Bracing for Bush’s ‘Ownership Society’

George W. Bush’s decisive election victory came as a surprise to many Americans, but perhaps few were more disappointed than leaders of the philanthropic world. Seventy percent of nonprofit officials had hoped John F. Kerry would win, according to one poll, rivaling the proportion of white evangelical Christians who backed President Bush.

As a result, instead of looking forward to the inauguration of a new president they liked, nonprofit leaders are fretting about the potential for a new round of budget cuts and legislative battles over regulations for charities. But the real challenge of a second Bush administration will come from its ideas for an “ownership society,” a series of proposals for changes in what government does that will force philanthropy to rethink its own activities.

The election of Senator Kerry seemingly would have avoided that. The Democratic candidate had a long record of backing government spending programs that assisted nonprofit groups and the needy. His emphasis on job growth promised to reduce some of the burdens that fell on charities during the Bush administration. His progressive values corresponded to the sentiments of many nonprofit leaders. And had Senator Kerry been elected, a major philanthropist would have taken up residence in the White House as first lady.

By contrast, many nonprofit executives view the Bush administration’s record of support as, at best, mixed. While it increased spending on education, national service, the arts and humanities, and other areas important to charities and foundations, its policies on environmental protection, stem-cell research, and antiterrorism controls drew strong criticisms from philanthropic groups.

Although President Bush favored letting people who do not itemize their deductions receive a special tax break for giving, an idea long advocated by lobbyists for charities, its income-tax cuts — and especially its efforts to eliminate the estate tax — were thought to make deductions for charitable giving less attractive to the wealthy. And to many nonprofit leaders, President Bush’s vision of “compassionate conservatism” looked like a thinly disguised way of steering federal funds to political allies on the religious right.

Still, during its first term (and often to the dismay of its supporters), the Bush administration did not turn away from social problems. It even started several new programs, including an effort to provide mentors to 100,000 children of prisoners, expansion of homeownership programs, a prescription-drug plan for older people, and a campaign to eradicate AIDS in Africa. Whatever complaints the nonprofit world might have had about the restrictions imposed on it by the USA Patriot Act — the legislation passed in the wake of the September 11, 2001, attacks to give government new powers to fight terrorism — the White House has carefully refrained from taking a position on the most onerous new rules being discussed in Congress to curb financial misbehavior by charities. Moreover, the tax cuts seemed not to discourage charitable giving, which increased last year as the economy revived and is expected to grow further this year.

However one assesses President Bush’s first term, it is clear that he has even more ambitious plans for his second term. During the campaign, he outlined an innovative series of measures that he said would foster “personal ownership of America’s prosperity.”

His pledges include promises to create personal savings accounts for retirement expenses, increase homeownership, and create more “opportunity zones” for government and private investment in rundown neighborhoods. Although the details are still sketchy, if enacted these proposals would undoubtedly amount to some of the most significant changes in American social policy since the New Deal.

What they have in common is the goal of empowering individuals, families, and the “mediating structures of American society,” as Karl Rove, one of the president’s advisers, recently called them. Instead of looking to Washington to provide assistance to the needy, the Bush administration’s “ownership society” seeks to enable people to look after themselves. Rather than relying on government agencies to solve the nation’s social problems, it views business and nonprofit groups as the main instrument of change. Far from just using the bully pulpit of the White House to encourage Americans to be more responsible, it aims to alter public policies in ways that help people succeed as long as they put in plenty of their own initiative and hard work.

All of this is easier to promote in a campaign than to accomplish. But if its plans go into effect, the Bush administration’s agenda would mean a different kind of relationship for philanthropy with government. Programs that guarantee benefits to everyone who qualifies, such as Social Security or Medicare, which nonprofit groups have counted on to support the needy, will be significantly affected.

Government support for a wide range of social programs will undoubtedly change, too, and attract growing interest from for-profit as well as nonprofit organizations. And higher standards of effectiveness and sustainability will accompany government aid for social programs.

None of those departures should come as a surprise to the philanthropic world. At least since the Reagan administration, the relationship between government and the nonprofit world has been moving in these directions. While nonprofit leaders might not always have agreed with the changes, charitable organizations have so far proven “remarkably resilient,” to borrow a phrase from Lester Salamon, a professor at the Johns Hopkins University. Drawing heavily on ideas from the Reagan era, the extensive list of changes President Bush is proposing will put nonprofit groups to an even tougher test.

Nonetheless, although the Bush administration’s agenda is not without risk, doing nothing would be dangerous, too. Social Security will be unable to meet its benefit obligations to the elderly, starting around mid-century, according to current projections. The Bush administration’s proposal to shift a large portion of retirement savings to private accounts (which grows out of the work of a bipartisan commission) aims to prevent such a social and economic catastrophe. And while other approaches might stave off the collapse of Social Security, they too would probably require adjustments in the relationship between government and philanthropy.

The heart of the matter is that in Social Security, health care, and other areas of policy important to philanthropy, changes are needed. That was not a major theme of the election campaign, but responding to President Bush’s ideas for the “ownership society” will be a major preoccupation for the nonprofit world in the next few years.

Leslie Lenkowsky is professor of public affairs and philanthropic studies at Indiana University and a regular contributor to these pages. His e-mail address is llenkows@iupui.edu.