Seeking Federal Favors

Charities go after earmarks, despite concerns about fairness

Like thousands of charity leaders across the country, Mary Faithful is lobbying members of Congress

to set aside federal money for her organization in the form of a “legislative earmark.”

She is seeking $200,000 to help Advocacy Inc. — the Austin, Tex., charity she runs — upgrade its phone system so it can better provide legal services to the disabled.

Yet Ms. Faithful also has reservations about the request. She worries about appearing to seek special favors for her group, because she is not taking the more established route of applying for a competitive grant from a federal agency. And she has seen plenty of other groups that won earmarks attacked in news accounts about “pork-barrel spending.”

“I’m sure to those groups what they were doing was important, too,” she says. “But it’s an opportunity. And if we are fortunate enough to receive this funding, it will allow us to help the people we serve better and more effectively.”

Considering the Options

Ms. Faithful’s ambivalence is shared by many nonprofit leaders. As earmarks have become more prevalent in recent years — nonprofit groups received more than $2-billion that way last year — a growing number of charity officials have decided to seek a share of the money. Some say spending cuts in federal grant programs have left them little choice but to compete for earmarks.

But other observers say the earmark system relies too much on who a charity knows and not enough on the merits of its work. Many groups, they say, are virtually ineligible for money, either because they are not located in the home state of powerful lawmakers or do not have the prominence and connections to attract the attention of a member of Congress.

“Earmarks are heavily concentrated in a few states and a few Congressional districts,” says Scott Lilly, who served as the chief Democratic staff member on the House Appropriations Committee in the 1980s and 1990s. “If lawmakers didn’t agree to a system that earmarked money, most districts would be getting more money, and most charities would stand a better chance of getting more money,” says Mr. Lilly, who is now a senior fellow at the Center for American Progress, a research and educational institute in Washington. “It’s part of a very questionable overall scheme.”

The Chronicle‘s analysis of earmarks awarded to charities found that organizations were much more likely to receive an earmark if they operated in states represented by a senator who serves on the Appropriations Committee — the panel that allots money to specific government programs.

Of the 18 states that received the most in charitable earmarks in the 2005 fiscal year, 17 had a senator on the panel. And 14 of the 18 states at the bottom of the list did not.

Since 1997, Alaska has consistently received more per capita in earmarks than any other state. Sen. Ted Stevens, an Alaska Republican, was chairman of the Appropriations Committee for about seven years until stepping down in 2004.

This year, charities in Alaska will receive $81.87 per capita in earmarks, nearly 30 percent more than North Dakota, the next highest.

Charities in North Dakota, which benefited from the presence of Democratic Sen. Byron L. Dorgan on the committee, this year won $64.93 per capita in Congressional earmarks. By contrast, in Georgia, which has no senators on the Appropriations Committee, nonprofit groups got the least, with $2.12 per capita in earmarks. Oregon, which also had no senators on the panel last year, is next to the bottom, with $2.44 per capita.

Tylan Schrock, executive director of the Alaska SeaLife Center, in Seward, acknowledges that Senator Stevens’s leadership role on the Appropriations Committee “was certainly significant for Alaska.”

However, Mr. Schrock says the $9.6-million in Congressional earmarks the center won — the ninth largest nonprofit earmark awarded this year — is more than a reward for its location in an influential senator’s state. He says the center does work the government should help pay for, such as rescuing stranded sea animals. “Because we have the expertise as well as the facilities here, they call us.”

Helping West Virginia

Members of the House Appropriations Committee can also play a pivotal role in steering money to their home states. In West Virginia, Rep. Alan B. Mollohan, a Democrat, has created an unusual type of nonprofit-government partnership that has received millions of dollars in earmarks over the past 15 years. Since 2000 alone, four nonprofit groups he created have been given $176-million.

When Mr. Mollohan was elected in 1982, one in five people in his district didn’t have a job, largely because of the decline of the coal and timber industries. He decided to create charities that would focus on attracting high-technology businesses to the region.

This year, Mr. Mollohan secured his four nonprofit groups a total of $39.8-million in federal aid. Two of those charities — the Institute for Scientific Research and the Canaan Valley Institute, which irons out disputes over environmental concerns caused by business development — are among the top 10 nonprofit recipients of federal money from legislative earmarks.

Mr. Mollohan says he hopes that soon those groups won’t need to rely on federal earmarks for money, but says such funds help start innovative projects. Membership in one of the groups he formed, the West Virginia High Technology Consortium, has grown from six companies in 1990 to more than 225 today.

He acknowledges that some critics are upset that his state is doing better than others in the competition for earmarks. But he says perceived inequities balance out over time.

“Fairness cannot accurately be evaluated in a snapshot,” he says. “It has to be evaluated looking at it as a history. Different areas of the country have benefited at different times.” For example, he says, when he first came to Congress, Massachusetts was receiving a lot of federal money because Thomas P. (Tip) O’Neill Jr. was Speaker of the House. “What a marvelous job he did for Boston,” says Mr. Mollohan.

Name Brands

Location isn’t the only factor that matters when it comes to earmarks.

High name recognition is also useful. Many of the recipients of Congressional earmarks appear on The Chronicle‘s annual list of the 400 charities that raise the most money from private donors.

This year, 29 YMCAs and four YWCAs got $25,000 to $1-million in earmarks, including four to municipalities for construction or expansion of facilities. Meanwhile, 25 local Boys & Girls Clubs benefited from earmarks of $15,000 to $1-million. Twelve Jewish federations, five chapters of Big Brothers Big Sisters, and three United Ways also received earmarks.

“There are these highly visible nonprofits that are really becoming cottage industries for earmarking,” says Keith Ashdown, vice president of policy at Taxpayers for Common Sense, a watchdog group in Washington that has tracked earmarks since 1995. “It benefits lawmakers to support them because they’re a good cause and there’s a local entity that gets funded.”

Several charities founded by wealthy people also received earmarks this year:

• The Experience Music Project, in Seattle, a rock ‘n’ roll museum created by Paul G. Allen, co-founder of Microsoft and the seventh-wealthiest man in the country, according to Forbes magazine, received $430,000 for an oral-history project.
• The Milken Family Foundation, in Santa Monica, won $2-million for a program to attract and retain teachers. The organization was founded by Michael R. Milken and Lowell J. Milken, both of whom made Forbes magazine’s list of the 400 wealthiest people in America last year.
• The McKelvey Foundation, in New Wilmington, Pa., obtained $300,000 to award college scholarships. The organization was created by Andrew McKelvey, founder of TMP Worldwide, the job-search company, which had $845-million in revenue last year.
• The I Have a Dream Foundation, in New York, received $100,000. The scholarship charity was created by Eugene Lang, a retired businessman.

Charities with ties to athletes, entertainers, and other celebrities have also won earmarks.

Among the recipients with links to sports stars were organizations created by the cyclist Lance Armstrong (two earmarks of $100,000 each to create two cancer centers); Cal Ripken, the former Baltimore Orioles baseball player ($3,072,750 to build a baseball stadium and for a sports program for needy children); and the golfer Tiger Woods ($100,000 for education programs for youngsters from poor families).

Charities with connections to the entertainment industry that received earmarks included the Country Music Hall of Fame and Museum, in Nashville ($250,000 to support local programs); the Grammy Foundation, in Santa Monica, Calif. ($150,000 for education projects); and the Rock and Roll Hall of Fame and Museum, in Cleveland ($350,000 for education programs).

Noreen Keating, who retired last month as president of the Lighthouse of Oakland County, a social-services group in Pontiac, Mich., says she is irritated by such earmarks, especially after Congress failed to find the money to repeat the $226,000 earmark her charity received in 2004 to build houses in a neighborhood where low-income people live.

“That really ticked me off,” she says. “Those rock ‘n’ roll stars, with all their money and their sequined suits, I would have thought they could pay for it themselves. And Tiger Woods could buy the federal government on a good day.”

Todd Mesek, marketing director of the Rock and Roll Hall of Fame, says such criticisms are unfair. “Museums that show Jackson Pollock’s work don’t depend on funding from the artist,” he says. The money his group obtained from Congress will be used to educate young people, he says, a key priority of the federal government.

He adds that while “some rock stars give us contributions to assist our general goals,” their gifts make up only a small part of the charity’s budget.

Competing Priorities

While Mr. Mesek says earmarks are helping his group tackle a major national concern, many critics of earmarks worry that as more and more money goes to lawmakers’ pet projects, little is left to meet other national needs.

Mr. Lilly, the former House staff member, points to the federal Institute of Museum and Library Services as an example.

The institute awarded $53-million to a little more than a third of the 1,666 museums and libraries that submitted grant proposals in 2004. Such tight competition for funds has prompted many organizations to seek earmarks. Lawmakers funneled $39.3-million in earmarks to 139 museums and other groups through the institute this year.

Yet the money distributed through earmarks does not always match the most pressing needs, says Mr. Lilly. “There are so many really valuable treasures that are not being preserved or protected as they should be,” he says. “The very limited money the federal government spends to deal with that problem goes to the Cowgirl Hall of Fame, while at the same time you’ve got personal letters from early American authors sitting around in shoeboxes in closets that don’t even have fire protection.”

The National Cowgirl Museum and Hall of Fame, in Fort Worth, received a $90,000 earmark in 2003 to create an audio tour. Patricia W. Riley, the museum’s executive director, says the money enabled the museum to offer audio tours in Spanish as well as English, benefiting the area’s many Hispanic residents. “Our mission is very valid, and very important,” she says. “We are the only institution that honors and documents the lives of women who have made extraordinary contributions to the American West.”

Robbie Callaway, senior vice president for government relations at Boys & Girls Clubs of America, says it makes sense to give members of Congress some say in the selection process for awarding federal dollars since they are in a better position than a national review panel to judge the needs in their districts or states and to identify the groups most able to meet them.

“Is a member of Congress more qualified than a bureaucrat to judge a program? Sometimes,” says Mr. Callaway, whose charity won several earmarks in the early 1990s.

Shift Away From Grants

Because so many lawmakers have been awarding money through earmarks, some federal grant programs now have no money available for competitive grants. All of the $124-million Congress provided the Job Access and Reverse Commute program this year, for example, was earmarked by Congress. The Transportation Department had no role in deciding which groups would benefit from the program, which is designed to help people moving off the welfare rolls get to their jobs.

Rich Stolz, an organizer at the Center for Community Change, an antipoverty group in Washington, says that while the recipients of the job-program earmarks are doing good work, the shift away from competitive grants raises concerns.

“The process is not accountable to a strict set of standards or guidelines,” he says. “That sets up a competition that may be unfair, where the primary basis for where funds go is the political power of a particular appropriator. That may put communities with Democratic constituencies, people-of-color communities, at a disadvantage.”

In addition, all of the $163.9-million in the Department of Education’s Fund for the Improvement of Postsecondary Education and $248-million available in the agency’s Fund for the Improvement of Education was earmarked by Congress. Previously, those programs awarded money through a competitive process.

Such changes do not sit well with some staff members at the federal agencies that oversee grant programs, says Norine E. Noonan, who headed the Environmental Protection Agency’s research division from 1998 to 2001.

Ms. Noonan, now dean of the School of Sciences and Mathematics at the College of Charleston, adds that charities that pursue earmarks should realize they could be hurting their odds of getting federal grants. “People in agencies stay around a lot longer than you may realize,” she says, “and they’ll remember if you got an earmark when you try to apply for a competitive grant.”

The move away from a competitive grant-making process has also meant that federally financed projects often get less public scrutiny. Precise details about which organizations received how much money — and which lawmakers secured it — are hard to come by. In most cases, the names and amounts are not written into the legislation that Congress passes, but are instead included in reports that lawmakers draft after they have passed a measure to explain their intentions.

Silencing Criticism

To opponents of the earmark system, one of the biggest concerns is that lawmakers and charities often must trade off their support for federal programs of collective interest to win money for specific nonprofit projects.

“Once members insert their earmarks into a bill, they’ve given away their ability to vote against the bill or even criticize it,” says Matthew Specht, a spokesman for Rep. Jeff Flake, Republican of Arizona, who opposes earmarks. “The leadership will say you have to shut your mouth or lose the earmark.”

An advocate for social causes, who asked not to be named, says the prevalence of earmarks has made it hard to persuade lawmakers to focus on broad social-welfare programs. She met recently with aides to a senior lawmaker and lobbied against President Bush’s proposal to make deep budget cuts in a Justice Department program.

“Despite our best efforts to say we’re here to talk about this national program, they just kept saying, ‘What will it take to fund what you want funded in our state?’” she says. “You go in and try to talk about the larger federal program, and they literally don’t understand what you’re talking about.”

She adds that her cause has lost some of its most effective advocates after they received earmarks: “It’s all about, ‘I need my $1-million,’ not ‘We need national funding to meet this pressing need.’”

Changes Sought

Some lawmakers and other people are trying to rein in earmarks, but few Capitol Hill experts expect them to succeed.

A coalition of conservative Democrats has proposed that lawmakers be required to provide written justification for each earmark they request.

Representative Flake is also trying to reduce the secrecy surrounding earmarks. He has introduced legislation that would require earmarks to be included in the text of spending bills, rather than only in the explanatory reports that accompany them. Sen. John McCain, another Arizona Republican, has introduced a similar bill.

At Senator McCain’s urging, the Senate resolved in April to “determine a method for effectively containing the extraordinary growth in unauthorized earmarks” as part of a budget agreement. The resolution is not binding on lawmakers, but traditionally such resolutions carry some weight.

Many observers, however, say a legislative ban on earmarks is unlikely to win Congressional approval.

Bill Treanor, publisher of the nonprofit magazine Youth Today, has another approach for ending earmarks.

He objects to charities’ spending lots of money to woo members of Congress to back an earmark — sums that far exceed what it would cost them to submit a federal grant application. “It’s pay to play,” Mr.Treanor says. “The only people benefiting from this system are lobbyists.”

That said, he is urging every charity he comes in contact with to ask for an earmark. Only by overwhelming members of Congress with requests, he believes, will Congress finally decide to put an end to the practice.

“It’s the best way to get the system to collapse under its own weight,” he says. “Only a stack of constituent requests that would fill an Iowa corn silo will ever convince Congress that earmark losers vastly outnumber earmark winners — and that earmarks could be an Election Day loser as well.”

Holly Hall and Harvy Lipman contributed to this article.