This article was an unusual one over at Reason:
The Politics of Giving
The Philanthropy Roundtable’s Adam Meyerson talks about the future of charity, power grabs by the IRS, and pressures to create a nonprofit cartel.
A longish article, it talks about the changes in giving, especially in the large organizations. A disturbing trend (other than the continuing professionalization of charity) is an accelerating trend by the Obama Administration to muscle government more into that space – "government everywhere"? Also, as we see in the private sector where companies are, more and more using Government (i.e., laws and regulations) to hamper their rivals, the same is starting to show up in the philanthropic space as well.
A bit here (emphasis mine):
reason: In many cases, government and philanthropy can be seen as substitutes for each other. They’re often competing to service the same needs, be that the public provision of arts or charity to the poor or a service helping immigrants assimilate. Do you think that rivalry intensifies as government steps into an ever-larger role in these intermediate spaces? Is there a sense that government is pushing charity from some places where it has traditionally been?
Meyerson: We do frequently see a kind of crowding out phenomenon in which donors or philanthropists decide to withdraw from a particular field if government is taking care of it. But we frequently see a contrary development as well, which is that government is not always very good at what it does and so the problems aren’t always solved. For instance, in the field of K–12 education there’s $500 billion of government spending. And yet we’re seeing more and more new philanthropists come into that field pushing ideas of choices and competition and high standards and new models of recruiting and compensating teachers and principals. Even in a field that’s tremendously dominated by government, you see philanthropists coming in to find solutions for problems, such as the education of low-income children, that were not being solved by government.
The logical question to be asked would be – should Government be expanding its reach even as it is being shown that it is not succeeding where it traditionally has been?
We see this in the field of medical research as well, which is overwhelmingly dominated by government. Smart philanthropists are finding that they can have an enormous contribution by pursuing alternative hypotheses or doing things that government is not doing.
The arts are an interesting space. We have seen a growth of government funding in the arts in recent decades, but even so one of the distinguishing features of the arts in America is that it’s mostly funded by the market and by private contributions, much more by comparison with Europe. It has probably led to there being greater cultural vitality in the United States now than in many European countries.
And as we saw early in the Obama Adminstration, the National Endowments for the Arts was quickly politicized – and is that a good thing for that sector?
reason: Obama made service and volunteerism a centerpiece of his campaign. He has tried to facilitate charitable activity and has spoken of putting public money into charities that work. What do you make of that?
Meyerson: He’s following in a tradition of some of his predecessors, including his immediate predecessor. The rhetoric, at least so far, has been larger than the amount of dollars that they’ve committed. We think there’s a danger in trying to bring the private charitable sector under the control of government. It can be very self-defeating and even suicidal to become too dependent on government money. I think it’s important for philanthropists to develop alternative ways besides government funding of expanding successful private-sector programs. That’s a failure within the philanthropic sector right now: It’s very hard to take a really good program and scale it up. But government funding is not the answer to that.
Dependency upon Government? Once again, moral hazard is not just with individuals.
