It’s the [Nonprofit] Economy, Stupid.

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Economic Stimulus: The economic stimulus bill that staggered through Congress recently somehow missed the role of the nonprofit sector with its 7.2 percent share of the nation’s employment. Would other nations debate economic stimulus without consideration of the role of their “voluntary sector” organizations? We think not. The debate among economists concerned what actions and what investments would actually jumpstart the increasingly moribund U.S. economy, and nonprofits should have a lot to say about that. But some national nonprofit trade associations viewed the nonprofit role more narrowly than they might have, suggesting that the stimulus package add in an extension of the IRA charitable rollover and do something to enhance charitable donations of food. That struck us as odd. There are lots of good debate points for charitable giving incentives, but they don’t fit the elements of what goes into economic stimulus legislation. So this issue of CR includes some touchpoints about the nonprofit sector’s role in economic stimulus.

Endowment Spending: The January issue of CR reviewed a report on a few foundations willing to go above the 5 percent minimum spending requirement, the private foundation mandatory “payout” floor that many foundations have turned into a spending ceiling. But private foundations are not the only large institutions with billions of dollars in tax exempt endowments. The Senate Finance Committee under Montana’s Max Baucus and Iowa’s Charles Grassley have turned their gaze to the payouts of nonprofit university and hospital endowments, particularly the former. The big universities sit on so much and pay out so little that they make 5 percent payout foundations look like spendthrifts. A little Senate attention has caused a couple of the elite universities to make some changes in their payouts, though it is unclear how much of this is legitimate policy change or simply blindingly moving the cards around the table like a game of three card monte.

Who Benefits: On the hospital side, we couldn’t have been more impressed with the stories emanating from CBS 11 News KTVT-TVin Austin, Texas, not simply because the reporter called on CR for some on-air commentary. The reporter stumbled across information suggesting that the nonprofit hospital was providing a different level of attention and indulgence to people of wealth and status. The hospital — UT Southwestern — has been less than happy with the reporter’s dogged pursuit of the facts behind policies and expenditures that most of us wouldn’t imagine occurring at a nonprofit hospital. A for-profit hospital, maybe, but a nonprofit? No wonder state attorneys general, the U.S. House of Representatives, the U.S. Senate, and the Internal Revenue Service have been questioning exactly how nonprofit some nonprofit hospitals really are. With a peek at the UT Southwestern scandal, this CR further sharpens the point to that question.

Tell us what you think. What should the nonprofit sector be adding to the economic stimulus policies of Congress and the White House that would constitute real stimulus? Should nonprofit universities have a minimum payout requirement like private foundations? Is there something wrong with the UT Southwestern practices of offering an “A-list” of patients special access and providing expensive — we mean expensive! — party favors for wealthy donors? CR would like to know.

Rick