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What Nonprofit Leaders Want

Charity and foundation leaders offer advice on the best ways for the president to help philanthropy

The Chronicle of Philanthropy

November 11, 2004

 
 
As President Bush was re-elected to his second term last week, The Chronicle asked nonprofit leaders to recommend what steps he could take as he begins the new term to help charities and foundations better serve society.

The advice was wide-ranging, but many in the nonprofit world urged President Bush to step up enforcement of laws to ensure that nonprofit groups operate within the bounds of the law. Trent Stamp, executive director of Charity Navigator, a watchdog group, suggested that Mr. Bush set up an agency like the Securities and Exchange Commission to monitor charities. "Charities are big business," he said. "They need to be regulated like businesses."

Others noted that social-services organizations have been under increased strain to help the neediest Americans. Eric Mann, chief executive officer of the YMCA of Pittsburgh, urged Mr. Bush "to put government back on our side so that we aren't working alone." He also urged the president to do more to improve the economy: "Nonprofit groups can help families," he said. "But we cannot stimulate the economy or spur the creation of more jobs."

Still others suggested that the president use his bully pulpit to call attention to the role of charities, and urged him to set an example through his own giving and volunteering. Said Thomas Tighe, president of Direct Relief International: "Clean up a creek with a leader from the other party or make a generous donation in honor of the opponent you just beat to his favorite charity."

Following are excerpts from the responses provided by people in the nonprofit world:.

Betsy Buchalter Adler, a San Francisco lawyer who chairs the tax-exempt committee of the American Bar Association: President Bush should work actively, energetically, and productively with Congress to secure adequate and stable funding for the Tax Exempt/Government Entities Division of the Internal Revenue Service so that it can enforce existing law.

President Bush included more IRS funding in his most recent budget proposal than Congress was willing to approve. More advocacy from the White House, however, would have produced a different result. The Tax Exempt/Government Entities Division needs funds to keep the experienced staff members it has, and to attract and keep new staff with the necessary skills and education. It needs funds to equip its people with technology tools so they can communicate rapidly and economically with each other and with the public, gather and analyze data, and educate nonprofits and their donors about their rights and obligations under the law. It needs funds to have a real audit presence so that mistakes can be remedied, and fraud can be prosecuted.

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Daniel Ben-Horin, president and founder of CompuMentor, a San Francisco nonprofit group that provides technology assistance to charities: The single most important step the president can take to support nonprofits is to divert resources from waging war to meeting social needs.

Moving to the issues my organization touches directly, the perpetually strapped nonprofit and education sectors have helped perpetuate the misconception that if "we," the nonprofit groups and schools, gain access to technology, we will thereby be able to provide needed services to "them," the consumers of nonprofit services and schoolchildren. The reality is that nonprofit services or educational curriculums grounded in new technologies can only be fully utilized by clients and students (and parents) comfortable with new technologies.

If the president understands this, he can lead the needed charge toward true technological access for all. If we attain true ubiquity of access, then the gulf between nonprofit groups or schools and their clients will be reduced, and a powerful network effect toward social change will be realized. Otherwise, nonprofits will continue to labor mightily for disproportionately small social benefit.

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Emmett D. Carson, president of the Minneapolis Foundation and chairman of the board of the Council on Foundations: It will be impossible for the president to effectively spread the American values of freedom abroad if our country fails to respect and celebrate diversity and difference here at home. I call on the president to establish a National Commission on American Freedom, whose purpose would be threefold.

First, it would encourage communities to recognize and celebrate the core American values of freedom of speech, freedom of religion, and freedom of assembly.

Second, the commission would identify and celebrate the American nonprofit sector as an essential part of America's freedom and the institutions that give life and meaning to our freedoms.

Third, the commission could serve a vital function in identifying and promoting examples in which communities have effectively brought diverse Americans together through their local nonprofit organizations. Such a commission would very likely find America's foundations willing partners in this effort and would reaffirm a belief that America's freedoms as expressed through our nonprofit sector should be a model for the rest of the world.

In communities across the country, people of Arab descent, Muslims, immigrants, and refugees are facing increasing hostility in the workplace, from local legislatures, and from their neighbors. In addition, a legitimate national-security concern about potential funding of terrorist organizations has resulted in the establishment of guidelines that adversely affect the support of legitimate charities and programs abroad. The proposed commission would be a major step in healing the country and addressing these concerns.

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Chuck Collins, co-founder of United for a Fair Economy, in Boston: President Bush needs to support a legislative, fiscal, and political climate that recognizes how important a vibrant nonprofit sector is to a democratic, self-governing society. One important step that would strengthen community-based nonprofit organizations would be to freeze elements of the 2001 and 2003 tax cuts and send aid to the states to restore vital services. Reforming and not repealing the estate tax would retain a major incentive for charitable giving.

During President Bush's first term, states and localities experienced the worst fiscal crisis since the Second World War. This led to massive cutbacks in government spending for education, health care, and other public services. All across the country, nonprofit organizations providing vital services faced the same dilemma: how to respond to increased needs with fewer resources.

The president could have pressed for aid to the states to help them weather the perfect storm of recession, declining tax revenue, and rising costs, such as security and education. Instead President Bush signed four major tax cuts in his first term, shifting the tax burden off the federal government onto states, off wealthy individuals onto wage earners. These "shrink, shift, and shaft" fiscal policies have put communities and the nonprofit organizations that serve as their glue, in an untenable situation.

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Ami Dar, executive director of Action Without Borders, in New York, and Idealist.org, a nonprofit jobs site: Over the next few years, a very large number of nonprofit leaders will retire. To help the whole sector find new leadership, the president could make it easier for young people to choose a nonprofit career. This could be done through a national loan-forgiveness program, whereby the federal government would give matching grants to states, cities, and universities that forgave student loans for graduates who want to work in the sector, as well as by giving federal tax breaks to individuals who want to work for organizations serving the poorest communities in the country.

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Janice S. Ellis, president, Partnership for Children, in Kansas City, Mo.: The most important step the president of the United States can take in the coming year is to include nonprofits as part of the national dialogue on the state of our economy. When speaking about the strength or weakness of the performance of the auto industry, health-care industry, and others, the well-being of the nonprofit sector should also be addressed. As a vital part of the service-industry sector, there are 1.4 million nonprofits that employ 12.5 million Americans and contribute hundreds of billions of dollars to the gross national product.

The president could substantially increase the value of the deduction of the contributions made by businesses and individuals to nonprofits. Many nonprofits are grossly underfunded and understaffed to adequately deliver the quality and quantity of services needed.

With the president as a champion of the vital role nonprofits play both in the economy and the quality of life of some of the neediest in our society, nonprofits could gain the support and resources needed to increase capacity, improve productivity, and achieve measurable outcomes. The president, as a national champion, could go a long way to strengthening public interest and understanding, and to restoring confidence in the public's willingness to invest in this important sector of the nation's economy.

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Gloria Guerrero, president of the Rural Development & Finance Corporation, in San Antonio, and founder of the National Association for Latino Community Asset Builders: The president should fully restore money for grant programs that fund community-based nonprofit organizations to develop housing for low-income and other families in rural and urban areas; deliver health care and operate community clinics for families and individuals with special needs in rural and urban areas; establish and maintain community technology centers that provide access to the Internet and computers for children, teens, and adults; and operate programs that address environmental justice in rural and urban areas.

These are existing grant programs that form the social safety net whose funding has gradually eroded over the past decade.

A second step would be to implement new incentives, like tax credits that reward businesses, to build housing for low-income and very-low-income families and to support the work of community-based nonprofits serving underserved communities.

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Irv Katz, president of the National Human Services Assembly, a coalition in Washington that represents social-services groups around the country: The most important step President Bush could take is to establish some balance in his administration between national defense, homeland security, and domestic needs. With the need to get re-elected behind him, the president could focus on the challenges that confront the people and communities in the United States day in and day out.

Domestic issues are barely on the national radar screen, yet they need to be, and it takes a strong president to put them there. With few exceptions, No Child Left Behind and Medicare "reform" among them, investing in people and communities has taken a back seat. We need cohesive strategies for moving people who face challenges -- due to age, income, ability, or other characteristics -- to the highest level of self-sufficiency they can achieve. And we need strategies that enhance the quality of life, from ensuring a safe environment to encouraging artistic expression and appreciation.

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Kim Klein, publisher of Grassroots Fundraising Journal: The most important thing you can do for nonprofits, and indeed for our country as a whole, is to reflect on what faith teaches you. Three examples particularly come to mind. First, the Bible says, "He who gathered much had nothing left over, and he who gathered little had no lack." However, the tax cuts you enacted during your first term produced exactly the opposite effect of this teaching and have contributed to the largest gap between rich and poor our country has ever experienced.

Second, the most common instruction in the Bible is "Be not afraid." However, the way you have fought terrorism has created a culture of fear in our country. Your patriotism is idolatry, and has led to profligate spending on a pointless war. Despite all this, the most important religious principle to remember is that it is not too late to repent and turn around. Turn yourself around in these two aspects and in so doing, you will turn our country around. We of the nonprofit sector stand ready to forgive you and to help you.

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Paul Light, professor at New York University's Robert F. Wagner School of Public Service and a senior fellow at the Brookings Institution: The president needs to spend some time getting to know the sector. During the campaigns, both candidates talked and talked about the great policy issues of the day -- from health care to homeland security -- yet never talked about the sector or its workforce. Nonprofit employees are America's other first responders and deserve an occasional nod of appreciation from the president of the United States.

The president should commit the federal government to a deep investment in strengthening the nonprofit sector's infrastructure. He hardly needs to spend much time developing the proposal -- a quick phone call to Tony Blair will suffice. After all, Britain will spend about £300-million over the next two years to strengthen its sector. The great scandal in the U.S. nonprofit sector is underinvestment in its organizational capacity.

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Eric Mann, chief executive officer of the YMCA of Pittsburgh: The most important thing President Bush can do to help nonprofit organizations serve society better is to put government back on our side so that we aren't working alone. When nonprofit groups have to bear too much of the burden of helping people cope with economic and social pressure, we risk becoming overextended and less effective. We need the cooperation and resources of government to help us help people.

The federal government, and the president, must show leadership on economic and health-care issues. Many middle- and low-income families are in crisis because of the lack of jobs in the current economy. Economic pressure on families leads to problems such as fractured relationships, substance abuse, and even violence. Nonprofit organizations can help families, but we cannot stimulate the economy or spur the creation of jobs.

The high cost of health insurance is causing more and more of the people we serve to go without necessary medical care. The wellness programs we and other nonprofits sponsor in schools and workplaces are an effective, low-cost way to improve our nation's health, but they cannot work properly if people lack access to doctors and medicines.

President Bush will have a great opportunity to improve public education in America in his second term by encouraging contributions from nonprofit organizations. More federal support for state and local programs to utilize nonprofit skills and resources would help us and other nonprofits do more to ensure that every American child receives a first-class education.

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Adam Meyerson, president of the Philanthropy Roundtable, in Washington, a national coalition of grant makers: The vitality of the nonprofit sector depends on the strength of the market economy. Nonprofits derive their revenue from charitable contributions, purchases by customers, and sometimes government contracts and subsidies. Vigorous economic growth generates the wealth and income that make possible generous charitable contributions, robust consumer spending, and a healthy tax base. So the single best step any president can take to strengthen the nonprofit sector is to pursue policies of sustained growth in the market economy. That includes protecting our country from terrorist attacks.

Presidents can also use the extraordinary power of their bully pulpit to inspire and mobilize the American people, including nonprofits, behind great causes. President Bush has the potential to be the most important president in the history of American education -- the president who finally solves our crisis in the education of low-income children. But he cannot achieve this breakthrough simply through the federal No Child Left Behind law, the focus of his first term. Reform of education is going to come primarily from the ground up -- from state and local government, and from philanthropists and social entrepreneurs.

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John S. Ruskay, executive vice president of UJA-Federation of New York: While the president will face many challenges, none is greater than using his office to change the tone of our country. While large segments of Americans live with unprecedented prosperity, huge numbers of American families face the daily struggle to put food on the table, provide support for elderly loved ones, and care for a disabled child.

The president needs to look beyond partisan politics and even beyond which human-services program to fund. Our country needs the president to listen, to inspire, and evoke a broader recognition of gratitude and privilege, which can enable us to hear the cries of those who are in need, close, yet in a different reality.

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Lester M. Salamon, director of the Center for Civil Society Studies at the Johns Hopkins University, in Baltimore: The single largest force affecting the future of the nonprofit sector in this country is not the large charitable foundations or the laws governing the tax treatment of charitable giving. Rather, it is the reimbursement policies built into the huge Medicare, Medicaid, and Supplemental Security Income programs administered by the U.S. Department of Health and Human Services. These programs account for an enormous share of total nonprofit income. They therefore have a powerful influence in determining whether nonprofit organizations can continue to perform the advocacy, community organizing, and related functions that give them their special character.

Recent trends have put a premium on lowest unit cost of service as the chief criterion for setting reimbursement rates. The effect, however, has been to create a powerful disincentive for nonprofits to perform these mission-critical functions.

I would urge the president to undertake a review of current reimbursement policies to see whether they put nonprofits at a disadvantage, and to name a review board to assess how future changes in reimbursement policies and procedures will affect the ability of nonprofit providers not only to compete, but to continue to display the distinctive qualities that give them their special value.

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Paul G. Schervish, director of Boston College's Center on Wealth and Philanthropy: The most important contribution the president can make to the nonprofit sector will be moral, not legislative. The nonprofit sector and its related legislative agenda are organizational tools to help individuals meet the true needs of the people and causes for which they care. If the nonprofit sector is at the heart of the way our society manifests care, the heart of the nonprofit sector is the voluntary dedication of individuals who make care for others a gratifying aspect of their lives. Advancing this moral citizenship of care as a habit of the heart will be the most important contribution of the president. Nonprofit professionals, pastors, and legislators share a role in this moral leadership, but the president's unique pulpit offers him a disproportionately positive potential to animate the voluntary care of our nation's people.

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Les Silverman, director of McKinsey & Company, management consulting firm in New York: Our president should use his "bully pulpit" to set the next nonprofit agenda -- ensuring the sustainability and growth of effective organizations meeting vital community and social needs. He should focus national attention on the stake that all of us have in the ability of demonstrably effective nonprofits to help meet the increasing demands of our needy and aging as public-sector budgets inevitably tighten.

In addition, the president should use his powers to help set a high bar for those who oversee and fund the sector. To this end, he should find ways to encourage nonprofit boards and managers with demonstrated success to raise their aspirations, to back up these aspirations with aggressive strategies, and to ensure effective governance. He should also prod private-sector funders to weigh sustainability and growth more heavily in their decision making. And, of course, he must recognize that the public sector, as the largest provider of funds to nonprofits, has a special role to play. He should commit the federal government, and encourage state and local levels, to rethink policies to encourage the sustainability and growth of organizations that are most successfully meeting vital social needs.

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Don Sodo, president of America's Charities, a federation of more than 100 charities participating in workplace campaigns: As president, take one hour each month to do volunteer work and demonstrate the importance of caring, giving, and helping. Along with your volunteering, write a check to the charity you're helping. Do this in different regions of the country as you travel, and make sure the local and national press talks about your volunteering and financial donations. (Don't worry, we respect your right to choose charities you care most about ... everyone has their favorites.)

That's the "bully pulpit" we need and you can provide. Think about it: If your example can increase giving in America by just 2 percent, that means billions of dollars in new contributions that charities can use to help children, the poor, the elderly, and families in need.

Thousands of charities across our country are desperate for funds and support that can bridge the gap between human need and their capacity to serve. Your visible leadership and regular examples of caring can help us close that gap.

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Trent Stamp, executive director of Charity Navigator, a watchdog group in Mahwah, N.J.: If George W. Bush really cares about America's donors and the charities they support, he should now eliminate the patchwork, state-driven system of regulating charities. It's a system where fraudulent fund raisers are banned from practicing in New York and free to ply their trade in New Jersey.

President Bush needs to know that no plausible argument exists for charities' not being worthy of the type of scrutiny that the for-profit sector warrants. Quite simply, the charitable sector is much too large to allow the continued lack of interest our government has shown it.

The idea that charities consist of a few bleeding hearts serving up soup to the homeless is an antiquated recollection of a day that may never have existed, but certainly doesn't now. Charities are big business. They need to be regulated like businesses. We need a federal Securities and Exchange Commission for charities. The Internal Revenue Service clearly doesn't have the manpower for the job. We need a more thorough review of tax-exempt status. Way too many organizations are being granted this privilege and they're crowding the field for the organizations with the ability to bring about long-term change.

We need regular and more frequent reporting of annual returns. We need an insistence on uniformity of rules for reporting that data. And we need penalties that are actually enforced for organizations that don't provide their data, to taxpayers, on request.

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Thomas Tighe, president of Direct Relief International, in Santa Barbara, Calif.: Dear Mr. President, Millions of our citizens spend a lot of their time and money to support nonprofit activities, ranging from art and zoos to assisting people living in troubled countries from Afghanistan to Zimbabwe.

This great philanthropic tradition exists because Americans act when they see things that should be done that government can't or won't do and for which no profit incentive exists. It's public service done privately.

As tremendous a resource as these nonprofits are to our environment, our cultural interests, and for people who need help, don't assume that they are able or willing to pick up whatever you might wish to divest from the government portfolio.

Outsourcing to nonprofits -- even for a fee -- might seem like a good idea, but resist it. It won't save money and will force them to pursue your mission, not their own, the one that inspired them to act in the first place.

It can also make them an indirect political target for your opponents, a political role most are unwilling and unsuited to play. Plus, many are already stretched trying to absorb governmental functions that have already been offloaded.

Lead by example. Clean up a creek with a leader from the other party, or make a generous donation in honor of the opponent you just beat to his favorite charity.

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Jim Wallis, editor of Sojourners magazine: The role of civil society is key to America's future. The old big- versus small-government argument is no longer the real issue. Rather, the construction of effective partnerships between government and civil society will be the most important thing. And the principle will be this: Every sector does what it does best, and each does its share. There are some things that only government can do, and other things best done by the nonprofit sector.

Therefore, the tax code should make the incentives for charitable giving as generous as possible. That means the highest possible percentages for tax deductions and easy itemizations for every taxpayer, and every other kind of public encouragement to contribute should shape federal and state policies. It also means a more explicit public discussion about the critical need for nonprofit organizations and the great benefits of public-private partnering. But in it all, the goal of partnership must be made clear: not just charity, but the seeking of social, racial, and economic justice as our societal aim.

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Jonathan F. Zaff, president of 18to35, a nonpartisan, nonprofit group in Washington that educates young adults about public-policy issues: The president should provide incentives to encourage innovation in the nonprofit sector.

Compare the situation of a Silicon Valley high-tech entrepreneur and a typical nonprofit social entrepreneur. Venture capitalists provide the financial and intellectual resources to incubate the "big ideas" of the high-tech entrepreneur. With a diverse portfolio, the venture capitalists believe that the successful, revolutionary ideas will lead to a substantial, long-term return on investment.

The social entrepreneurs in the nonprofit sector constantly struggle for essential funding to keep the lights on and the doors open. The perceived luxury of developing innovative, and oftentimes unproven, ideas is a hopeless dream. Indeed, the constant funding hunt that results in tails wagging countless dogs makes it increasingly harder for nonprofits to stay on mission and keep a sustained vision.

While the private sector and federal government provide funding to the biotech, high-tech, and other corporate sectors to pursue the seeds of groundbreaking ideas, they do not provide similar early-stage financing of potentially groundbreaking ideas in the social sector. Funding proven people and programs is understandable and needed. But if the trend is to leave service delivery and ideas generation in the hands of the private sector, then the administration should see the value in minor risk taking when the return on social investment could reform the education system, lift millions out of poverty, deliver safety-net services to all in need, and encourage civic engagement, which benefits us all.

-- Compiled by Lauren Kafka
 
 
   
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