Is Big Government Devouring Philanthropy’s Space?

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February 24, 2015; Insider Online

In the Winter 2015 issue of Philanthropy magazine published by the Philanthropy Roundtable, political pundit George Will writes that American philanthropy is in danger.

“A robust philanthropic sector requires a large protected social space from which government is largely fenced out,” Will writes. “But the government today knows no limits, will respect no boundaries, and increasingly will tolerate no rivals.”

With his usual eclectic but erudite analysis, Will draws on two of James Madison’s Federalist Papers (no. 10 and no. 15) to make the argument that American democracy is distinguished by its healthy civil society, which grows because of America’s “historically based distrust of…[government’s] metabolic urge to swallow all of society.” As seen by Will, “Allowing independent powers to exist parallel to, and often in competition with, government is what preserves our freedom.”

Will contrasts that view with Woodrow Wilson’s perspective, which he sees as having taken a “Darwinian” view of the U.S. Constitution, evolving and living—and adjusting the shape and scope of government to the needs of modern America, different from the Founding Fathers’ design of government which might have worked well for a United States of 4 million people, but not the many times larger America of Wilson’s era or of today. Will reads Wilson’s “progressive doctrine” as follows:

“If all power is concentrated in Washington, and all Washington power in the executive branch, and all executive branch power in the President—who, at his discretion, can disperse power to expert disinterested czars—there will be nothing left over that the private sector has to do.”

Some of Will’s analysis of an out-of-control government squashing individual initiative reads like multiple anecdotes somehow transformed into data. For example, he devotes five paragraphs of his brief essay to the story of a Jersey City tailor who, in 1934, was arrested, fined, and jailed for violating price controls promulgated by the National Recovery Administration. The overreaction of the New Dealers to the tailor is disturbing, but Will takes a mighty leap from that anecdote to point out that the government is now involved in mortgages, college tuition, food stamps, and disability payments.

“In the last six years, the number of Americans on food stamps has more than doubled. For every two private-sector jobs we created in the last 15 years, one American went on disability,” Will notes. “We have now reached the tipping point at which literally a majority of Americans are either employees of the federal government or its clients.”

The reason that government is involved in mortgages (through FHA mortgage insurance or through recent efforts to mitigate foreclosures) is to preserve and expand homeownership—and protect the homeowners who are at risk of losing their homes to the financial games of subprime mortgage lenders. The reason that government is involved in college tuitions (through Pell grants and government loans) is that it is a societal imperative to help more people without means go to college and hopefully advance up the economic ladder as a result. The reason more people are on Food Stamps and on disability insurance is that our nation nowadays doesn’t leave poor people to starve because they can’t work or don’t have enough work to lift themselves out of poverty.

In Will’s anthropomorphized view of government, he sees government dictating the quantity, content, and timing of political speech under the guise of campaign finance reform, making banks dependent on a government that dictates credit allocation, establishing standards for what constitutes minimally acceptable health insurance coverage, and unleashing the Troubled Asset Relief Program to buy entire industries and “increase…the dependency of the private sector on government.” The dehumanized version of government Will fears, as though it were operated by a self-directed, disembodied “V.I.K.I.” (from the movie version of I, Robot) or GLaDOS (from the game Portal), remakes Americans as dependent on the welfare state and, channeling Mitt Romney’s terror of the 47 percent, constituting “today’s most active voting bloc, retiring baby boomers, heavily dependent on government, and resigned to their dependency.”

In contrast to the notion that, as he attributes to Joe Biden, “every single great idea…has required government vision and government incentive,” Will says:

“It has mostly been restless businessmen, close-knit families and communities, and inventive social entrepreneurs who have created the enterprises, colleges, character-shaping organizations, and talented individuals that have propelled the United States into an unprecedented spot in human history…Very few of our revolutions began at the ballot box. Most began with the spark of individual genius, struck in virtuous homes, fed with tinder from cooperating fellow private creators, and fanned into open flame by the signals and rewards transmitted by free markets in ideas and goods.”

Will frets that with “government grabbing more and more of our society’s controlling levers, it remains to be seen if our social and economic triumphs of the past continue in the future.” He suggests that our government-dominated society of today is a kind of “soft despotism,” epitomized by the “nanny state” characteristics of government programs and regulations.

He finds the pluralistic alternative to government still lives “in two important sectors: our powerfully fecund entrepreneurs, with all the commercial power they can bring to bear on a problem, and our radically decentralized philanthropic sector, which sustains a civil society that still manages many of our most vital social functions.” In his mind, entrepreneurs and philanthropists “are often one and the same, in both their small and large variants,” but they both stand in “the crosshairs of a movement that aims to delegitimize all non-state actors.”

Will doesn’t discuss the limitations of charity and philanthropy is not reflected in the essay, and he doesn’t address how charity and philanthropy—and government—have had to address the negative externalities created and sustained by the actions of free market entrepreneurs big and small. Nor, without falling into the Biden overstatement, does Will acknowledge how much government has made it possible, through legal protections, regulatory structures, and financial incentives, for entrepreneurs to bring their ideas to the public and get them examined, financed, and implemented. He doesn’t broach the need for governmental intervention in the banking system, which for years without effective oversight redlined minority neighborhoods and sold subprime products that undermined the nation’s economy. He doesn’t acknowledge that in programs for persons with disabilities, the focus is on getting those people back into the labor force—as they themselves want—rather than perpetuating their stay on public resources.

We could go on in pointing out areas of Will’s nonprofit myopia, but it is still worthwhile to read Will’s paper and think for yourself about whether government has squeezed out the role of philanthropy in our society or whether the two sectors are actually trying to find the right balance between them.—Rick Cohen

  • Nicole Locklear

    While Will’s points make for a very interesting read, I feel it is impossible for the government to squeeze out the role of philanthropy in civil society. I am not sure we can really say we have a balance either, but as long as the government aims to please the “median voter,” we will always need nonprofits and they will always exist.

    It is human nature for us to have “heterogeneity of demand” – we all have preferences and neither the government nor the market will ever be able to address all of those demands. I’m a big fan of limited government myself, but if we look back in history, even in the most extreme examples of government control, they still needed nonprofits. This is because the government simply cannot meet all needs.

    During the 1939 German occupation of Poland, almost all official nonprofit activities were suspended – with the exception of the Polish Red Cross and a few other organizations. The Polish Red Cross continued to do its work because the Germans knew they needed its services during the war. Despite the existence of communism, the government had to concede that it was unable to truly control all things and meet all needs.

    The rest of the Polish nonprofit activity simply went underground. The government might have been able to take away the official status of philanthropic organizations, but it would never be able to stop them from organizing. I believe history has proven that we will simply find a way around government regulation.

    Like you said – the government is involved in food stamps, mortgages and tuition because there is a need. With this in mind, I would suggest that part of the answer to the threat of big government points right back at us as civil society. Since nonprofits are unable to provide food and shelter for all of the homeless people in our cities, what would happen if the government did nothing and people starved? Would we not cry out at the injustice and say, “where was the government when our people needed help?”

    As long as there is a need, I believe all three sectors will continually be work to provide services and fill the gaps where others have failed. Do we need to find a better balance? Absolutely. Again, I’m a huge fan of limited government. But big government doesn’t scare me near as much as the prospect of what our civil society will look like if don’t keep fighting to care for our own and help those in need. The government should simply be supplementary to our efforts to care for one another.

  • Matt Mendenhall

    Otto Scharmer’s work, “Leading from the Emerging Future” may help to open up new thinking for this discussion. Our assumptions about how the economy works need to be challenged and Scharmer’s thinking brings a new dynamic of looking for root causes of our current social problems. This seems to be one of those moments when we need to remember that, “we cannot solve our problems with the same thinking we used when we created them” (Einstein). On his website, Dr. Scharmer states:

    “Our economies evolved around challenges and responses. Societies responded to the challenges of instability, growth, and domestic externalities by updating their economic logic, by innovating, and by introducing new coordination mechanisms (hierarchy, markets, networks, eco-system awareness). Each new stage came with an evolution in consciousness from traditional, to ego-centric, to stakeholder- centric, to eco-centric.”

    We need to act from a deeper understanding of how connected we all are.