Opinion: The Risks of Government Aid

Charities that seek and accept government grants might be doing themselves long-term harm, argues a Syracuse University professor in an opinion article in The Wall Street Journal.

Government money for charities, notes Arthur C. Brooks, a professor at Syracuse University’s Maxwell School of Public Affairs, is cyclical and can disappear when the economy falters or other issues take political priority. Unlike government spending, private donations are more stable across time, he argues.

As a warning, he cites the case of a charity in New York State that relied heavily on subsidies and had to cut services—and leave its patrons without help—when the state reduced its budget.

But “volatility” isn’t the only problem with government money, Mr. Brooks says. People donate less to charities that receive such money because they see less need to help. In addition, charities themselves spend less time raising funds when government money is available.

Therefore, despite optimism among nonprofit leaders about the new Congressional regime in Washington and the likelihood more federal aid will flow to charities, they would do well to remember, Mr. Brooks says, that “the bottom line is that there nothing free about cash from the government.”

Read The Chronicle of Philanthropy’s coverage of Mr. Brooks’s new book and a transcript of an online discussion with him.

(A paid subscription is required to view the Chronicle and Journal articles, but the discussion transcript is available free.)