Philanthropy Cannot Serve Two Masters
Religion & Liberty Online

Philanthropy Cannot Serve Two Masters

This week’s Acton commentary looks at the trend by many in the charitable sector to become increasingly reliant on government support. Sign up for the free, weekly Acton News & Commentary newsletter in the form here (right hand sidebar).
The independence of American charities has steadily eroded in recent years as more philanthropic institutions have come to see their mission as one of partnership or collaboration with the government. That’s a nice way of saying, “seeking government dough.” Now, in the throes of a severe economic crisis and budget cutbacks at state and local levels, many charities are in a panic about reduced levels of funding. Anyone with eyes to see could have seen this coming.

A recent report in The Chronicle of Philanthropy spoke of a California budget crisis where “charities there are braced for steep cuts to social services and health care.” In Chicago, one manager of a children’s home said, “We’ve never seen the likes of this.”

The growing dependence of many charities on government support has been accelerated by the federal government’s funding, over several recent administrations, of charitable organizations for managing various social service programs. This funding, its supporters argue, gives private initiative the resources it needs to accomplish good works — with a little extra help from the government. But at what cost?

What the federal funding has done, I fear, is turn too many philanthropic leaders into grant seekers, contract managers and lobbyists. Politicians, in turn, are picking winners and losers based on the self-serving calculations operative in budget negotiations. The result is a complex co-dependency of charity manager, politician and bureaucrat, all working together in the quasi-governmental entity known as the “public-private initiative.”

Smart elected officials and bureaucrats also know that a charitable sector dependent on the public treasury can also be a weighty and useful ally when it comes time to call in the political IOUs. In New York City, the number of people employed by arts, health, and social service agencies now approaches 500,000 with a total payroll of $19.7 billion, according to the Fiscal Policy Institute. Imagine mobilizing this force to advance political ends. Doubtful? Witness the recent flap at the National Endowment for the Arts over charges that the Obama administration was using the agency for political purposes.

We have strayed far from our American tradition of turning first to local, independent initiative to tackle social problems. I am reminded of Tocqueville’s observation, in his 1840 book Democracy in America, about the intensely local focus of social and political life. “What most astonishes me in the United States, is not so much the marvelous grandeur of some undertakings, as the innumerable multitude of small ones,” he wrote. Could Tocqueville have foreseen how eagerly many Americans sign on now for whatever sweeping plan emerges from Washington to “remake” the country?

The growing dependency of charitable work on government favors is also at odds with the great commandment we follow as Christians to, above all, love God and our neighbor “as yourself” (Matt. 22:37-40). We are to follow this commandment without hesitation. It does not require us to first seek a nonprofit tax exemption, a state subsidy, or a plaque from the mayor. Indeed, the history of Christian philanthropy, dating from Apostolic times, shows incredible selfless work — independent of emperor or king — in establishing orphanages, hospitals, hospices and the feeding of the poor from private giving motivated only by love of neighbor.

What is often lost from view today is the fact that most philanthropy is funded with private money. Still, in recent years, some legislators have worked to impose stricter legal limits on charities, expand red tape by adding new reporting requirements, and even suggest that a nonprofit’s tax-exempt status indicates a sort of “public entity” quality. And there’s more. Senators John Kerry and Jay Rockefeller are pushing a proposal to cap deductions taken by Americans in the top tax bracket to 35 percent. The Obama administration wants to cap deductions at 28 percent.

It is a double squeeze: Limit the amount of tax deductible giving that Americans can direct to charities while at the same time making these very same charities more dependent on politicians and bureaucrats.

In a Sept. 23 letter to Senate Finance Committee Chairman Max Baucus, more than a dozen leading charities appealed to him to “protect” the charitable deduction. “Limiting the value of the charitable deduction would hurt these efforts by creating a disincentive for individuals and households who give the most to charitable organizations,” they wrote.

I couldn’t agree more. But we must go beyond political calculations and lobbying efforts. American philanthropy, with its proud history of social service, the innumerable schools, hospitals and private welfare agencies it has built since the nation’s founding, must regain the spirit of independent, self sufficient mastery of its mission to create a more just and humane society. If we don’t regain that spirit soon, we may find ourselves serving not the neighbor in need, but the powers that be.

Rev. Robert Sirico

Rev. Robert A. Sirico received his Master of Divinity degree from the Catholic University of America, following undergraduate study at the University of Southern California and the University of London. During his studies and early ministry, he experienced a growing concern over the lack of training religious studies students receive in fundamental economic principles, leaving them poorly equipped to understand and address today's social problems. As a result of these concerns, Fr. Sirico co-founded the Acton Institute with Kris Alan Mauren in 1990. As president of the Acton Institute, Fr. Sirico lectures at colleges, universities, and business organizations throughout the U.S. and abroad. His writings on religious, political, economic, and social matters are published in a variety of journals, including: the New York Times, the Wall Street Journal, Forbes, the London Financial Times, the Washington Times, the Detroit News, and National Review. Fr. Sirico is often called upon by members of the broadcast media for statements regarding economics, civil rights, and issues of religious concern, and has provided commentary for CNN, ABC, the BBC, NPR, and CBS' 60 Minutes, among others. In April of 1999, Fr. Sirico was awarded an honorary doctorate in Christian Ethics from the Franciscan University of Steubenville, and in May of 2001, Universidad Francisco Marroquin awarded him an honorary doctorate in Social Sciences. He is a member of the prestigious Mont Pèlerin Society, the American Academy of Religion, and the Philadelphia Society, and is on the Board of Advisors of the Civic Institute in Prague. Father Sirico also served on the Michigan Civil Rights Commission from 1994 to 1998. He is also currently serving on the pastoral staff of Sacred Heart of Jesus parish in Grand Rapids, Michigan. Fr. Sirico's pastoral ministry has included a chaplaincy to AIDS patients at the National Institute of Health and the recent founding of a new community, St. Philip Neri House in Grand Rapids, Michigan.