A new DAF?

Nonprofit Advocacy News, a regular newsletter from the National Council of Nonprofits, is a great source of information.

The issue I received in early August had this little nugget:

"Flexible Giving Accounts: A new bipartisan bill (H.R. 6616) has been introduced to allow employers to create flexible giving accounts, enabling employees to make pre-tax payroll deductions of up to $5,000 per year into an account through their employer and designate the nonprofits to receive the funds. Employers would be able to establish and administer the accounts as part of a cafeteria plan as a fringe benefit to attract and retain employees. While seen as promoting charitable giving, the legislation raises questions about whether employee confidentiality can be protected, whether employee giving options would be expanded or limited by employer preferences, and whether administrative fees will eat into the donations along the lines seen this year in the Combined Federal Campaign."

Hmmm. What's this all about? And who's behind it? And who stands to gain? I haven't had time to do much digging but it's on my radar. 

Here's the Bill. Here's some PR on it from Representative Paulsen of Minnesota who introduced it. Here's an interview with Dan Rashke who's foundation supports a 501 c 6 organization, The Greater Give, that is promoting the bill. Rashke is the CEO of TASC, a company that sells software to companies to manage their workplace giving campaigns.

The idea (a I understand it so far) - let workers at companies (that participate in the Combined Federal Campaign? United Way? Any workplace giving?) designate up to $5,000 in pre-tax funds to campaign-selected nonprofits. The employee contributes to their account over time, and the funds are then paid out on a pre-determined schedule.

The Bill's supporters claim the goal is to increase participation in workplace giving campaigns and counter the potential decrease in giving predicted as a result of the Tax Reform Act's changes tot he standardized deduction.

Who "manages" the money while it's sitting in this "account?" (I put account in quotes because as Rashke says in the interview linked above "The first thing to understand is that the Flexible Giving Account is not a physical account. In fact, in drafting the legislation, we wanted to take advantage of existing processes and infrastructures for giving." Are these "accounts" employee designed funds that will be managed by their employees? Who reaps any interest/investing income on those dollars? Who earns (who pays) any fees to manage these funds during the year?

I don't know the answers to these questions but here's my concern - Are FGA's the a new donor advised funds (DAFs)? If so, will it become a "monster" like DAFs have become? There seems to be ample opportunity in the idea as I see it for two beneficiaries - vendors of workplace giving software (like TASC) and money managers. The promised benefit to "everyday philanthropists" (their language, not mine) and communities is....that more people will participate through workplace giving campaigns because of the pre-tax deduction built into the FGA. That's a long-term aspiration built on assumptions about tax incentives and giving, promised on the back of short-term money making opportunities to existing software vendors and (maybe?) money managers.

Your thoughts?

The social sector and shiny objects (e.g. blockchains)

Like people in general, civil society organizations are easily distracted by shiny objects. Although I pinged blockchain as a buzzword a few years ago, the frenzied hype of last year's bitcoin boom and bust (probably manipulated) finally brought the idea through to general public.

There probably are good social sector uses of systems that permanently store information and make transactions verifiable by distributed participants. And there's lots of experimentation going on. My rule of thumb? Experiments with commodities on supply chains strike me as a safer place to start. Experiments with information about people strike me as disasters in the making.

Here's why:

• The ethics of permanently storing information about people are treacherous, 
• The legal frameworks for information about people are dynamic and diverse, 
• The governance choices that shape different blockchains are poorly understood, and 
• The technology itself? C'mon. Are we gonna fall for this again? "Trust me, this software is secure and safe." First of all, that's what the blockchain is - software + rules made by people.

When it comes to the blockchain there is no "one thing," there are many, and they operate under all kinds of rules. Blockchain = software + rules made by people. If you don't know how the software works, what it does and doesn't do, and if you don't understand the governing rules, don't go using the stuff on humans (my rule of thumb).  Blockchains promote encryption and permanence. It's scary how often people think they must be the right solution when the problem they're facing is bad database design, missing data, broken incentives, greedy partners, or oppressive governments.

We do need to be talking with experts from all sectors about if and when and how to use new types of software and governance structures. Software experts can explain what different systems can and can not do. Sector experts know the human and political problem and whether the challenge is one of security, verifiability, corruption, access or any permutation of these and other conditions. Governance experts know how rules get made, dodged, and broken and can advise on designing just systems that can be held accountable. The people who's data might be collected will know their concerns, now and in the next generations (remember, permanence means permanence).

Here are some useful resources from those doing good work on these questions:

Beeck Center, Georgetown University: The Blockchain Ethical Design Framework
Stanford Graduate School of Business: Blockchain for Social Impact: Beyond the Hype

And a funny, insightful video on digital economics, as told through the experience of cryptokitties (and the blockchain).

Civil society and threats to a free press

It's August 16, 2018 (Forty seven years to the day since President Nixon's administration admitted to keeping an "enemies list" of the American people).

Today, newspapers across the United States are running editorials on the importance of a free press and declaring their outrage at the way the current U.S. President treats and talks about the "media."

I've written before about how the last two decades in the "news business" might hold insights to the current and short-term future of civil society writ large. My previous comments have focused on the effects of the transformation to digital distribution (broke print journalism's ad revenue model), regulatory changes (which facilitated the creation of "news" monopolies in print and broadcast), and the entry of new players with different credentials (blurred the understanding of independent, credible news and opinions/propaganda).

By Robert Seymour - A Short History of the National Institutes of Health National Library of Medicine photographic archive.Cholera "Tramples the victors & the vanquished both." Robert Seymour. U.S. National Library of Medicine, Public Domain, Link

It's time to add to this list, and learn from the collective voices being published today by more than 300 papers across the country. The list of changes and threats to journalism now, most notably, include direct attacks from the White House itself. But we also need to pay attention to the "successful" efforts over the last
years to sow doubt and confusion in the information environment, so that even the most careful, vetted, confirmed reporting now exists in a miasma of distrust and deliberate doubt.

Both of these changes - direct threats from the federal government and an environment of mistrust,  distrust, and lies - should be added to the list of realities that face civil society in the United States. (May apply elsewhere as well, but I'm thinking U.S. at the moment)

Direct threats include: The IRS's regulatory change to not require donor disclosure for politicking nonprofits, repeated efforts to repeal Johnson Amendment.

Environment of mistrust include: Oh, come on. You've been paying attention - distrust of the news media is part and parcel of a corrosion of online communications. Once doubt takes over, it takes over everything. We are all communicating into and via an atmosphere where doubt rules. No association or organization should be assuming that their communications won't be manipulated or labeled false by opponents or political by platforms, that facts alone win, or even that their allies are who they say they are.