’re doing with it?”).  So we can only speculate that money spent on circuses will not then be forthcoming for bread.

*******************

Readers: What’s your beef?  What drives you craziest about trying to manage your agency or serve on its Board?  Is it the bully who won’t let anyone else speak?  The budgeting that features revenue everyone knows you won’t get?  E-mail your problems to the Nonprofiteer, subject line “Where’s the beef?” and she’ll solve them for all the world to see.

Second City to none

May 7, 2008

There’s probably an actual nonprofit story in here–specifically, the happy results of cooperation among artistic staff, Board and executive director (here called the President)–but for the moment the [Chicagoan] Nonprofiteer is content to crow: the Chicago Symphony wooed and won as its new music director Riccardo Muti, who (as the snippy tone of the Times article makes clear) left New York standing at the altar.