Change, Not Charity

Every year at this time, news stories appear about needy non-profits doing God's work, and modern-day Samaritans -- great men and women with names like Kroc, Gates and Annenberg -- laying millions on worthy causes. Our hearts are warmed. We celebrate our generosity. We affirm that we are good people doing good things.

But if you look beyond the rim of your rose-colored glasses, you'll see a bigger picture this year, one that is neither joyous nor heart-warming. Non-profits are desperate. Need is up. Giving is down. Nationwide, charitable giving decreased by 1.2 percent last year, the first drop in 12 years. This year's numbers aren't expected to be any better.

But the disaster-in-the-making we face is bigger than this. Its magnitude began to come into focus after I read a story about the mayor of Somerville, Massachusetts going to that city's non-profits, pleading with churches, charities and nursing homes to make donations to the city to pay for the police and fire departments. A week later, I read another story about city officials in Pittsburgh doing the same thing. Here in L.A., we've only just put our toe in the water. The city recently began charging local non-profits a $750 usage fee for park use (tables, clean-up and utility hook-up not included.) This time next year, non-profits may be asked to adopt-a-cop. But trust me, all the non-profits in Christendom can't make up what government increasingly leaves unfunded.

Make no mistake: Our crisis in public services is not simply a result of the economic downturn. Some of us have been watching America's shrinking commitment to public infrastructure and the taxes that pay for them for some time. Expecting charity to "make up the difference" of what government fails to provide was never more than a pipedream. When the economy heads south, even the well-to-do reach for their wallets -- and it's not usually to open them. A recent Wealth + Values study found the wealthy feel more compelled to give to charities than they did three years ago, but they don't plan to part with an extra red cent this year.

Philanthropic institutions are searching for an appropriate response. A recent study of non-profit funding conducted by Venture Philanthropy Partners in collaboration with McKinsey & Company predicts tough times ahead and recommends that more charitable dollars be directed to advocacy. Policy change, they conclude, is the only way to get beyond increasing demand for non-profit services and a decreasing supply of money to provide them. In fact, philanthropic spending priorities are shifting as foundations begin to place greater emphasis on changing the policies that have brought us to this brink.

Traditionally, philanthropy preferred to steer clear of advocacy and fund social services instead, but that reluctance is waning. The Ford Foundation has placed new emphasis on "strategic philanthropy" focused on policy change. The Pew Charitable Trusts recently decided to change its legal status from a private foundation to a public charity in part because public charities are constrained by fewer rules regarding advocacy and lobbying.

Individual philanthropists -- many of whom are middle-class people with good hearts, not the gazillionaires the media swoon over -- might also respond to this crisis by re-evaluating their traditional giving patterns and putting more emphasis on change, not just charity. Next year, incredibly, we face proposals for more federal tax cuts that will further shrink government's ability to provide basic services. Non-profits will stagger and fail under the weight. Where and how will this end? Your checks this year could make a difference.

Torie Osborn is the executive director of the Liberty Hill Foundation. This article originally appeared in the LA Times.

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