February 24, 2000 | Read Time: 6 minutes
As the presidential primary season heats up, there is plenty of cause for optimism in the philanthropic world. Each of the major candidates has left no doubt that he favors measures to encourage an increase in charitable giving and a larger role for non-profit groups in providing social services.
Judging from the Clinton administration’s new budget proposals, Al Gore, for example, is firmly behind allowing donors who do not itemize on their returns to claim a charitable tax deduction. George W. Bush has spoken extensively — and glowingly — about the power of faith-based charities to transform lives and bring about social change, and he has proposed expanding the number of government programs that support them, as well as lifting the cap on corporate tax deductions for giving. Bill Bradley has long urged government to do what it can to help “the civil sector” carry out its tasks. And John McCain, despite his opposition to allowing donors to take deductions for the full amount of their appreciated assets, insists that he does not want to hurt the charitable tax deduction, and his aides hint at plans for expanding national service.
Yet those proposals may make less of a difference to charities than the candidates’ stands on issues that go far beyond the immediate interests of the philanthropic world. Indeed, perhaps the most important factor for philanthropic groups will be what the next president plans to do to keep the economy on course.
The extraordinary growth of the philanthropic world in the past two decades has mirrored the economic expansion that began during the presidency of Ronald Reagan and, except for a shallow dip at the beginning of the 1990’s, has lasted until today. Whether the next occupant of the White House pursues policies suited to prolonging it will have a lot more to do with how much Americans give to charity — or how many foundations they establish — than will passage of any set of tax incentives to encourage giving.
The next president will face myriad other key problems, and how he deals with them also will have a big impact on philanthropy. Depending on how the next president chooses to handle Social Security, health care, environmental cleanup, and other issues in which the federal government traditionally has played a big role, non-profit groups may wind up with a larger (or smaller) burden to carry — and not just financially. Keep in mind, for example, that the change in welfare policy devised by President Clinton and Congress in 1996 had more influence on the philanthropic world than any set of spending increases or cutbacks could have had.
The governing philosophy of the next president will matter a lot, too. The resurgence of the philanthropic world in the past two decades has coincided with a growing commitment to the transfer of power from the federal to the state and local levels — a process known as devolution. Even when non-profit groups join together in national coalitions, the energy that leads them to form in the first place, and to press for change, often originates locally, in problems experienced firsthand in neighborhoods and communities. Much of the nation’s philanthropic wealth also is amassed — and is put to use most effectively — at the local level. Presidential efforts that seek to operate in a decentralized fashion (as, for example, AmeriCorps tries to do) are apt to do more for the philanthropic world than those that do not.
Finally, the next president’s views on civic values will affect the non-profit world. Philanthropy is more likely to thrive under an administration that looks favorably on personal responsibility, that is optimistic about tackling difficult challenges, and that approves of those who forgo their own pleasures for the good of others. Though such values develop in a variety of ways, a White House champion can be an especially powerful ally. What a president asks of his fellow citizens, in other words, may be more important for philanthropy than what philanthropy asks of him.
That is not to say that particular policies will not make some difference.
Take the issue of charitable tax deductions for people who don’t itemize on their returns. Long favored by groups such as Independent Sector, the new proposal by the Clinton administration is a worthwhile step toward providing smaller givers with at least one of the tax advantages that wealthier donors enjoy. But it’s not likely to have a large impact on non-profit revenue.
According to a study done for Independent Sector, a similar measure introduced last year in Congress would have increased giving by $3.1-billion annually — not inconsiderable, but still only about 2 percent of what individuals are estimated to be donating now, and well below 1 percent of the non-profit sector’s income from all sources. Moreover, since the Clinton-Gore proposal requires donors to make a minimum of $1,000 in gifts to qualify for the tax de duction — an amount considerably more than is currently donated by the average non-itemizer — the Clinton-Gore version is apt to be even less productive than the version introduced last year.
Even the enthusiasm the candidates share for “faith-based organizations” probably will not translate into substantial new spending on non-profit activity. While all the major candidates embrace the idea of collaborating with such groups, no candidate is likely to use much of the federal budget surplus to do so — at least not as long as the Social Security program is struggling. What’s more, a large number of faith-based groups are reluctant to take government money for fear of having to change the way they operate.
There’s also a potential danger in a proposal that some parts of the philanthropic world favor: overhauling the campaign-finance system. If elected, both John McCain and Bill Bradley have committed themselves to limiting the ability of political groups independent of candidates to raise and spend money to promote their views. Yet, it may not be possible to prevent such restrictions from being applied to the advocacy efforts of other kinds of non-profit organizations, too.
Like any other interest group, the philanthropic world will no doubt continue to press candidates to take specific views on issues that directly affect it. But the policies of the next president that will matter most for philanthropy really are those that will have a broad impact on most Americans. To paraphrase former General Motors head Charles Wilson: “What’s good for philanthropy may be good for America, but what’s good for America will be good for philanthropy.”
Leslie Lenkowsky is professor of philanthropic studies and public policy at the Indiana University Center on Philanthropy and a regular contributor to these pages. His e-mail address is llenkows@iupui.edu.
