March 5, 2009, The New York Times — Like many for-profit companies, charities are seeking help from the government, and they are upset that policy makers do not understand how much the recession has hurt them.
Last week, nonprofit leaders representing thousands of organizations across the country signed on to a manifesto that calls on political leaders to support the work of nonprofits.
“One of the messages of this declaration is that the partnership between us and the government isn’t working, and that’s not good for the country,” said Lester M. Salamon, director of the Center for Civil Society Studies at Johns Hopkins University and author of the manifesto, titled “Forward Together: Empowering America’s Citizen Sector for the Change We Need.”
President Obama’s budget proposal came as a slap in the face to many nonprofits, which had thought they had a friend in him because of his early work as a community organizer.
The administration has also asked nonprofit leaders to serve on advisory panels and called on Americans to do volunteer work.
While the Independent Sector, a nonprofit trade association in Washington, has proposed increasing tax deductions for donations to nonprofits, the Obama budget calls for limiting such deductions for the most wealthy.
Diana Aviv, chief executive of the organization, has been making the rounds on Capitol Hill and at the White House, pushing ideas that would buoy nonprofits, including a bridge-loan fund to help strapped charities and eliminating the excise tax that foundations pay on their investment income so they will have more money to give away.
“We heard from lots of staff people on the Hill that some of them were getting tired of nonprofit organizations coming to them with their hands out when they were working on the stimulus package,” Ms. Aviv said. “They felt it was unseemly — now, how are we supposed to respond to that?”
In a blog post, Peter R. Orszag, director of the Office of Management and Budget, defended the proposal to limit the tax break for charitable donations by the rich, noting that it would not take effect until 2011, presumably after the economic crisis has passed. He also said it was a matter of fairness.
“If you’re a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150,” Mr. Orszag wrote. “If you are Warren Buffett or Bill Gates and you make that same donation, you get a $350 deduction, more than twice the teacher.”
(Actually, Mr. Buffett’s overall tax rate was somewhere around 17 percent, according to his testimony before Congress, and thus his deduction would be less than the teacher’s. Mr. Gates has not disclosed his tax rate.)
Many of the organizations that provide the services most in demand rely heavily on government financing through community block grants, Medicaid and many other federally financed, state-administered programs.
But these days, states are taking longer to reimburse nonprofit groups for the services they provide under contract. At the same time, banks are reducing access to or withdrawing lines of credit, and donations.
Some portion of the money allocated for increased Medicaid spending and community block grants in the economic stimulus package will flow to nonprofits, but so far, Congress appears unmoved by the various suggestions nonprofit groups themselves are making.
The Center for Civil Society Studies at Johns Hopkins, for instance, pulled together a list of some $10.6 billion in “shovel ready” projects at nonprofit organizations, items as varied as a youth center in San Antonio and a theater in New Hampshire.
The White House supported the Independent Sector’s concept of a nonprofit bridge-loan fund, nonprofit leaders said, but the House Appropriations Committee rejected the idea.
A spokeswoman for the committee did not return a call seeking comment.
Senators Charles E. Schumer, Democrat of New York, and Charles E. Grassley, Republican of Iowa, introduced an amendment to the stimulus bill that would have allowed charities to reimburse their volunteers at a higher rate for mileage, and Mr. Grassley proposed requiring states to pay nonprofits what they owed them before receiving any additional money through the bill. Those provisions, however, were dropped.
Peter Goldberg, chief executive of the Alliance for Children and Families, an association for nonprofit social service providers, said a large part of the problem was that while organizations have morphed into government contractors, more akin to highway construction companies and military contractors, Congress and the public continue to think of them as charities supported by private donations and volunteers.
“The government needs to understand that, for better or worse, it has bought a substantial chunk of the nonprofit, human-services delivery system through its contracts,” Mr. Goldberg said. “It therefore has a vested interest in making sure the system functions, particularly at a time like this.”
Not everyone in the nonprofit sector, however, agrees that government needs to do more.
Pablo Eisenberg, a scholar at Georgetown University who is normally a champion of nonprofit groups, said he would not sign on to the “Forward Together” document because he believes wealthy foundations should be doing more to support those groups.
“Nonprofits need to first look to their own community to help them out before asking the government to pitch in,” Mr. Eisenberg said.
Charities Say Government Is Ignoring Them in Crisis
March 5, 2009, The New York Times — Like many for-profit companies, charities are seeking help from the government, and they are upset that policy makers do not understand how much the recession has hurt them.
Last week, nonprofit leaders representing thousands of organizations across the country signed on to a manifesto that calls on political leaders to support the work of nonprofits.
“One of the messages of this declaration is that the partnership between us and the government isn’t working, and that’s not good for the country,” said Lester M. Salamon, director of the Center for Civil Society Studies at Johns Hopkins University and author of the manifesto, titled “Forward Together: Empowering America’s Citizen Sector for the Change We Need.”
President Obama’s budget proposal came as a slap in the face to many nonprofits, which had thought they had a friend in him because of his early work as a community organizer.
The administration has also asked nonprofit leaders to serve on advisory panels and called on Americans to do volunteer work.
While the Independent Sector, a nonprofit trade association in Washington, has proposed increasing tax deductions for donations to nonprofits, the Obama budget calls for limiting such deductions for the most wealthy.
Diana Aviv, chief executive of the organization, has been making the rounds on Capitol Hill and at the White House, pushing ideas that would buoy nonprofits, including a bridge-loan fund to help strapped charities and eliminating the excise tax that foundations pay on their investment income so they will have more money to give away.
“We heard from lots of staff people on the Hill that some of them were getting tired of nonprofit organizations coming to them with their hands out when they were working on the stimulus package,” Ms. Aviv said. “They felt it was unseemly — now, how are we supposed to respond to that?”
In a blog post, Peter R. Orszag, director of the Office of Management and Budget, defended the proposal to limit the tax break for charitable donations by the rich, noting that it would not take effect until 2011, presumably after the economic crisis has passed. He also said it was a matter of fairness.
“If you’re a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150,” Mr. Orszag wrote. “If you are Warren Buffett or Bill Gates and you make that same donation, you get a $350 deduction, more than twice the teacher.”
(Actually, Mr. Buffett’s overall tax rate was somewhere around 17 percent, according to his testimony before Congress, and thus his deduction would be less than the teacher’s. Mr. Gates has not disclosed his tax rate.)
Many of the organizations that provide the services most in demand rely heavily on government financing through community block grants, Medicaid and many other federally financed, state-administered programs.
But these days, states are taking longer to reimburse nonprofit groups for the services they provide under contract. At the same time, banks are reducing access to or withdrawing lines of credit, and donations.
Some portion of the money allocated for increased Medicaid spending and community block grants in the economic stimulus package will flow to nonprofits, but so far, Congress appears unmoved by the various suggestions nonprofit groups themselves are making.
The Center for Civil Society Studies at Johns Hopkins, for instance, pulled together a list of some $10.6 billion in “shovel ready” projects at nonprofit organizations, items as varied as a youth center in San Antonio and a theater in New Hampshire.
The White House supported the Independent Sector’s concept of a nonprofit bridge-loan fund, nonprofit leaders said, but the House Appropriations Committee rejected the idea.
A spokeswoman for the committee did not return a call seeking comment.
Senators Charles E. Schumer, Democrat of New York, and Charles E. Grassley, Republican of Iowa, introduced an amendment to the stimulus bill that would have allowed charities to reimburse their volunteers at a higher rate for mileage, and Mr. Grassley proposed requiring states to pay nonprofits what they owed them before receiving any additional money through the bill. Those provisions, however, were dropped.
Peter Goldberg, chief executive of the Alliance for Children and Families, an association for nonprofit social service providers, said a large part of the problem was that while organizations have morphed into government contractors, more akin to highway construction companies and military contractors, Congress and the public continue to think of them as charities supported by private donations and volunteers.
“The government needs to understand that, for better or worse, it has bought a substantial chunk of the nonprofit, human-services delivery system through its contracts,” Mr. Goldberg said. “It therefore has a vested interest in making sure the system functions, particularly at a time like this.”
Not everyone in the nonprofit sector, however, agrees that government needs to do more.
Pablo Eisenberg, a scholar at Georgetown University who is normally a champion of nonprofit groups, said he would not sign on to the “Forward Together” document because he believes wealthy foundations should be doing more to support those groups.
“Nonprofits need to first look to their own community to help them out before asking the government to pitch in,” Mr. Eisenberg said.