Most such charities rely on a mix of (predominantly) public money - restricted grants and contracts - and modest private support. Many are little more than de facto pass-throughs for government money and as a rule they have a tough time raising private funds.
- They can't build wealthy and powerful boards because there is little to no cachet in board membership. The movers and shakers gravitate to bling, high prestige and major visibility and without leadership by example money doesn't flow.
- Poverty is not attractive; even Mother Teresa wondered if she could really make any difference in the slums of Calcutta. Can we?
- Donors identify more strongly with causes they feel they benefit directly from - like local hospitals, arts organizations, "alma mater" the green movement and so on.
- It is often (wrongly) assumed that government money reaches the poorest of the poor. It may but only if one believes that a melting icicle is the same thing as a mighty stream.
- These charities have not invested adequately in building structure for generating private support, many because they don't have the funds. Others rely on the public funding spigot and put their effort into getting those contracts because public money brings the greatest return. But that money is almost always restricted and what is needed most are unrestricted funds. Most major donors who are not directly involved (like board members) resist providing it because they feel (often rightfully) that there's no real accountability.
Every charitable tax deduction confers the same benefit to the donor. But what if that were not so? What if donations to the neediest human service charities carried a bigger tax deduction and a greater benefit to the donor?
The next post will try to make the case for a sliding tax deduction. Meanwhile if you have a thought you'd like to share, please post a comment.
2 comments:
Fine idea. While we're at it, let's remove the tax exemption for religious organizations.
This post made me think differently about a state agency I used to work for that was basically a pass-through funder of state and federal agencies that fight crime, conduct research into the causes of crime, and develop software to help police agencies fight crime.
The major source of funding was Byrne Grants, which went largely, in Illinois, to domestic violence causes and victims of sexual crimes, along with funding of task forces to fight drug crimes.
When the four-year grants ran out, sure enough, the agencies all came back, hat in hand, because they hadn't found the private dollars to continue their missions.
Depending on your political viewpoint, all these grantees were dealing with virtuous causes, but perhaps the model is wrong?
I do know the Byrne program was recently cut drastically by Bush so the agency I used to work for will be a hurting puppy and not nearly so popular as it once was if it doesn't have the manna to dole out.
Great thought-provoking blog, Hank!
Sharon
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