Do Nonprofits Care About Equity?

March 5, 2012; Source: Huffington Post

The always straight-talking Pablo Eisenberg wrote a blog for the Huffington Post last week challenging nonprofits on their response, or lack thereof, to “a society increasingly divided over ideology, class and financial scarcity.”

He begins by talking about fraud and embezzlement and other nonprofit scandals which empty the coffers and erode the faith of the public in nonprofits and he calls for more regulation. But in the next breath he points particularly to excessive CEO salaries, especially at hospitals and colleges/universities. Such salaries are especially egregious, he says, in the face of high tuition and health care costs, but he also calls to account large foundations, health charities, and big social service organizations.

Says Eisenberg, “Such high salaries are in part the fault of the IRS, which has been too vague about what level of pay is acceptable and too unwilling to penalize organizations that pay overly generous salaries. States have shown some interest in cracking down, and bills have been floated in several places to cap nonprofit salaries. But this is not just the responsibility of government. Nonprofit boards need to stop approving such high pay at a time when money is so scarce and seek greater equity in pay among all workers.”

Eisenberg also criticizes philanthropy for giving in a way that widens, instead of narrows, economic inequity, saying that “most of the superrich give to colleges, hospitals, and the arts, leaving very little for other nonprofits.” He suggests that “nonprofit coalitions like Independent Sector and the National Council of Nonprofits should devote more energy to putting pressure on foundations and other donors to give more to organizations that serve people hit by hard financial times.” Why is this not a given?

Additionally, Eisenberg criticizes the Obama White House for focusing on social innovation projects that touch very few nonprofits instead of using “its bully pulpit to encourage foundations to spend more and urg[ing] Congress to force greater giving by increasing the minimum share of assets grant makers must distribute.” He does, however, congratulate the administration on its appointment of Cecilia Munoz, former vice president for the national council of La Raza, as director of the White House domestic policy council.

He also suggests that nonprofit advocacy on the charitable tax deduction has been a misdirection of energy, saying that, “By contrast, leading nonprofit groups have done little or nothing to protect vital social and economic programs that have been put at great risk as Congress grapples with ways to rein in the deficit. Many nonprofit coalitions seemed more concerned with their narrow self-interest and greed than in the national interest.”

In the end, Eisenberg calls for better leadership on all of these issues and for the will to change what can easily be viewed as self-interested behavior on the part of the sector. –Ruth McCambridge