posted on: Thursday, August 21, 2008

by Niki Jagpal

Word: ‘Caucus’

Function: noun

Definition:

a) a closed meeting of a group of persons belonging to the same political party or faction usually to select candidates or to decide on policy;
b) a group of people united to promote an agreed-upon cause

On August 19, 2008, the Chronicle of Philanthropy (subscription required) reported that Sens. Charles Schumer (D-N.Y.) and Richard Burr (R-N.C.) created a Senate Philanthropy Caucus (SPC) “to look at ways to help foundations and charities.”

Schumer and Burr sent out a letter late last month ”strongly encouraging” their colleagues in the Senate to participate in the SPC. The letter highlights the important contributions institutional philanthropy has made to benefit broadly U.S. society. A critical observation made in the dear colleague letter is the enormous increase in foundation giving (estimated at $42.9 billion and reflecting a collective ten percent increase in giving by the U.S.’s 72,000 foundations compared to 2006). The letter notes a crucial role that nonprofits play in the communities they serve: “the knowledge and social and economic benefits that accrue to communities with strong nonprofits…almost defy quantification.”

The SPC complements the House-level Congressional Philanthropy Caucus (HPC) co-chaired by Rep. Robin Haynes (R-NC) and the late Rep. Stephanie Tubbs Jones (D-OH). The House-level caucus was formed in the spring of 2007, following the Council on Foundations-sponsored annual Foundations on the Hill lobbying event in March 2007. As the Examiner reported then, one point of agreement between foundation executives and members of Congress was the need for Congress to better understand what foundations do.

The formation of the SPC is a positive sign for the U.S. charitable sector, indicating sustained interest in philanthropy and the nonprofit sector at Congress. But as the Chronicle noted, to date the HPC comprising 44 members has held one official meeting. In attendance? One Council on Foundation’s representative who gave an overview to some 20 Congressional aides and two House members. The topic? How foundations work. Viewed from the outside? Not particularly impressive.

The congressional philanthropy caucuses are positive developments and offer potentially powerful alliance between the government and the nonprofit sectors. More specifically, the explicit links among policy, communities and philanthropy are encouraging. For far too long, foundations and nonprofits alike have shied away from the historic roles of advocacy, civic engagement and community organizing in increasing access to the policy process and promoting participatory democracy.

But are philanthropy and nonprofits getting heightened Congressional attention because government is offloading its social responsibilities? Yes, the U.S. civil society sector has made lasting and positive contributions to communities; but philanthropy would do well to remember that it is the government’s role to provide basic services to its citizens during times of hardship and need, to create a more level playing field and to encourage a transparent, inclusive and truly participatory democracy. Takeaway lesson for foundations? It isn’t just Congress that needs to be educated about what you do; the public and your grantees also need to better understand what you do and do not do (do = = fund) because foundation dollars are partially public dollars as a result of the foregone tax revenue from foundations’ tax exempt status.

Discussing the newly revised IRS form 990 at the Georgetown University Law Center in April this year, Steven Miller, commissioner of the Tax Exempt and Government Entities Division of the IRS, noted that the IRS would be “more aggressive” in monitoring the “efficiency and effectiveness” of charitable organizations, even though such monitoring is not expressly within the agency’s jurisdiction. Why not revise the 990 PF form to include the same accountability and governance data? This would build Congressional and public trust and knowledge of foundations but no revisions to the PF form appear imminent.

I’m hopeful that the Congressional Philanthropy Caucuses will fall under Merriam-Webster’s definition ‘b’ above and function as a group united around a common cause. But the roles of government, philanthropy and nonprofits must be clearly delineated to avoid government shirking its public responsibilities and foisting them onto the civil society sector instead. And we would all benefit from knowing more about what exactly it is that foundations do.

Niki Jagpal is research director at the National Committee for Responsive Philanthropy (NCRP).

posted on: Friday, April 11, 2008

By Niki Jagpal

In a recent Yuma Sun op-ed Dr. Tibor R. Machan makes some striking arguments about how the corporate welfare state leads to irresponsibility as evidenced by the behavior of corporations that are bailed out by the federal government. Citing the recent federal response to the collapse of the subprime mortgage market, Machan argues that corporate irresponsibility parallels personal irresponsibility. He asserts:

“[…] The injustice of the welfare state there is also the fact that it leads to
massive corruption throughout a society and severe misconceptions about what it
really takes to make a reasonably prosperous life for oneself, both in personal
and business affairs.”

Dr. Machan is correct to highlight the “rip-offs that constitute the welfare state where politicians and bureaucrats extort funds from innocent citizens so as to support unsuccessful business enterprises.” Yet, his comparison of the federal bailout of big business deserves at least two additional qualifications. First, corporations are granted personhood rights under the 14th Amendment to the Constitution, as noted by Joel Bakan and other scholars. Yes, the same Amendment that was intended to grant all U.S. citizens, regardless of race, equal citizenship rights and protections, provides the same guarantees to corporations. Second, Dr. Machan fails to note the inherent contradiction of the federal government’s ideology and practice. Republicans repeatedly call for limited government, contraction of the social safety net and emphasis on personal responsibility. Yet, it is a Republican administration and its officials that have infused billions of taxpayer dollars into the failing banks to avoid a total economic collapse.

Lastly, while Dr. Machan is correct to compare corporations to individuals in light of the 14th Amendment protections given to big business, I disagree with his statements that our welfare system provides an incentive for individuals to abdicate a sense of personal responsibility. Anybody familiar with The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 knows that the complete overhaul of our social safety net programs resulted in measures that mandate “personal responsibility” eligibility criteria for welfare benefits. The replacement of AFDC by TANF is probably the most well-known example. Changes made during the 1996 welfare reforms require TANF recipients to demonstrate that they have either worked or actively searched for work to remain eligible for assistance, including those working single-parent headed households, which Dr. Machan would define as, “people who create huge families they are unable to support on their own.”

Dr. Machan’s critique of the government’s bailout of the big business points to two important issues: the personhood rights afforded corporations and the abuse of federal tax dollars to do so. But his comparison of individual welfare programs to the recent federal response is falsely premised and only serves to perpetuate the myth of the ‘welfare queen’ and the lack of any idea of a social contract that obligates government to care for those in need. Dr. Machan asserts that philanthropy and charity should provide those in times of need with assistance but his piece raises more questions than it answers. How can philanthropy or individual charity possibly address the broad needs of those least well-off when our tax dollars are subsidizing bad business practices? The nonprofit sector is not a substitute for the public sector, nor could it be – philanthropy’s contribution to the nonprofit sector is dwarfed by tax revenues. It’s like forcing apples to become oranges on many levels, though it does remind me of the cover of Stephen Levitt’s Freakonomics.

Niki Jagpal is research director at NCRP