Will recovery effort dilute Obama’s giving-sector strategy?

By Todd Cohen

While mildly optimistic the Obama administration can build a true partnership with the giving sector to take on America’s toughest social problems, a leading scholar of the sector fears the massive job of reviving the failing U.S. economy could limit or even doom the hope for that collaboration.

“My great fear is that the economic recovery will become Barack Obama’s Vietnam War, and will drive out the resources and attention and political capital that could be used for a whole variety of promising possibilities that relate to the nonprofit sector,” says Lester Salamon, director of the Center for Civil Society Studies at Johns Hopkins University.

Salamon helped organized a two-day meeting Jan. 13 and 14 at which roughly a dozen nonprofit and foundation leaders reviewed recently-circulating proposals on a policy agenda for the giving sector in working with the new administration.

Participants at the gathering, held at the Rockefeller Brothers Fund’s Pocantico Conference Center in Tarrytown, N.Y., included a nonprofit consultant who has been involved in the transition but was not there representing it, Salamon says.

All participants were assured they would be speaking as individuals and not necessarily as representatives of their organizations, he says.

He declined to identify participants but says they represent nonprofit intermediary organizations that have nonprofit and foundation members.

Within two weeks or so, he says, the group should release its recommendations.

While he would not discuss details until the recommendations are released, Salamon says everyone who attended received a policy-agenda document he had prepared that drew on the work of the Listening Post Project at the Center for Civil Society Studies.

That effort has been tracking the views of grassroots nonprofits and collecting empirical data on nonprofits and the operating and policy issues they face.

During the election campaign last fall, the project issued a communiqué that summarized nonprofit executives’ ideas about policies the new president should pursue to address America’s big social problems.

While he would not provide a copy of the eight-to-10-page policy document he prepared, saying some of its ideas likely will be included in the new recommendations, Salamon says that document reflects many of the findings of the Listening Post Project.

Citing a recent article he wrote for The Chronicle of Philanthropy addressing one of the big issues the document addresses -- the role the nonprofit sector can play in efforts to fix the economy -- he says nonprofits can be involved in those efforts in three broad ways.

“It’s an incredible delivery system that should be part of the recovery program,” he says.

In the face of proposals for a big increase in federal funds for emergency services, for example, Salamon says those funds should flow though groups like local United Ways and community foundations to nonprofits that provide direct services.

He also calls for matching grants nonprofits could match with volunteer hours, a strategy he says could help mobilize citizens in the recovery effort, including those who are unemployed.

Separately, he says, he has suggested to members of the Obama transition team a specific vehicle for handling funds for emergency food and housing programs.

Mortgage relief also is the focus of his recommendations for addressing nonprofits’ role in the economic recovery, Salamon says.

The national network of low-income housing groups and housing-finance institutions, for example, could serve as a vehicle to help work out problem mortgage loans, he says.

“These organizations have enormous track records and experience dealing with low-income mortgage borrowers,” he says. “They’ve got experience in how to structure loans for low-income persons that would be an excellent use” of funds distributed through the government’s massive Troubled Assets Relief Program, known as TARP.

Salamon's third set of recommendations on nonprofits’ role in the economic recovery address emergency incentives for charitable giving and volunteering “that would help bring extra hands into this recovery effort,” he says.

In one controversial proposal, he says, he calls for temporary suspension of the excise tax on foundation earnings if foundations in return increase their grants to direct-service organizations above the five percent of their assets they are required to pay out.

He says he is “mildly optimistic” the Obama administration will develop strategic policies to foster greater collaboration with the giving sector and spur more charitable giving and volunteering.

Having worked as a community organizer, Obama “understands community institutions and nonprofits,” Salamon says, and the incoming administration seems to recognize “the potential of nonprofits to improve policy and improve ways in which we solve public problems in this country that is refreshing and unusual.”

The new administration also has an “apparent openness to a set of ideas that connect to the nonprofit sector very directly” and with a perspective “that really takes account of the actual operations of nonprofits and doesn’t go off on ideological diversions.”

The outgoing Bush administration has had the “ideological perception that the sector is a substitute for government, that government can back off and nonprofits and volunteers and philanthropy can fill the gap,” Salamon says. “It was not truly a partnership.”

The incoming administration, in comparison, has a “better sense of government as a true partner of the sector,” he says.

But he cautions that his appraisal is “still speculation and vulnerable to the pressures that are going to arise and already are arising from the demands of the economic recovery.”