November 04, 2008
Charities Urged to Move Quickly to Influence Next President
By Suzanne Perry
Washington
Nonprofit groups should act quickly following today’s election to convince the new president and Congress to bolster the ability of charities to tackle the nation’s social problems, speakers at a panel here said today.
“Nonprofits need to be at the table and they need to be exercising their advocacy muscles,” said Shirley Sagawa, a nonprofit-strategy consultant who served in the federal government in positions appointed by both President George H.W. Bush and Bill Clinton. Ms. Sagawa said she hopes the new administration will pledge to pass the Serve America Act, a bill to expand the country’s national-service programs and funnel money to innovative charities, within the first 100 days.
The panel, sponsored by the Urban Institute, discussed the post-election pressures that will face nonprofit groups as the country’s economic crisis threatens to eat into their revenues while increasing demand for their services.
Potential Job Cuts
Paul Light, professor of public service at New York University, said the situation could force many nonprofit groups to “survive on the edge” — for example, cutting back on workers or pay. It could also convince grant makers to take a “winnowing approach” and allow some charities to die, he said.
But under a third scenario, he said, nonprofit groups could use their voice during the new administration’s transition period to argue that they need government help. “One of the things we’re not talking about very aggressively is how to help distressed nonprofits,” he said.
Mr. Light said nonprofit groups would find a sympathetic ear in Sen. Barack Obama, the Democratic nominee, if he wins the election. However, he warned that the new federal agency to help charities that the Democratic candidate has proposed — the Social Entrepreneurship Agency — could be politicized by post-Obama administrations. “Don’t create it unless you want to live with it for 100 years,” he said.
The economic crisis will affect nonprofit groups differently, said Tom Pollak, program director of the Urban Institute’s National Center for Charitable Statistics.
He said the stock market’s “unprecedented volatility” is bound to make donors wary. However, only 20 percent of nonprofit groups (excluding religious congregations) get at least 80 percent of their revenue from private contributions, he said. So the overall impact “is likely to be muted although severe for organizations that depend on them,” he said. Organizations that rely heavily on government contracts and fees, however, could suffer from spending cuts in the 39 states that are facing budget shortfalls this year or next year.
If Senator Obama wins, his tax proposals may help to stimulate charitable giving, said Roberton Williams, principal research associate at the Urban Institute and Brookings Institution’s Tax Policy Center. The senator’s proposal to increase income taxes for families making $250,000 a year or more could increase giving among those affected by 4 percent to 8 percent by increasing the value of the charitable tax deduction, according to rough estimates, he said.
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Actually, before we go advocate for non-profits and the things we care about, perhaps those of us who identify as being in the citizen sector should take this moment to pause and re-connect with what it is we are ultimately attempting to do.
Maybe we ourselves should re-define our tools and tactics in this new day and in the midst of a number of profound challenges. The opportunity of Obama’s presidency and his call to rise above partisanship is more than simply a chance to bolster our individual causes and organizations in light of what may be a more receptive administration. We should first stop to reflect upon the array of issues we care about and consider how beyond our own organizational agendas we might better partner with the business community, make use of our own assets most effectively (the 95% foundations invest for financial performance alone, for example) and whether, in fact, we have the courage to rise above the strategies/tactics we have executed during a period of partisanship to create new, yet more powerful approaches to advancing sustained impact and change in our world.
The new administration will inherit budget limits and international demands (among many other things…) that will require we do more than simply speak louder for our issues.
Yes, let’s certainly be engaged and, of course, we should promote the solutions we feel will work best —but lets not assume that in this new opportunity we have already created the best partnerships, ideas and innovations to the problems that have plagued us for years…
— Jed Emerson Nov 5, 01:17 PM #
Great thoughts Jed.
— Richard Shaw Nov 5, 02:24 PM #
Jed’s right, though I’d put it differently. Since the cupboard is bare and our standing as a sector is not (yet) high on the food chain we have to face the likelihood that our budgets are going to suffer, direcly through contributions or indirectly through federal contracts sent down through the states.
This calls for our willingness to be ready to do a quid pro quo, prioritizing what we have to have and what we will do to maintain it. On the foundation side, more mission-based investing, loan guarantees, etc., would improve our lot on the supply side. So would be some greater transparency about how funders are choosing to do their triage.
Without doing our own net-zero calculations and coming up with our own “best” scenario, we’ll see an unstoppable diminishment of funds from all sources.
– Ed Skloot— Edward Skloot Nov 5, 02:30 PM #
Jed,
Well said. Perhaps nonprofits (particularly those focused on human services) need to take this opportunity to focus on our most important role – responding to and working to end injustice.
Instead of focusing on our own survival, perhaps we should step back and take a moment to focus on the survival of those we serve. We have an opporunity to address the root causes of poverty, inequality and injustice and work to end those so there is less demand for our services and more justice in our world. Now that is change I can believe in.
— Julie Nov 5, 04:34 PM #
Hi Julie,
I agree fully with you.
— Erlinda Nov 6, 09:59 AM #
If I understand him correctly, Mr. Skloot calls for foundations to do more in this time of need through mission based investing. What will happen to mission based investing as endowments shrink and market volatility continues? Will this great experiment disappear? What persuasive arguments in favor of mission based investing can nonprofits make to encourage foundations to continue this type of investing?
Vicky Stein
— Vicky Stein Nov 6, 02:33 PM #