Senate Finance Committee Hearings on Nonprofits and Philanthropy

The Senate Finance Committee has announced hearings On Tuesday, April 5, 2005 at 10:00 am EST.

The hearing is titled, “Charities and Charitable Giving: Proposals for Reform.” and will take place in Room 628 Dirksen Senate Office Building.

Witnesses scheduled to testify include:
The Honorable Mark Everson, Commissioner, Internal Revenue Service
George K. Yin, Chief of Staff, Joint Committee on Taxation
Leon Panetta, Director, Panetta Institute for Public Policy
Dr. Jane Gravelle, Senior Specialist in Economic Policy, Congressional Research Service
Richard Johnson, Member, Waller Lansden Dortch and Davis, PLLC
Ms. Lori Swanson, Solicitor General, Office of Minnesota Attorney General
David Kuo, Former Special Assistant to the President and Deputy Director, White House Office of Faith-Based and Community Initiatives
Brian Gallagher, President, United Way of America
Diana Aviv, President and CEO, Independent Sector

More on the money trail

What does it take to make change?

The very public fight over the future of the environmental movement marks a new moment in the civil discourse around philanthropy. For one thing, it has been anything but a civil discourse. Ever since the paper, "The Death of Environmentalism" hit cyberspace it has caused hand wringing, charges of arrogance and stupidity, defensive posturing and a whole lot of heated responses. It even hit the front page of the New York Times. My interest is not in the authors' content or the respondents' defensiveness but in the strategy for change that 1) possibly informed the paper, its tone and its distribution or 2) may result from the paper's tone, distribution and the responses it has generated.

I don't want to support obnoxious mudslinging as a means of sparking change (though it has certainly worked for many a political campaign). I'm not at all sure that the paper and its authors will shift policies and practices as they may have hoped. But I do think it is important that all of us be open to challenges to our ideas, that we see those challenges as chances to sharpen our thinking, and that everyone in the mainstream middle or progressive left wake up and realize that our ideas as currently packaged, marketed and implemented also are not making the changes we want.

Broken Promises, Broken Links

Lots of folks think this Republican Congress is overstepping its boundaries. Representatives Pelosi and Slaughter, Democrats both, released a report as part of the minority of the House Rules Committee. The report, titled Broken Promises: The Death of Deliberative Democracy, is linked to on Eric Alterman's blog at the Center for American Progress, The Boston Globe, The Washington Post, and Daily Kos, among a few hundred other sites. Funny thing is, every one of these sites has a link to the report on the House Democrats site - AND THE LINK DOESN'T WORK! Where did the report go....?

Who speaks for progressive philanthropy?

The Senate Finance Committee and the Joint Committee on Taxation are both investigating nonprofits and philanthropy. There is every likelihood that this, the 109th Congress, will enact some level of "reform" of the nonprofit sector and philanthropy. Both Houses of Congress are currently controlled by Republicans, and both bodies have shown a remarkable degree of legislative dexterity when it comes to interpreting or simply rewriting the rules of law - as seen most recently in their involvement in a private family medical decision. This Congress and Administration are not the slightest bit shy in terms of allowing their supporters to the "dirty work," and so we have USA Next, the group behind the attach ads on Candidate John Kerry now aggressively taking on the AARP - which it deems as too liberal which I would read as "its big and it opposes privatizing social security."

What does this have to do with philanthropy and nonprofits? Well, philanthropy is big - US Foundations control more than $400 billion in assets and make more than $30 billion in grants each year. Nonprofits are big - accounting for hundreds of millions of jobs and more than 5% of GDP. And they both tend to be liberal. Which actual progressives would disagree with, but, its only really important that the conservatives see both foundations and nonprofits as liberal.

So, here's what we have:

1) A Republican controlled legislature pushing for "reform" of a big sector it deems too liberal.

2) The primary response so far from the sector itself has come from an independent panel on the Nonprofit Sector. This panel is fine, but it is consensus-based, attempting to be representative, and responsive. In other words, it has very little power and is only addressing those questions that are asked of it.

3) The Alliance for Charity Reform. This is a lobbying effort paid for mostly be members of the Philanthropy Roundtable - a politically conservative group of funders. The Alliance is not representative, it need not reach consensus, and it is focused on advancing a conservative agenda for philanthropy and nonprofits.

$) And, speaking up for the left, actively promoting a progressive agenda, lobbying Congress for reform that might strengthen the sector, its influence or its resources, is....Anybody? Is there Anybody out there?

This is the time to have the conversation about the future of the nonprofit sector and philanthropy. The conservatives are there - they set the table and they came to dinner. Who will speak for progressive philanthropy?

Follow the money

As bad as the news is, it doesn't usually keep me up all night. But something about Congress and the President of the U.S. stepping into a family's medical decisions and a State Court case gave me nightmares all night. Where does the current administration's sense of its own power end? Can it just rewrite the rules of law, ignore the separation of powers, and step in wherever it wants?

I'm referring to the Bush Administration's decision to use federal power to intervene in a state court issue - the Terri Schiavo case. (Yes, these are the Republicans we're talking about - the party of state's rights, small government, and no deficits - harrumph) While Congress and the President just stepped in over the weekend, the husband and parents in this family have been battling for years - with one set of those enormous legal bills being paid for by the same conservative foundations that underwrote the never-ending investigation of the Clintons. For more details on the money trail see bioethics.blog.

So, when you think about how change happens in the U.S, and where power is held, its useful to remember a few things: Follow the money. The rules of the game matter. Those who oppose the separation of Church and State have their own views of the separation of nonprofits and politics, and those views do NOT include the separation of money and power. Keep these ideas in mind as this same Congress rewrites the rules for nonprofits and foundations - the nonprofit reform movement now underway in the Senate Finance Committee. As these "reform" efforts unfold I strongly urge all involved in philanthropy to follow the money and keep their eyes on the rulebook. The future of the game is on the line.

What is the problem?

What is the problem in philanthropy today?

My mail pile today included reports from the Bradley Center, the Panel on the Nonprofit Sector, the Center for Effective Philanthropy and the Global Philanthropy Forum. Just sifting through this pile, it became painfully clear to me that there is no consensus on this question. Some think the problem is that the donor's intent isn't adhered to closely enough. These folks are pushing hard to make sure that institutional philanthropy pays attention to what the donor wanted long after she's dead. The Bradley Center at the Hudson Institute is working on this one. Others look at that statement and think, are you kidding me? Donor intent? That's not the problem, the problem is effectiveness or visibility or accountability or credibility or accessibility or any one of a number of other things.

I'm sure some pithy fortune cookie can say it better than I can, but I know we can't fix something until we agree on whether or not its broken and, if it is, then what it should look like when its working. Isn't it astonishing that the Senate Finance Committee, Independent Sector, countless staff people inside and outside congress, land trusts, philanthropy associations, nonprofit associations, are working away on new rules and its not even clear we're all playing the same game? What is the problem that needs to be fixed?

Global Philanthropy Forum

If you're reading this and not already at Stanford University this week you probably aren't attending the Global Philanthropy Forum. The wonders of modern technology can let you check out some of the conference on a live web feed by clicking on the home page beginning on March 2.

Read this now.

OK, I've been busy and that's why there hasn't been much posting going on. I've been walking through a Gate-enhanced Central Park, writing several papers, giving a few talks, preparing for a trip to Israel, and learning to luge in Muskegon, Michigan.

And I've been reading a lot. This last month included two histories of public broadcasting, one analysis of healthcare in America (Critical Condition) and a history of videogames (Joystick Nation). I also read Subwayland, a collection of New York Times columns, some great fiction (Case Histories) and Amos Oz's memoir. I'm now onto Richard Bradley's Harvard Rules, which I complement with daily New York Times coverage of President Summers' "foot-in-mouth" problems.

On the magazine front, I'm caught up on the last four months of New Yorkers, Harpers, Atlantic Monthlies, Wired, Dwell, Inc., Foundation News, Philanthropy, Worth, Bloomberg Wealth Manager, Fast Company, and Business 2.0.. I'm keeping my head above water on the weeklies - Chronicle of Philanthropy, Business Week, and Fortune, and ever so grateful that I let The Economist lapse. I've got FeedDemon, Bloglines and iPodder tracking the audio waves and wires for me - to the best of my ability (given that I have a family, dog, and job) I'm pretty tuned in.

Why am I telling you this? Because I read a lot and when I tell you something is "the best thing I've read lately" it means there were a lot of other choices. So pay attention.

Katherine Fulton and Andrew Blau (with help from Gabriel Kasper and others at The Monitor Group) have just published Looking Out for the Future. Go get it now. There is a main paper that outlines the state of the field, a very cool "learning journey" that helps you get more info on sources and examples, and a memo on changing the field that just might. All of it is available online at www.futureofphilanthropy.org, and while it is copyrighted (clear throat and make pitch for Creative Commons) its available for free use with attribution (there is still hope where intellectual property is concerned).

The paper does several things: It helps orient us in the current ecology of philanthropy and learn what and where there is real innovation. It presents a convincing argument about why it matters that we see the whole of philanthropy and not just the place in which we work, the funders we know, or the causes we give to.

The paper is rich and deep on the state of American philanthropy. It also is clear about the global nature of philanthropy and refreshingly honest on its own shortcomings in capturing the world's story. Fulton and Blau invite the reader to constantly reconsider the shifting lines between local and global. They capture the humanity and excitement of philanthropy. By noting the endless ways that cultural traditions interact with political and economic systems they begin to show how philanthropy reflects our expectations of ourselves and each other. The paper points us to the several possible futures (scenarios) and asks each actor to consider their role in the larger whole.

The challenge of changing philanthropy - of improving it, making it more accessible, more diverse, more reliable - is truly daunting. Fulton and Blau take it on. They may not have all the answers, but they've asked the right questions. By clearly outlining the barriers to change they have upped the ante several times for all who claim to be engaged in systems change.

Quite simply, it is the most important piece on philanthropy that I've read lately. Go get it.

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And, yes, I remember that last month I told you to read Andrew Blau's paper on changes in The Future of Independent Media. Two months in a row. I don't know whether to hope Blau keeps this up and wait to see what April brings or hope he knocks it off and gives the rest of us a chance to catch up.