Archive for March, 2009


Tuesday, March 31st, 2009


“Are Nonprofits Trustworthy? New Opinion Survey from the Indiana Nonprofit Sector Project.” Press Release March 23, 2009.

“Financial Safety Net of Nonprofit Organizations Is Fraying, Survey Finds.” By Stephanie Strom. The New York Times. March 26, 2009. This article reports the findings of a new survey by the Nonprofit Finance Fund, America’s Nonprofits in Danger.

“Pay at Nonprofits Gets a Closer Look.” By Mike Spector & Shelly Banjo. Wall Street Journal. March 27, 2009.

Arts & Culture

“Problems Persist, but Arts Advocates See Progress Under Obama.” By Robin Pogrebin.
The New York Times. March 25, 2009.


“Foundations Oppose Call to Target Grants.” By Mike Spector. Wall Street Journal. March 23, 2009.


“In tough times, private schools take innovative approaches to fundraising
Independent schools in L.A. are using videos, auctions and home parties to emphasize the message that in these challenging economic times, giving is more important than ever.”
By Carla Rivera. Los Angeles Times. March 23, 2009.

“The Yale Effect Spreads Out.” By Lisa Prevost. The New York Times. March 25, 2009.

“School-Voucher Movement Loses Ground After Democratic Gains.” By Robert Tomsho. Wall Street Journal. March 25. 2009.

Health Care

“Shady AIDS Charity With a Big Web Campaign.” By Christopher Weaver. ProPublica. March 24, 2009


“Aid Groups’ Expulsion, Fears of More Misery.” By Lynsey Addario & Lydia Polgreen.
The New York Times. March 23, 2009.

Law/Public Policy

“Foundation Tax-Policy Change Aims to Encourage Giving.” By Mike Spector. Wall Street Journal. March 24, 2009.

Media & Publishing

“Newspapers could get nonprofit status.” no by-line. Boston Globe/ Bloomberg News. March 25, 2009

“Consider This: NPR Achieves Record Ratings.” By Paul Farhi. Washington Post. March 24, 2009.

“Yale University Press faces setbacks.” By Katie Falloon. Yale Daily News. March 25, 2009.


“Sorry, Cinderella: Cuts Squeeze Gown Charity.” By Christina Binkley. Wall Street Journal. March 26, 2009.

Connecticut Parish Finances Battle — the Back Story

Tuesday, March 24th, 2009

The New Haven Advocate reports in its March 17 issue that the intensity of the battle over the proposal to reform the financial management of Catholic parishes in the state was driven by conservative Catholics’ desire to punish members of the legislature who had supported the legalization of gay marriage in the state.

Although the legislators who introduced the bill were not connected to the effort to permit same-sex marriage, two members of the Judiciary Committee, which was to discuss possible legislation, were not only supporter to gay marriage, but were openly gay.

These two legislators became targets of the conservatives who gathered at the state capitol last week. “It was supposed to be a fight over church sovereignty,” the Advocate article stated, “but it quickly devolved into a gay-bashing bonanza and a platform for Catholics to blame two openly homosexual lawmakers for every setback their political agenda has suffered.

“In just three days,” it continued, Lawlor and McDonald, the two openly gay legislators, “were inundated with more than 10,000 e-mails and phone messages from all over the country, threatening and harassing them for even considering opening a dialogue of the topic.”


Tuesday, March 24th, 2009

From throughout the country, from California to Connecticut, come reports of nonprofits arts organizations shutting down, laying off employees, cutting programs, selling assets, and taking other drastic measures to cope with the economic downturn.

Atlanta’s resident Shakespeare company is asking “to be or not to be?”, while its symphony orchestra has announced pay cuts.

• In Los Angeles, the Getty Trust reports that its endowment has dropped 25% in value and that it will have to slash its budget.

The Hartford-based Connecticut Opera Company has curtailed its season and permanently suspended operations. With state funding for the arts on the chopping block, nonprofit arts organizations of every kind face major declines in revenue.

• In Chicago, the Arts Institute, attempting to bolster its sagging revenues with a 50% increase in admissions fees, is threatened by angry city officials with termination of the $6.6 million annual subsidy it receives from the taxpayers.

• In Maryland, the Baltimore Opera Company announced its liquidation. In nearby Washington, D.C., the Master Chorale, a long-running chorus group announced that it was wrapping up its affairs.

• New York’s Metropolitan Opera announced that it put up its celebrated Chagall murals as loan collateral and was requesting a 10% pay cut from its musicians for the coming season. At the same time, the Metropolitan Museum of Art announced that it was laying off 75 employees. In response to efforts by nonprofits to shore themselves up financially by selling off assets, a bill has been introduced into the New York legislature to prohibit museums from using proceeds from the sale of artworks to defray operating expenses.

The Philadelphia Orchestra announced salary cuts, layoffs of administrative staff, and the cancellation of a planned European tour. Its financial troubles have left it leaderless, lacking a board chair, CEO, and music director.

The financial distress of arts organizations is not hitting only vulnerable new organizations or marginal ones, like the Baltimore and Connecticut operas, but also such world-class institutions as the Chicago Arts Institute, the Metropolitan Opera and Metropolitan Museum of Art, and the Getty.

In view of some of the press coverage of arts funding while the stimulus package was being debated in Congress, the financial implosion seems surprising. In mid-February, the New York Times was reporting that, with the help of celebrities like Robert Redford, the arts community had succeeded in convincing Congress that ” the arts provide jobs as other industries do, while also encouraging tourism and spending in general” — that ““ticket takers or electricians or actors — all the people connected with the arts are at risk just like everybody else is.” (Redford pointed out that his Sundance Film Festival pumps $60 million into the Utah economy annually).

In the end, the bill sent to the White House promised a $50 million increase in the budget for the National Endowment for the Arts, most of which would be distributed through state, regional, and local arts agencies.

In the wake of this, the Wall Street Journal sounded a cautionary note in an op-ed piece by music critic Greg Sandow. “The arts,” he warned, “need better arguments.” While praising the $50 million dollar increment to the NEA budget, that amount ” is just a bubble on a wave. It’s a rounding error, a random fluctuation. It doesn’t mean that arts support runs deep and strong.” While acknowledging the economic significance of the arts and cultural tourism, he doubted that this argument alone made the case for the arts — since many other industries contributed to economic vitality as well. In the end, he concluded, “the arts are going to need a better strategy” if they want to convince the public and politicians to support the arts more generously.

The anguish of arts communities throughout the country suggests that Sandow is right. Robert Redford and his fellow advocates for the arts may have been able to persuade Congress’s Democratic leadership, but that may not be enough. Because the stimulus money will be largely distributed through the states — and state budgets are in far worse shape that the federal government’s — we can be sure that every effort will be made to divert money intended to support the arts to other purposes.

Connecticut’s Republican Governor Jodi Rell could slash from her proposed budget all cultural resource grant funding (a major revenue source of nonprofit arts organizations), despite the enormous contribution of cultural tourism to the state’s economy, it seems likely, as Sandow fears, that arts funding will fare even less well in less enlightened — or more financially hard-pressed — states.

Another Wall Street Journal report, under the title, “Arts Groups Lose Out in Fight for Funds,” which appeared in mid-March, pointed out that arts groups were among the nonprofits most dependent on individual, foundation, and corporate contributions — the sources of revenue most impacted by economic downturns. “About 10,000 arts organizations, or 10% of the U.S. total, are at risk of folding,” the article declared, citing as its source Americans for the Arts, a nonprofit lobbying group in Washington, D.C.

Major Nonprofit Stories (3/16/09-3/22/09)

Sunday, March 22nd, 2009


“Giving and Taxes.” Editorial. The New York Times. March 20, 2009.

Arts & Culture

Hartford’s Cultural Institutions Take Steps To Weather Economic Storm.” By Frank Rizzo. Hartford Courant. March 22, 2009.

“Cash-Strapped ATL Shakespeare Co: To Be or Not To Be?” By Richard Eldredge. Atlanta Journal-Constitution. March 20, 2009,

“Master Chorale to Shut Down in May.” By Anne Midgette. Washington Post. March 20, 2009.

“Atlanta Symphony Orchestra announces pay cuts.” Atlanta Journal-Constitution. March 19, 2009.

“Powerful alderman threatens Art Institute subsidy over admission fee increase.” By Hal Dardick. Chicago Tribune. March 18, 2009.

“Arts Groups Lose Out in Fight for Funds.” By Mike Spector. Wall Street Journal. March 18, 2009.

“Bill Seeks to Regulate Museums’ Art Sales.” By Robin Pogrebin. The New York Times.
March 18, 2009.

“Getty Trust to slash budget as investments tumble: Its portfolio dropped 25% during the last half of 2008, from $6 billion to $4.5 billion.” By Mike Boehm. Los Angeles Times. March 16, 2009.


“As Detroit Struggles, Foundations Shift Mission.” By Stephanie Strom. The New York Times. March 22, 2009.

“Downturn slows elite charity events; Even regulars fear taking on pledges.” By Stephanie Ebbert. Boston Globe. March 20, 2009.

“Taxes Not Seen as Making the Rich Flee New York.” By Nicholas Confessore. The New York Times. March 19, 2009.

“Study Shows First-Time Online Donors Often Do Not Return.” By Stephanie Strom. The New York Times. March 18, 2009.


“Harvard to reduce dependence on drawing from endowment.” By Tracy Jan. Boston Globe. March 20, 2009.

“HKS Allows Article Access.” By Niha S. Jain. Harvard Crimson. 3/18/2009

“Rose Clan Protests Brandeis Proposal: Family Demands Art Museum Stay Open to Public.” By Geoff Edgers. Boston Globe. March 17, 2009.

Health Care

“To stave off layoffs, Beth Israel doctors agree to give $350K Department heads also ask other staff to donate money.” By Jeffrey Krasner. Boston Globe. March 20, 2009.

“Milton Hospital finances in a bind Investments, patient drop-off taking toll.” By Jeffrey Krasner. Boston Globe. March 17, 2009.


“Habitat Adds Demolition to Its Mission.” By Monica Davey. The New York Times. March 19, 2009.

In Memoriam

“Martin Knowlton, Co-Founder of Elderhostel, Is Dead at 88.” By William Grimes. The New York Times. March 20, 2009.

Law & Public Policy

“Charities Give to State Campaigns, Despite Law.” By Danny Hakin & Jeremy W. Peters. The New York Times. March 17, 2009.


“Holy War: How Catholic leaders turned a debate over church-state separation into a gay-bashing bonanza.” By Andy Bromage. New Haven Advocate. March 17, 2009.

“When the Pastor Says It’s ‘A Time to Sow.’” By Fred Barnes. Wall Street Journal. March 19, 2009.


“Ranks of unemployed workers fuel a surge in volunteerism.” By Heather Lalley. Boston Globe/Associated Press. March 19, 2009.

“House Passes Expansion of Programs for Service.” By David M. Herzenhorn. The New York Times. March 19, 2009.

“From Ranks of Jobless, a Flood of Volunteers.” By Julie Bosman. The New York Times. March 16, 2009.

Youth Serving Organizations

“Girl Scouts shake up the recipe; Offer new message, mission.” By Irene Sege. Boston Globe. March 21, 2009.

“Y.M.C.A. to Let Campers Choose What to Pay.” By Winnie Hu. The New York Times. March 19, 2009.

Extra! Extra! Check out special section on museums in today’s (3/19) New York Times!

Thursday, March 19th, 2009

Today’s New York Times features a special section on museums that includes a wealth of pertinent articles on nonprofits.

In addition to pieces on new institutions and current exhibitions, the section includes such articles as:

“When the Gallery is a Classroom,” which discusses Obama administration support for arts education

“Homage to a Man and His Chocolate Factory” celebrating philanthropist and confectioner Milton Hershey

“Taking a Step-by-Step Approach to Growth,” about how museums are avoiding slashing programs by stretching resources

“Shovels Sit Idle as Some Projects Are Delayed,” about the impact of the economic downturn on museums

“A Trustee Who Defined an Era of Corporate Giving,” about Bruce Dayton, the Twin Cities’ leading philanthropist and nonprofit leader

Regulating Parish Finances in Connecticut: Whither the Law?

Tuesday, March 17th, 2009

Coming on top of the protracted clergy sex abuse scandals of the past decade, a series of lurid financial scandals in which clergy had looted the funds of wealthy parishes in Darien and Greenwich, moved the Judiciary Committee of the Connecticut state senate to consider a bill to reform financial governance in Roman Catholic congregations.

The step was not lightly taken: Connecticut is a historically Catholic state and the church hierarchy wields powerful political clout. But the provocations were serious. In Darien, the Rev. Michael Jude Fay stole more than a million dollars, which he used to support a lavish lifestyle. In Greenwich, Rev. Michael Moynihan was found to have more than two million dollars in off-the-book bank accounts and $400,000 in credit card balances.

The legislation proposed to create “lay councils of seven to 13 people to oversee the finances of local parishes, relegating Catholic pastors and bishops to an advisory role.”

Spokesmen for the church denounced the bill as “‘irresponsible’ and said critics looking to ‘reform’ the church are really seeking to change its essential nature.” “The Catholic Church is not structured” as a democracy. “This is not something we can change. This is the law of the church.”

The announcement of hearings on the bill touched off massive demonstrations that brought thousands of clergy and laity to Hartford to oppose the legislation — a day after the Judiciary Committee announced that the legislation was not longer on the table.

While the Catholics won this battle, churches may not win the war to maintain their privileged position under the law. As increasing numbers of church incorporate as nonprofits and seek federal tax exemptions, they may be strengthening the “neutral principles of law” approach to religious bodies that is in many ways inimical to the position they have enjoyed for the past century. [On this, see Perry Dane. 1998. "The Corporation Sole and the Encounter of Law and Church." In N.J. Demerath III (ed.), Sacred Companies: Organizational Aspects of Religion and Religious Aspects of Organizations. New York: Oxford University Press, 52].

Since the 1870s, it had been settled law that, out of deference to the Free Exercise Clause of the First Amendment to the U.S. Constitution, civil courts deferred to the internal rules of church governance in the adjudication of religious disputes: as legal scholar Ira Ellman put it, internal church disputes had been, since the 1870s, “driven from the tribunal.”

This hands-off stance has been changing: as David Young and Steven Tigges suggested, plunging into the “religious thicket” in adjudicating the constitutional limits of civil court jurisdiction. [See David J. Young & Steven W. Tiggs. 1986. "Into the Religious Thicket: Constitutional Limits on Civil Court Jurisdiction over Ecclesiastical Disputes." 47 Ohio State Law Journal 475]. The law has been moving in this direction for some time. In 1990, in Employment Division v. Smith [494 US 872], the United States Supreme Court upheld an Oregon law criminalizing peyote use as a sacrament by the Native American Church, ruling that the law was a “non-discriminatory law of general applicability.” In other words, the state’s “compelling interest” in maintaining the “financial integrity” of its unemployment system outweighed the plaintiff’s First Amendment rights of free exercise.

Partially in response to this decision, religious groups lobbied Congress to enact legislation that would prevent the passage of laws that substantially burdened free exercise of religion. The Religious Freedom Restoration Act became law in 1993.

In 1995, the City of Boerne, Texas brought suit against the Archbishop of San Antonio over a zoning issue. The Archbishop wanted to enlarge an historic church that was protected by historic district status. The city denied permission for the alterations in the face of arguments by the church that the historic district ordinance substantially burdened the its exercise of its free exercise rights.

The case reached the U.S. Supreme Court in 1997. The court ruled the Religious Freedom Restoration Act unconstitutional because, as in the Employment Division case, the historic district ordinance — a “non-discriminatory law of general applicability” — trumped the First Amendment.

The fiduciary mandates of the Internal Revenue Code and state corporation laws, as well as anti-fraud statutes, unquestionably have the character of non-discriminatory laws of general application. Both the federal government and the states certainly have a compelling interest in ensuring that charitable property subsidized by deductibility and tax exemptions are not stolen, wasted, or used in ways contrary to the public interest.

But does the line between free exercise and substantial burden actually lie? Or, more accurately, where are legislators and jurists likely to locate it?

Hartford Courant correspondent Daniela Altimari concluded her series of articles on the Connecticut fracas with a thoughtful piece titled “Catholics’ Clout In Connecticut Diminished, But Nowhere Near Gone.” While conceding that the previous week’s crusade against parochial financial reform was a clearcut victory for the Catholic hierarchy, she judged it a surprising one. In the face of “declining numbers, internal scandals and a flock increasingly less apt to heed the hierarchy,” she observed, the bishops have increasingly “found themselves on the losing side of several key battles, from same-sex civil unions to state funding for embryonic stem cell research.”

In a state led for decades by Catholic politicians, Altimari noted, “lawmakers who were once deferential to the church were proposing bills that directly challenged its authority. In Connecticut, lawmakers doubled the civil statute of limitations for suing for childhood sex abuse and considered, but didn’t pass, a measure that would have required priests to report cases of sexual abuse that they heard about during confession if a child’s safety was in jeopardy.” Over the past decade the percentage of Connecticut residents identifying themselves as Catholics has fallen from fifty to thirty-eight percent — and this in a broader context in which, according to Trinity College’s 2008 American Religious Identification Survey, the overall number of respondents professing a religious preference fell from eight-nine to sixty-one percent.

In this context, the crushing the financial reform measure gave the Catholic church not only “a rare taste of victory” but one that may become rarer as the relation between the law and the church changes.

As Justice Holmes reminded us in the introduction of The Common Law (1881):

The life of the law has not been logic: it has been experience. The
felt necessities of the time, the prevalent moral and political
theories, intuitions of public policy, avowed or unconscious, even
the prejudices which judges share with their fellow-men, have had
a good deal more to do than the syllogism in determining the
rules by which men should be governed. . . .

Major Nonprofit Stories (3/9/09-3/15/09)

Sunday, March 15th, 2009

Arts & Culture

“Notes of Distress and Discord From the Esteemed Philadelphia Orchestra.” By Daniel J. Wakin. The New York Times. March 12, 2009.

“Recession forcing layoffs at Sesame Workshop.” Chicago Sun-Times/Associated Press.
March 12, 2009.

“Baltimore Opera to Liquidate.” By Tim Smith. The Baltimore Sun. March 13, 2009.

“Metropolitan Museum of Art to shrink staff.” Los Angeles Times. March 12, 2009.

“74 Are Laid Off at Met Museum; More May Follow.” By Randy Kennedy. The New York Times. March 13, 2009.


“Secular Education, Catholic Values.” By Javier C. Hernandez. The New York Times.
March 9, 2009.


“Georgetown Dean to Lead Philanthropic MacArthur Foundation.” By Neely Tucker.
Washington Post. March 9, 2009.

Health Care

“Plan could lead to reopening of King hospital: A tentative agreement would allow the troubled Los Angeles County facility near Watts to resume inpatient and emergency services by 2012 in cooperation with UC. Hiring would start from scratch.” By Garrett Therolf. Los Angeles Times. March 12, 2009.


“A Funeral Museum at Death’s Door.” By Dirk Johnson. The New York Times. March 9, 2009.

“National Academy Revises Its Policies.” By Robin Pogrebin. The New York Times. March 14, 2009.


“World’s billionaire club falls 30%, Forbes says in annual tally.” March 11, 2009.

Politics and Social Movements

“In Environmental Push, Looking to Add Diversity.” By Mireya Navarro. The New York Times. March 10, 2009.


“Measure takes aim at church operations.” By Mary E. O’Leary. The New Haven Register. March 9, 2009

“Catholics protest ‘maltreatment’ by Conn. leaders.” By Susan Haigh. Washington Post/Associated Press. March 11, 2009.

“Sen. Andrew McDonald: “Never My Intent To Offend Anyone of Faith.” By Christopher Keating. Hartford Courant. March 11, 2009.

“Catholic Governance Bill Dies In Connecticut.” By Daniela Altimari. Hartford Courant. March 11, 2009.

“Church Finances: Catholics Gather At State Capitol To Protest Church Finance Bill.” By Daniela Altimari. Hartford Courant.
March 12, 2009.


“Top SEIU official in California quits three posts: Annelle Grajeda resigns after a probe into whether she played a role in payments to her ex-boyfriend. That inquiry found no wrongdoing. She will take a different job with the union.” By Paul Pringle. Los Angeles Times.

“Finances of charity run by SEIU official scrutinized: The union officer gets more from the nonprofit, run from his home, than from his full-time San Francisco transit job. He’s also paid for use of the home and his son is on the charity payroll.” By Paul Pringle. Los Angeles Times. March 11, 2009.

Why so little coverage of NGOs?

Wednesday, March 11th, 2009

The New York Times’s article on Ela Bhatt’s SEWA (Self-Employed Women’s Association), “An Empire for Poor Working Women, Guided by a Gandhian Approach.” which appeared last weekend was one of only five articles on NGOs to appear in the paper since the first of the year. The Washington Post has done slightly better, with twenty articles mentioning (though not featuring) NGOs. The Wall Street Journal, which provides superb coverage of American nonprofits, ignored organizations beyond our borders.

As Lester Salamon has forcefully reminded us, our own nonprofit sector emerged as part of a global associational revolution and remains very much part of it.

It is a shame that the American press, which takes little enough interest in nonprofits and philanthropy, shows no interest at all in nonprofit activity beyond our borders.

Major Nonprofit Stories (3/1/09-3/8/09)

Tuesday, March 10th, 2009

“Keeping the Faith, Ignoring the History.” Oped. By Susan Jacoby. The New York Times.
March 1, 2009.

“George Mason University, Among First With an Emirates Branch, Is Pulling Out.” By Tamar Lewin. The New York Times. March 1, 2009.

“Blogs In, Badges Out as Girl Scouts Modernize Amid Falling Membership, Group Is Rebranding Itself, but Cookies Will Remain.” By Megan Greenwell. Washington Post.
March 2, 2009.

“Charities Say Tax Changes Add to Pain.” By Robert Guth and Mike Spector. Wall Street Journal. March 2, 2009.

“Charitable-Giving Plan Divides Nonprofit Groups and Worries Donors.” By Holly Hall. Chronicle of Philanthropy. March 2, 2009.

“Up to 300 Will be Fired.” By Isaac Arnsdorf and Victor Zapana. Yale Daily News.
March 2, 2009.

Philanthropy and Its Enemies: Activists want to redistribute foundation wealth based on racial quotas.” OpEd. By Naomi Schaefer Riley. Wall Street Journal. March 3, 2009.

“Some Explaining to Do: Harvard Must Detail Finances to Make cuts in Allston and Elsewhere.” Editorial. Harvard Crimson. March 3, 2009.

“A Modern Mr. Harkness: Harvard’s Losses Position It Well as a Beneficiary but Perpetuate a Paternalistic Norm “ By Noah M. Silver. Oped. Harvard Crimson. March 3, 2009.

“Nonprofit hospitals targeted on leader pay; Boards must hold line, senator says.” By Lisa Wangsness. The Boston Globe. March 4, 2009.

“University Justifies Investment Strategies.” By Isaac Arnsdorf. Yale Daily News. March 4, 2009.

“The Met Offers Chagalls as Collateral.” By Daniel J. Wakin. The New York Times. March 4, 2009.

“Going the Nonprofit Route”A Social Solution, Without .” By Marci Alboher. The New York Times. March 5, 2009.

“Charities Say Government Is Ignoring Them in Crisis.” By Stephanie Strom. The New York Times. March 5, 2009.
For text of the “manifesto” to which this article refers, go to

“Mother Jones Tests Nonprofit Model in Race to Survive the Recession.” By Tim Arango. The New York Times. March 7, 2009.

“An Empire for Poor Working Women, Guided by a Gandhian Approach.” By Somini Sengupta. The New York Times. March 7, 2009.

“Parents Sue Trustees Over Prep School’s Shutdown.” By Geraldine Fabrikant. The New York Times. March 7, 2009.

“Schuyler Chapin, 86, Dies; Champion of Arts.” By Daniel J. Wakin. The New York Times. March 8, 2009.

“the partnership between us and the government isn’t working, and that’s not good for the country”: Obama, Tax Policy, and Charitable Giving

Tuesday, March 10th, 2009

The President’s proposal to reduce the value of the charitable deductions for the wealthiest Americans has sparked concern in nonprofit circles.

Aimed at taxpayers with incomes exceeding $250,000, the proposals would increase tax rates on incomes from 33 or 25 percent to 36 and 39.6 percent by 2011. At the same time, the value of the deduction would shrink from 33 or 35 cents for each dollar donated to 28 cents.

Evidence suggests that concerns about the impact of reduced tax benefits on giving may be exaggerated.

To begin with, according to Independent Sector, only 12.3 percent of nonprofit revenues come from charitable contributions (though the proportion varies by industry, with religious bodies deriving 95 percent of their revenues from contributions and education, health, and human services deriving between 47 and 56 percent from donations). 88 percent of secular nonprofit revenues are derived from earned income rather than donations.

Secondly, a relatively small proportion of taxpayers (29.9%) are itemizers who receive any tax benefit for their contributions. The vast majority of charitable donors, most of them donors to religious bodies, do not itemize their deductions. Clearly, their giving is not incentivized by expectation of tax benefits.

The well-known phenomenon of the “U-shaped curve” in giving, which shows that the highest levels of giving come from the richest and poorest donors, raises questions about the significance of anticipated tax savings as a motive for giving. [James & Sharp]

Thirdly, there are very real questions about whether anticipated tax savings are effective as incentives for giving. It is an unquestioned historical fact that large-scale charitable giving took place without tax incentives: for nearly three centuries before the enactment of the Sixteenth Amendment in 1913, Americans donated their time and money to support organizations and causes in which they believed; even in the early twentieth century, the great gifts from Mrs. Sage ($23 million), Andrew Carnegie ($300 million), and John D. Rockefeller ($550 million) that created the first American foundations were given without any expectation of tax benefit.

Fourthly, studies of long-term trends in giving, such as Colin B. Burke’s “Nonprofit History’s New Numbers,” suggest that the impact of tax policy may actually depress rather than increase giving. Burke’s data, which goes back to 1929, shows that the charitable giving of Americans did not increase significantly with the introduction of universal income taxations, high tax rates, and charitable loopholes in the 1940s. From 1929 to 1963, individual giving steadily increased — from 1.5 percent of personal disposable income to 2.7 percent — then has fallen steadily since. The increase of slightly more than 1 percent in giving, recorded between 1929 and 1963, hardly suggest that tax policy has a powerful impact. The continuing decline of individual giving over the past forty-five years, despite substantial tax incentives and jawboning by political leaders and nonprofits trade associations suggests that giving based on calculations of tax savings may actually be less than giving based on values commitments.

Studies of the impact of religious affiliation and giving affirm this conclusion. Groups that embrace tithing (dedicating 10 percent of one’s income to charity) give at far higher levels than those that do not — regardless of income [On this, see Dean R. Hoge, Charles Zech, Patrick McNamara, & Michael J. Donahue. 1996. Money Matters: Personal Giving in American Churches. Louisville: Westminster John Knox Press]. Further, states where taxpayers give the highest proportion of adjusted gross income are among both the poorest and those with the highest proportion of evangelical Protestants in their populations. Clearly values are more powerful drivers of giving than calculations of tax savings.

In view of the weak evidence supporting tax policies intended to motivate donors and the small role of giving as a source of nonprofit sector revenue, the “manifesto,” “Forward Together: Empowering America’s Citizen Sector for the Change We Need,” issued by the Center for Civil Society Studies at Johns Hopkins University seems a bit overwrought. []. Lester M. Salamon, Director of the Center, declared that the President’s proposals suggest that “the partnership between us and the government isn’t working, and that’s not good for the country.”

Salamon’s “call to action” urges stronger partnerships between the “citizen sector” and government to address the challenges faced by the nation and calls attention to the “capabilities” of the sector. Detailing these, the manifesto hails nonprofits as “agents of change, incubators of innovation, and crucibles for some of our boldest experiments and highest ideals. . . . [As] partners in public service sheltering the homeless, training the unemployed, educating our youth, building affordable housing, counseling families, delivering health care, giving voice to the powerless, enriching our lives with arts and culture, and serving uniquely as vehicles for citizen initiative in support of the common good.”

Needless to say, the enactment of policies intended to strengthen giving and volunteering as well as direct government support for nonprofits are an important part of the proposal.

Though a number of nonprofit executives, consultants, and scholars support manifesto, some leaders in the field are skeptical. Pablo Eisenberg, a long-time champion of nonprofit groups, declined to sign on to the “Forward Together” document because he believes wealthy foundations should be doing more to support those groups. “Nonprofits need to first look to their own community to help them out before asking the government to pitch in,” Mr. Eisenberg said, according to the New York Times. The Chronicle of Philanthropy quoted Eileen R. Heisman, president of the National Philanthropic Trust, in Philadelphia: “My best guess is that this wouldn’t have a huge effect, but because of the economy it is going to have a worse effect.” Many experts believe that the impact of lowering the deduction is exaggerated. “Every time people want to fool around with the tax code, [charities] say it will be the end of philanthropy,” said Bruce Flessner, a Minneapolis fund-raising consultant. “I don’t think it will kill giving.”

Whatever the impact of the President’s tax policies on giving and on the federal government’s relationship to the nonprofit sector, the willingness of an academic research enterprise to advocate for the special financial and policy interests of the industries it is supposed to be studying is disturbing.

“Charities Say Tax Changes Add to Pain.” By Robert Guth and Mike Spector. Wall Street Journal. March 2, 2009.

“Charitable-Giving Plan Divides Nonprofit Groups and Worries Donors.” By Holly Hall. Chronicle of Philanthropy. March 2, 2009.

“Charities Say Government Is Ignoring Them in Crisis.” By Stephanie Strom. The New York Times. March 5, 2009.

For text of the “manifesto” to which this article refers, go to – Individual Income Tax Returns, preliminary data, 2006. Statistics of Income Bulletin, Spring 2008. By Brian Balkovic

Colin B. Burke. 2001. “Nonprofit History’s New Numbers (and the Need for More).” Nonprofit & Voluntary Sector Quarterly 30: 174.

Russell N. James & Deanna L. Sharpe. 2007. “The Nature and Causes of the U-Shaped Charitable Giving Profile. Nonprofit & Voluntary Sector Quarterly 36(2), 218-238.

Dean R. Hoge, Charles Zech, Patrick McNamara, & Michael J. Donahue. 1996. Money Matters: Personal Giving in American Churches. Louisville: Westminster John Knox Press.

Dean R. Hoge, Charles Zech, Patrick McNamara, & Michael J. Donahue. 1999. “Giving in Five Denominations.” In Mark Chaves & Sharon L. Miller (eds.), Financing American Religion. Walnut Creek: AltaMira Press.

Peter Dobkin Hall. 2005. “Religion, Philanthropy, Service, and Civic Engagement in Twentieth Century America.” In Arthur C. Brooks (ed.), Gifts of Time and Money: The Role of Charity in America’s Communities. Lanham: Rowman & Littlefield Publishers.