The corporatization of U.S. charities continues to concern me.
This is the slow yet steady process by which regulators regard charities more as for-profit corporations. I’ve blogged it before.
My interest in this began with formerNew York Times nonprofit reporter Stephanie Strom’s coverage last August of California eyeing tax exemptions. I’ve got some new data points.
The Chronicle of Philanthropyreports Pittsburgh is collecting payments in lieu of taxes (PILOTs) from charities and Memphis is considering the same. The Memphis coverage states, “Over the last decade PILOTs for tax-exempt entities have been used in at least 117 municipalities in at least 18 states.”
When I interviewed (see the last 2 minutes)The Nonprofit Times‘ editor-in-chief Paul Clolery for Nonprofit Radio, he shared his concern that the lines are blurring between corporate and charitable. He sees California’s B Corp (a designation under which for-profit corporations provide a benefit to the public) as the first step toward a request for relief from taxes in proportion to the societal benefit. Do you see the harsh irony as charities lose favorable tax treatments?
Many states have something similar to the B corp, the low-profit limited liability corporation, or L3C.
Last month, The Chronicle had a very interesting and slightly startling opinion piece about the supreme court’s Affordable Healthcare Act decision making it easy for Congress to curtail charity tax exemptions and charitable deductions.
These signal a blurring of the distinction between charitable and corporate, and a loss of the special perquisites that keep charities thriving and donors giving.
The reality is The New York Times pulled a deeply experienced journalist off the philanthropy and nonprofit beat. This is foremost in my mind. I wrote about it last week, and the slightly more widely read Chronicle of Philanthropy covered it the week before.
Then why am I bothered seeing more Times pieces in my “philanthropy” alerts than usual? Because I can’t help but worry it’s an early barrage to appease the nonprofit community so we won’t object to losing our voice at the national desk.
I still say having a reporter devoted exclusively to a beat is better than having multiple reporters across desks thinking about that beat from time to time. She develops sources and builds relationships and asks people what they’re seeing. She thinks about news from a singular perspective to discern trends and make analysis. She devotes time to research in addition to covering news items.
The beat won’t get the attention it deserves over the medium- to long term. Inattention won’t start today, but soon, in weeks or months, and then it’s interminable. (The Times is counting on us having a collective short memory.) That means the charity beat suffers. That means the charity community suffers because information and coverage are power and voice.
I don’t like to see the charity community suffer. Do you think it will? Or am I alone here?
I am appalled that The New York Times dropped philanthropy and nonprofits as a full time beat, saying it will be handled “across news desks.”
There is so much that’s interesting in the charity community as
compliance and oversight tighten
new types of organizations blur the line between corporate and charitable
tax reform looms
the estate tax’s future remains uncertain
the charitable deduction is in the cross hairs
the economy creeps out of recession
illegal lobbying and political activity charges emerge in an election year
the Republican nominee announces a charity platform
nonprofit hospitals await the final word on healthcare reform
state and local governments continue to look for new revenue
20- and 30-somethings become more involved in social change
baby boomers get deeper into retirement
measuring “impact” grows in stature
new social networks like Pinterest emerge
religious organizations slowly lose fundraising market share
climate change worsens and environmental and healthcare groups react
Syria erupts and social justice and humanitarian groups react
Arab nations reform and women’s groups react
Vladimir Putin regains the Russian presidency
European countries’ austerity measures leave needs unmet
Added on March 13, 2012 – since this was published yesterday:
Philanthropy is a top growth industry
Oklahoma State University cannot recoup millions lost in insurance fundraising promoted by T. Boone Pickens
Precious few of these are stories that will grab the news desks’ attention. They emerge as trends over time and will get displaced each day by the urgencies that fly across news desks.
Philanthropy and charity, our third sector that represents about 10% of the U.S. gross domestic product, demands someone who is each day thinking about that beat, sifting the news for patterns and looking at the day’s happenings through the lens of the charity community.
You’re not going to get that without a devoted, full time reporter on the beat.
The Times should restore philanthropy to an exclusive national news beat and put Stephanie Strom (or someone with equivalent experience and contacts) back on it.
This two minute clip sort of captures my sentiment.
Yesterday, Sean Stannard-Stockton was anointed Prince of Philanthropy. The auspicious event occurred in the Giving section of The New York Times, where crowning was presided over by the queen, Stephanie Strom.
To avoid confusion in the royal record, I make it clear that none of the family have ever claimed these titles. In fact, they might be embarrassed by the pomp. I am bestowing them. That gives me the rank of jester (lest you think I aggrandized myself into a more exalted station).
In a contribution to yesterday’s annual section,“Pledge to Give Away Fortunes Stirs Debate“, the Queen of Philanthropy dubbed the prince by giving him a splendid second-paragraph quote in Title Case. The honor is deserved. Prince Sean has been blogging since 2006, when his first post welcomed us to “The Second Great Wave of Philanthropy.” That is the phrase quoted in yesterday’s refulgent decree. (There seems to be some confusion over proper use of title case. The senior family member does not capitalize “the” while her junior does. Royal style manuals may differ, and I am not one to quibble. I leave that to the royalty watchers on the sidelines.)
The prince enters the court with family. He is married with two young children. Thankfully, the U.S. will be spared the spectacle the U.K. is now suffering over Prince William, leaving, over here, many chagrined royal family commentators.
I confess I have confused the prince’s name in my mind. For a time, I thought his surname to be Stockard-Stanning. I’ve always been a fan of the closely-named actress and her roles in “Grease” and “The West Wing.” The jester is a sucker for royalty.
It is now the day after our propitious ceremony. The philanthropy community will take this all in and the prince begins to settle into his august role. As it is Friday, Tony Martignetti Nonprofit Radio is live at 1PM Eastern. I proudly provide the anticlimax.
I love last week’s New York Times piece by Stephanie Strom, “Nonprofits Review Technology Failures.” The essential message is that nonprofits will suffer failures, and the charity community is wise to learn from them.
I’ve written about the corporatization of nonprofits, which includes donor expectations of outcome measurements (just as shareholders expect of companies). If your nonprofit wants to comply with donor demands, it is going to have to admit its grand failures alongside handsome successes.
Transparency and evaluation of outcomes means all outcomes, not just the good ones. Insufficient programming, unforeseen consequences, underfunding, overstaffing, failed assumptions. Let’s talk about them all, so everyone can learn to avoid repeats.
Your donor investors and those whose lives you improve deserve an honest outcomes dialogue. They will benefit. So will the larger nonprofit community.
The $64,000 Question is whether donors will take the news of unsatisfactory results well.