December 6, 2020; Business Insider
Last week, NPQ welcomed the release of the Initiative to Accelerate Charitable Giving (IACG), the work of a group of institutional and individual philanthropists to bring much needed change to the philanthropic sector. The Initiative aims to make reforms to foundations and donor-advised funds at a time when economic pressure on nonprofits has brought many to a coronavirus-caused, life-threatening crisis for many. As per the IACG press release:
Charities are in a state of crisis. Congress has taken some steps to help them, but government cannot do it all. There is currently more than $1 trillion set aside in private foundations and donor-advised funds, yet current law provides insufficient incentives to ensure this funding is used for its intended purpose, to support operating charities and the beneficiaries they serve.
At a time when we are staring at huge unemployment numbers, mass evictions, and a federal government that struggles to agree on even small levels of additional assistance to those at risk, the prospect of unlocking billions of dollars of additional philanthropy is a positive step. Yet absent a real shift of resources to the public sector, this may just be a matter of rearranging the deck chairs while the Titanic sinks.
Anand Giridharadas, the author of Winners Take All: The Elite Charade of Changing the World, described the problem to Business Insider, “We don’t need the richest and most powerful people in the society to give more. We need them to take less. We don’t need them to make a difference. We need them to stop making a killing at the society’s expense. We don’t need them to increase their generosity. We need them to reduce their complicity and injustice.”
COVID-19 has made it extraordinarily difficult not to see how unequal our nation is. Those with the least have suffered most, and while millions of households face a threatening future, those with the greatest wealth and proudly wear the title “philanthropist” have seen their fortunes grow.
According to Chuck Collins of the Institute for Policy Studies, as the Dow crossed the 30,000 mark just before Thanksgiving, “the wealth of 650 US billionaires approached a total of $4 trillion, with more than $1 trillion ($1.008 trillion) in growth since March 2020.” As former Google CEO and billionaire Eric Schmidt acknowledged in speaking to TIME, “The American Dream is in trouble as the average person hasn’t been doing much better over the last decade, while the elite, obviously including myself, have done super well.”
The accumulation of such wealth, the increased concentration of great wealth among the smallest slice of our population, results from a broken tax system. Ineffective regulation of philanthropy doesn’t help, but the fundamental issue is that we have allowed individuals’ choice of what is in the public’s interest to replace our collective responsibility. Unlocking more money for operating charities doing good work but gasping for breath is appealing. But doing so is inadequate unless government is strengthened, and that means more tax dollars from wealthy Americans ending up in public coffers.
Jacob Harold, the executive vice president of Candid, speaking to Business Insider, recognizes the fallacy of relying on charity to do what only government can. “We only will succeed with deep government involvement. Even though it sounds like billionaires have a lot of money, in some ways it’s quite small compared to the trillions that the US government is able to bring to bear.”
There is a role for nonprofits in building our communities. There is a role for charitable giving in their support. But that role cannot replace government. We need to enable governments to do what only governments can do. If these months of national struggle have taught us anything, it should be this lesson. Years of denigrating public service and starving governments of needed resources have had a cost, one that, among other things, has resulted in countless lives lost amid COVID-19. The action needed now is to refocus on this central need and not take our eyes off that target.—Martin Levine