Category Archives: philanthropy

Charitable Deduction Reforms

charityHouston          Yesterday in talking with Brian Johns, the organizing director of Virginia Organizing on “Wade’s World” on KABF  about his forthcoming article with Ellen Ryan for Social Policy called “Leadership Development is Not a Deliverable,” we were trying to follow the curiously circuitous paths of private philanthropy as it moves from grants supporting community organizing’s mission of empowerment to limited contracts directing specific work,   A calamitous evolution, we thought.

All of which made it impossible not to read closely an op-ed in the Times by Ray Madoff, a professor at Boston College’s Law School.

He made several inarguable points:

  1. Tax deductions for charitable giving by the rich and others taxpayers making enough money to make it worthwhile to itemize deductions is essentially cost to the government of $40 billion in lost tax revenues.

  2. Numerous nonprofit hospitals with tax exemptions provide less charitable care than for profit hospitals and are indistinguishable from big for profit corporations.  Senator Grassley (R-Iowa) thinks they should have to provide more charitable care.   Who can disagree?

  3. Conservation easements are being abused by big time developers to subsidize their developments.

  4. Too many donor advised funds have become vehicles for parking money to escape taxation for an unlimited period of time.   The professor suggests a cap of seven (7) years which doesn’t seem unreasonable.

  5. There hasn’t been a Congressional review of charitable deductions since 1969.

It’s hard to argue that the rich, hospitals, and developers should at least have to work for billions of dollars’ worth of benefits, rather than have the rest of us subsidize them.   Then maybe if we can make it matter, we can also make sure some of the real donations go to make real change.


Environmental Funders Backing Losing Top Down Strategy

New Orleans    Somehow I had missed the report when it first came out, but Robert Nunn in Little Rock connected me to Peter Montague’s explosive summary in The Huffington Post laying a huge weight for the failure of the environmental movement to win anything of major significance in recent decades squarely on the shoulders of big foundations and donors investing in top-down strategies.  Peter’s headlines might have been more provocative but reading the actual report, Cultivating the Grassroots:  A Winning Approach for Environmental and Climate Funders, that Sarah Hansen had written for the National Committee for Responsive Philanthropy was if anything, more damning.

The conclusions in the executive summary were stark:

This funding strategy will require a dramatic shift in our philanthropy. In 2009, environmental organizations with budgets of more than $5 million received half of all contributions and grants made in the sector, despite comprising just 2 percent of environmental public charities. From 2007-2009, only 15 percent of environmental grant dollars were classified as benefitting marginalized communities, and only 11 percent were classified as advancing “social justice”strategies, a proxy for policy advocacy and community organizing that works toward structural change on behalf of those who are the least well off politically, economically and socially. In the same time period, grant dollars donated by funders who committed more than 25 percent of their total dollars to the environment were three times less likely to be classified as benefitting marginalized groups than the grant dollars given by environmental funders in general. In short, environmental funders are expending tremendous resources, yet spending far too little on high impact, cost-effective grassroots organizing.

Perhaps nowhere has the failure of the top-down strategy been starker than on the collapse of the climate change initiative at both the national and global level.  At the other end the feistiness of grassroots, community groups and some of the more campaign-based environmental groups has been instrumental in bringing attention to both fracking and halting the Keystone X project’s projected pipeline and curtailing work in the Tar Sands.

The popularity of the environmental issue, and the billions of dollars in funding over the last decade which the NCRP report tags as now the 6th most popular funding category are staggering, so the calls over the years that this emperor is buck naked have been incessant.  Rarely though has the blame been placed so clearly on a wrong-headed funder-driven strategy.

The report argues for more funding and more community organizing.  I’ll admit that I’m biased here, but they are right, so that eliminates and disclosure on my part.  The report is worth a look.

Equally worrisome to me is that we are seeing the same failed strategy not only at the environmental level but also in the failure to win immigration reform where there was also a forced Beltway strategy which yielded nothing.  Housing policy is the same.  Equity and community development = ditto.  Over and over again the need for foundations and their advisors to find the soft berth and their own landing pad seems to obscure any real metrics around real effectiveness or a theory of change that works.

This is refreshing.  Maybe NCRP is looking at a series that finally brings some accountability here by speaking truth to power.  Unfortunately, there is still no reason to believe that any donor will change their minds and get on a winning track, which means more hard work for the beleaguered forces on the ground.