Nonprofit Leaders Debate ‘Whether or Not All Philanthropy Is Equal’

The charitable world bears a much greater responsibility for fighting income inequality than it is currently assuming, speakers said at last week’s annual meeting here of Independent Sector, which drew roughly 1,000 people from some of the country’s largest charities and foundations.

The three-day meeting sparked discussion about whether the nonprofit world is doing enough to help poor people and minorities, a question that several members of Congress have raised in recent months.

“When there are mega-wealthy people living in Silicon Valley who are being privileged by tax treatment and are able to direct their money in a much less egalitarian way than if it went to the government, it becomes a very vexing problem for the philanthropic sector to say whether or not all philanthropy is equal,” said Kelvin Taketa, president of the Hawaii Community Foundation.

“We have to have that debate,”he said. “Are community foundations going to say to their donors, Whatever you do is fine with us and we are going to watch Rome burn?”

Brian Gallagher, president of United Way of America, said that unless the charitable world does more to fight poverty, poor people may start demanding changes through violence. “The problem has gotten so big that if it sustains, it’s going to threaten civil society, including civil unrest,” he said. “I have a feeling that if we don’t respond more aggressively, more quickly, then communities are going to fight it for us.”

Before the conference formally opened, Representative Xavier Becerra, a Democrat from California, met with Independent Sector member organizations and urged them to direct more resources to minorities and poor people.

Lawmakers have floated the idea that the tax code could be restructured to provide extra incentives to donors who give contributions to help the neediest individuals.

While many people at the conference said they were reluctant to see changes in the tax code, they viewed Representative Becerra’s statements more as a wake-up call than a suggestion that legislation was imminent.

Representative Becerra “is not talking about legislation right now,” said Patricia Read, senior vice president of public policy and government affairs at Independent Sector. “He’s challenging our sector to do a better job of thinking about how we represent communities of color, in particular, but also how we serve the disadvantaged.”

However, many people here remained worried that Congress is increasingly seeing the nonprofit world as a vehicle for redistributing wealth, rather than advancing public good. They cautioned against defining philanthropy too narrowly, or categorizing charities based on perceptions of the benefits they provide to society.

“We’re very concerned about the slicing and dicing of the sector,” said David Thompson, Independent Sector’s director of legislative affairs. “We’re trying to change the debate so that all the work we do is understood, the fact that it’s interrelated is understood, so the work of museums is important, as well as the work of soup kitchens.”

Several speakers at the conference argued that nonprofit leaders have to be far more effective advocates, particularly in tackling divisive political issues such as tax policies, globalization, immigration, and health care.

Matt Miller, a senior fellow at the Center for American Progress, a Washington think tank, said that charities have a special opportunity to shatter what he called the “myth” that higher taxes hurt the economy.

As a growing number of baby boomers reach retirement age, Americans will face a higher tax burden, he said, yet too few people understand that increased taxes will be necessary and won’t have a detrimental effect on economic growth.

“The nonprofit sector can do a lot toward legitimizing the discussion that higher taxes are still consistent with economic growth,” he said. “The nonprofit sector is probably the only one that can put these ideas front and center on the American agenda.”

Globalization presents another challenge that the charitable world has a responsibility to tackle, said Stewart Kwoh, president of the Asian Pacific American Legal Center of Southern California.

Mr. Kwoh said that globalization has been advancing in an “unsustainable” manner.

“It has created billions of poor people, we are losing the middle class, and we see a few more billionaires being created,” he said. “The nonprofit sector has to put this on its agenda. For nonprofits to think globally and act locally is passé.”

But to influence the debate on these and other issues, charities need to stop shying away from advocacy, speakers said.

“We need to start seeing dramatic changes in policy, yet we are seeing so many in the nonprofit and foundation worlds saying how they’re going to direct resources oftentimes targeted on different things,” said Janet Murguía, president of the National Council of La Raza.

“That can help,” she adds, “but what we really need is a strong voice. We need leadership when it comes to changing policies that we know will open up more doors of opportunity. And yet I still see so many who are afraid.”

In addition to attracting young workers, charities often struggle to retain the top leaders they do have because of the low pay and high stress that characterize so many nonprofit jobs.

Michael Watson, senior vice president of human resources at the Girls Scouts of the USA, argued that good management is the biggest factor in keeping top workers.

People who respect their bosses are far more likely to work harder and remain at their jobs, he said. His organization now evaluates employees not only on their accomplishments but also on how they treat their colleagues and subordinates, and by providing coaching to managers.

“People who have a knot in their stomach on Sunday evenings are going to leave their organizations,” he said. “Organizations will lose their best and brightest, and they’ll lose them first because those people have the most options.”

While foundations are often reluctant to make grants aimed at helping charities keep good employees, Sylvia Yee, vice president of programs at the Evelyn and Walter Haas Jr. Fund, said her organization has had success in helping its grantees hold onto their top staff members.

Her foundation has awarded $4.3-million over three years for such purposes.

The grants are designed not only to keep the executive director in place, but also to ensure that other top staff members and trustees are involved in sharing the workload and shaping the mission and direction of the organization.

For all the talk about the leadership deficit, however, some speakers said it wouldn’t be harmful if the nonprofit world lost a few organizations because they couldn’t attract new leadership.

“If the organization is so dependent on one person that they can’t find anyone else to fill that job, then it’s not necessarily a bad thing that it goes away,” said Frances Kunreuther, director of the Building Movement Project, which supports social-change groups.

“Just like we can’t say ‘failure,’ we in the sector can’t say ‘ending,’” she said.