Hyperbole 101: Charitable Sector as Wild West

Posted on by Nina Stack, Council of New Jersey Grantmakers President

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There was a piece in the New York Times two weeks ago that has caused quite a stir within the philanthropic sector.  My colleagues within regional associations of grantmakers as well as other colleagues representing philanthropy and nonprofits around the country have been quite proactive in responding to what has generally been seen as a commentary that is at best ill-informed and at worst disingenuous.

Nina Stack

Nina Stack

Who Will Watch Charities? was written by the founder of a fairly new website/blog journal called Inside Philanthropy, David Callahan. In his piece, Mr. Callahan conflates different types of charities with private foundations and individual donors.  He claims the charitable sector – the entire of the sector it seems — is like the Wild West, a term that brings to mind an image of rampant lawlessness.  Certainly dramatic language… and one that serves no legitimate purpose in discussing the social sector and recommending improvements.

Since the piece came out there have been a number of varied and thoughtful responses that strike me as far better informed and definitely worth a read.

First and foremost is Phil Buchanan from the Center for Effective Philanthropy – A Misguided Call for Reform. Among the more disturbing recommendations made by Mr. Callahan is the suggestion that there is a hierarchy of “worthiness” (my phrase, not his) of causes that philanthropy supports and nonprofits work to address.  This is the belief that some charities are more deserving than others. Callahan also suggests that the IRS or some other federal oversight agency should determine “public benefit.”

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Buchanan rightly asks…do we really want to hand over judgment about relative worthiness to a central government authority? Is a charity or foundation working to ensure convenient access to safe abortions providing a public benefit? Is a charity or foundation working to ensure clean water providing a public benefit? Is a charity or foundation working to educate the public and stakeholders about policy issues impacting their state providing a public benefit?  Eye of the beholder certainly comes to mind as well as a citizen individual’s perception of public good.

I’m also struck by the response from the National Council of Nonprofits by Tim Delaney. In Muddled Misunderstandings Lead to Misguided Reforms, Delaney provides four “fact-based solutions” to “protect the public and legitimate charitable nonprofits from abusive behavior by nefarious individuals.” Among these an issue that the CNJG Leadership and Policy Committee has long been concerned with – funds collected via the Foundation Excise Tax should be used for their intended purpose to strengthen the sector as opposed to being diverted into the general fund.

Finally, I invite you to read the many thoughtful and fully informed responses from regional foundations throughout the country – from Philanthropy New York to the Florida Philanthropy Network to the Connecticut Council for Philanthropy and Washington Regional Association of Grantmakers.

Perhaps all this debate further brings home what the philanthropic sector has known for some time: philanthropy must get better at telling its stories to the public and to stakeholders. Not only should these stories include the impact of grantmaking, but also that foundations provide a small percentage of all giving in the United States. Most giving is provided by individuals. AND both the nonprofit and philanthropic sectors must get better at helping the public and stakeholders understand the work of social sector and the nonprofit business model in general.

I end with the letter the Forum of Regional Associations of Grantmakers wrote in response to this article. The Council of New Jersey Grantmakers is one of 33 regional associations that is a member of the Forum. And I concur fully with this informed letter.

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To the Editor:

We applaud the state attorneys general and other regulators for cracking down on fraud by four charities highlighted in David Callahan’s May 30 Op-Ed (Who Will Watch the Charities?). The case he cites answers his own question and confirms the oversight process for the charitable sector is working.

Representing 5,500 organizations nationwide, our network of regional philanthropic associations works with state charity officials and nonprofit associations on effective governance, finance, administration and grantmaking for our member foundations and the thousands of nonprofits they support.

Our communities’ needs are great, and while fraud must be exposed and laws enforced, the charitable sector has a long history of effective partnerships with government.  Callahan’s over-statement of the problem and confused recommendations are not helpful.  Frankly, we believe government should do more to encourage charitable giving.

Americans have the freedom to support charities of their choice, without government determining which are more worthy.  We must strengthen that tradition of U.S. philanthropy – not undermine it – to meet the challenges that limit opportunities for all to succeed.

David Biemesderfer, Chair, and
Mary O’Neill, Interim Director
Forum of Regional Associations of Grantmakers
1200 18th Street NW, Suite 700
Washington, DC 20036

 

Nina Stack is President of the Council of New Jersey Grantmakers, the statewide association of more than 130 funding organizations working in New Jersey. She also serves as a Board Member of the Forum of Regional Associations of Grantmakers, a 33-member network serving more than 4,000 foundations, corporations and other donors across the country. Nina is a regular contributor to the Dodge Blog. 

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