Philanthropy - in its most highly evolved institutional forms - exists at the whim of the public sector. Foundations, donor advised funds, charitable remainder trusts are products created by the tax code. A couple of swift kicks to the tax code and we could see some fairly significant changes in the philanthropic and financial services landscapes. A permanent repeal of the estate tax could "result in a decrease in giving through charitable bequests of between $1.5 to $5 billion, based on 1999 levels." (independentsector.org/programs/gr/estatetax.html). Many of the financial service industries' recent product and service developments for high net worth Americans are based on predictions of their likely charitable giving due to the predicted intergenerational transfer of wealth. Change the laws, change the giving, change the financial products/services offered to manage the giving.
Philanthropy - as we know it - exists as a byproduct of markets and public policy. Why then is it (organized, institutional philantrhopy) generally so reluctant to engage proactively with either business or government?
Posted by Lucy Bernholz at 11/22/2002 04:37:00 PM
Not like other industries
We've made a big point of defining philanthropy as an industry (see our publication "Industry Excerpts," (available at www.blueprintrd.com/publications) and, for the most part, foundation executives, commercial gift fund vendors, researchers and others seem to be on the verge of agreeing with us. But we know that two key charactersitics of any industry, competition and regulation, play slightly irregular roles in philanthropy. For example, while there is significant competition between purveyors of giving products - commercial financial advisers, banks, community foundations, other foundations - for managing philanthropic financial assets, the need to pool funds and work together is also critical if these dollars are going to make a difference. So alliances and partnerships are as important as competition.
Regulation, on the other hand, is a powerful shaper of philanthropic action, and an area that the industry as a whole seems hell-bent on ignoring as a tool for improvement. Other industries - everything from toys to technology - recognize the influence they can have on the regulations that matter to them. They actively support everyone from their chamber of commerce to their industry trade assocations to their political action committees to ensure that regulators know their positions on issues. Philanthropy, on the other hand, prefers to keep an arms length from most policy actions regarding the industry. At the state level in particular, organized philanthropy is woefully unorganized when it somes to proactively monitoring, recommending, and working with policy issues vis-a-vis giving and nonprofits.
How do these two elements of industry - regulation and competition - and the odd nature of them in philanthropy, help us to understand the nature of the whole beast, and how might we focus on them as levers of improvement? Any ideas? email firstname.lastname@example.org
Posted by Lucy Bernholz at 11/21/2002 11:31:00 AM
Is health care next?
Today's New York Times reports that the National Academy of Sciences has notified the Bush Administration that the United States' health care system "...is in crisis." The report notes that "The health care delivery system is incapable of meeting the present, let alone the future, needs of the American people." (NYT, November 20, 2002, A1)
Almost 20 years ago, a similar report alerted the American people to a crisis in our public schools. The 1984 report, "A Nation at Risk" noted the "rising tide of mediocrity" that marked the state of American schools. Two decades later, countless new state and federal policy acts, billions in public money, millions more in philanthropic dollars - the school crisis seems ever whith us. Is health care next...?
This question is quite pressing for several reasons. The obvious ones have to with the health of our poorest, frailest friends, family members, and neighbors. But the question is also indicative of the new faces of America and the impact current demographics are likely to have on public policy and perhaps private philanthropy as well. The average age of Americans is now 34, "the oldest ever" according to an analysis of the 2000 Census commissioned by the Surdna Foundation. As we age our medical needs increase, our individual contributions to public revenue coffers through payroll taxes and other structures decline, and our demands on those services and protections rise. If the system is in crisis now, what will it look like when today's 34 year olds are 64?
How will we as a nation care for ourselves over time? How will public and private systems work together to meet the basic health needs of all our people? How will we act now to avoid looking back in 2022 or 2032 and wondering how the walthiest country in the world failed to both educate its children and care for its elderly?
Posted by Lucy Bernholz at 11/20/2002 11:53:00 AM