Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

January 12, 2009

Power politics in the giving sector



By Todd Cohen

The scrum is intensifying within the giving sector for clout with the Obama administration.

Groups and coalitions like Independent Sector, the National Council of Nonprofits, the Johns Hopkins Center for Civil Society Studies, America Forward and Service Nation have weighed in with ideas the administration should consider in addressing the needs of nonprofits and giving.

Two separate groups of nonprofit leaders reportedly are set to meet this week, one on Monday, apparently with the Obama transition team, and another on Tuesday and Wednesday, possibly with at least one member of the team or someone close to it.

The focus of both meetings is to develop and promote a nonprofit agenda.

According to sources, those meetings may include consideration of:

* A plan Independent Sector has circulated privately for a $15 billion “bridge loan” program the federal government would administer “with loans disbursed to eligible nonprofits through a network of qualified financial assistance providers.”

* A proposal by Service Nation for $3 billion in stimulus spending for nonprofits.

* A proposal by Johns Hopkins for public funding to build the capacity of nonprofits.

* A possible new office in the Obama administration that will focus on social innovation.

The press office for the Obama transition team has failed to return repeated phone calls about its plans for addressing the needs of the giving sector.

Nonprofits should indeed be pushing the incoming administration for a greater voice in helping to shape the policies that affect nonprofits and the communities they serve.

But as has too often been the case in the giving sector, the voices dominating the conversation are big nonprofits, big foundations and the big trade groups that represent them.

And the increasingly powerful class of social entrepreneurs that has emerged in the last decade seems to have been particularly effective at catching the ear of the Obama team.

Lost in the scramble for power by the giving sector’s power brokers seems to be the voice of smaller nonprofits, which make up the bulk of a sector that represents five percent of gross domestic product in the U.S., 10 percent of its workforce and the best hope for addressing our biggest social problems and their root causes.

What seems to be cracking wide open is a longstanding fault-line in the giving sector, with big nonprofits, big foundations and social entrepreneurs positioning themselves to push the new administration to adopt a giving-sector agenda that mainly rewards big nonprofits, big foundations and social enterprise.

Falling into the abyss will be what America really needs – an Obama agenda that addresses the urgent social problems most nonprofits are struggling to address, and the critical operating challenges they face.

And while President-elect Barack Obama’s pledged emphasis on volunteerism and public service will be essential to help address those problems and challenges, it runs the risk of perpetuating a giving-sector mindset that for far too long has treated nonprofits as an underclass that should swallow low wages and hand-me-down resources.

Solving America’s big social problems will depend on a thriving giving sector.

That will require regulations that promote a charitable marketplace that is fair, that requires nonprofits and foundations to be more open, and that increases, from 5 percent, the share of assets foundations must pay out each year for grants and overhead.

It also will require that any government spending or incentives for the giving sector be inclusive and give all nonprofits, not just big ones, access to the resources and tools they need to compete and operate effectively in developing and delivering programs, strategies and policies that will make our communities be better places to live and work.

All nonprofits should get an equal shot at whatever government funds or incentives are available to build their capacity and help them operate.

So the critical role of distributing those funds should not be handed to the big trade groups that represent big foundations and big nonprofits, often to the exclusion of smaller nonprofits, an exclusion that limits their ability to address the challenges they face and the needs of their constituents.

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