In the last couple of weeks, it’s become clear what happens when heads of charities play politics and when politicians play at charity: Everyone’s hands get dirty.
Start with the latter. It recently came out that Gov. Cuomo’s $17 million Empire State Relief Fund — established to help Sandy victims — is being run by four of his top campaign fund-raisers.
As The Wall Street Journal first reported: “None [of the four] have disaster-relief experience. On the fund’s Web site, donors were directed to send checks to Richard Sirota, a private investor and consultant who is Mr. Cuomo’s 2014 re-election campaign treasurer.” Just promise to keep the money in separate piles, OK?
Charity watchdogs pointed out that it might be a good idea to have some experts in charge — and that Cuomo’s fund is competing for fund-raising dollars with charities that do know what they’re doing.
And, of course, New Yorkers are all too familiar with politicians actively looting nonprofits they run — with state Sen. Pedro Espada’s only the most prominent recent criminal conviction on such charges.
Ah, well. Such is “the porous boundary between government and philanthropy,” as Hudson Institute scholar William Schambra calls it. Indeed, politicians nationwide increasingly seem to have a controlling interest in the nonprofit sector, even traditional charities.
According to the Nonprofit Almanac, in 2010 public charities got 8 percent of their revenue from government grants and 24 percent from fees for services and goods from government sources. For nonprofits in the category of health or human services, more than half of their money comes from government sources, reports the National Center for Charitable Statistics.
Which gives government a lot of leverage. Last week, leaders of major nonprofits were asked to support President Obama’s tax plan. In a meeting with at the White House, senior officials told the leaders of such groups as the Red Cross and Catholic Charities that if Obama doesn’t get his higher tax rate on the wealthy, the result would be severe cuts to discretionary spending. Hint, hint.
Diana Aviv, president of the group Independent Sector, was at the meeting and insists that there “was no quid pro quo.” Rather, she says, they made the case that “we, like you, are committed to serving a variety of causes and helping most vulnerable members of society and we believe that we shouldn’t cut so deeply. If you believe that, you should be involved in this debate.”
Independent Sector gets no government funding, but the groups it purports to represent sure do. It had previously said it wasn’t going to wade into the fiscal-cliff debate but did an about-face after this meeting, announcing support for a tax hike on the top 2 percent.
Aviv says she pressed her case with Obama’s advisers for maintaining the charitable tax deduction (he’s said he’d favor reducing it). The aides were noncommittal.
Other nonprofit leaders have tried to stay out of the tax debate. The Philanthropy Roundtable favors keeping the charitable deduction but doesn’t believe “nonprofits should be pulled into this wrangling” over tax rates, says spokesperson Alison Hawkins.
Still, it’s tough for many to stay away. As Schambra notes, leaders in the nonprofit sector have been increasingly pressing charities to do advocacy. He tells me that nonprofit leaders are being “incredibly naïve.” They think this is a “one-way street,” where “public spirited nonprofits bring their influence to bear on selfish politicians to do the right thing” — but politics “is a two-way street. You can bring your influence to bear, but don’t think the politicians aren’t going to say it’s time for payback.”