As we are all well aware of the current economy is pretty much sucking the life out of most charitable giving, and this includes the many sites around Maine of historic nature. I am afraid that I must say that we should all prepare for darker days ahead. Many societies and preservation efforts depend upon endowments and large grants from private corporations, and/or various governmental bodies.
These funds are rapidly diminishing. The money that supplies these sources of major funding is drying up, for two main reasons. One; the economic stress has devalued the stock markets to the point where many of these charitable trusts are no longer making the income that they once enjoyed. In fact, many have begun bankruptcy proceedings as they cannot meets commitments. Two; the federal tax codes, as well as many other regulatory procedures and standards are changing.
I read in a PRNewswire release the other day about an organization called National Committee for Responsive Philanthropy (NCRP). This organization is very closely allied with the Obama administration, and it appears as though much of their proposals will not only be accepted, but strongly adhered to by this administration.
The article says; “Today, the National Committee for Responsive Philanthropy (NCRP) released a report with a set of benchmarks for what they call, “Philanthropy at its Best.” However, despite its name, The Alliance for Charitable Reform believes these benchmarks have nothing to do with measuring effectiveness. In fact, the natural consequence of these benchmarks will be to reduce the scope and diversity of the foundation sector to one that serves a more narrow set of highly politicized interests.” The standards referenced to in this article include many which would automatically bar most non-social based organizations, such as historical societies and museums from receiving any funds from sources under the proposed set of standards.
The article goes on to say; “NCRP’s campaign is intended to pick winners and losers in the charitable community. If they get to impose their standards, a multitude of organizations could lose funding because each fails to meet NCRP’s criteria for “high value” grantmaking.” These standards have more to do with promoting an agenda that is contrary to what America has stood for than they do with making certain that funding goes to well deserved organizations.
A Forbes article carries the issue further. In describing the NCRP report, the writer, Heather Higgins says “that this paper is not only replete with flawed logic, poor economic understanding and selective data, but is most disingenuously an Orwellian world of deliberate redefinition, where benign and admirable words are used but have meanings very different from common understanding….” One of the bottom line points of this report by the NCRP suggests that “For foundations to qualify as having good values, in NCRP’s worldview, at least 50% of their grants must go to charities that explicitly target lower income or designated ethnic and marginalized groups.”
I don’t know about you, but I don’t see that there are any groups in the state of Maine that would qualify under these guidelines. Can you imagine, say the Milo Historical Society, having to revamp their entire program just so they can accommodate a minority group of which there is no population of in that community? Just so they could receive a grant to repair and restore one of the towns historic homes?
An AP article says “The economic downturn has forced states around the country to shutter historic sites and reduce visiting hours for parks.” Many areas of the country are suffering from the economic woes of today, and regulation affecting charitable foundations as proposed by the NCRP will only make matters worse. It is bad enough that the capital gains exemptions have been removed, but added to that is the increase in the tax rates of people earning over $250,000 per year. It is the wealthy that keep this country running, not the poor.
The American magazine carries the story to an even greater depth when they say “The Obama plan would reduce charitable giving by $4 billion—the equivalent of closing the Gates Foundation.” The article by Leslie Lenkowsky opens with “The unveiling of President Barack Obama’s first budget has prompted a mixed reaction in the philanthropic world. On the one hand, it marks a clear shift toward increased spending on the kinds of initiatives nonprofit groups have long favored, …On the other, it would reduce the incentive for the rich to give by curtailing the value of their charitable tax deductions.”
The current administration’s budget “…includes money for a “Social Innovation Fund” and expansion of national service…” More money is going to be diverted to organizations that serve a greater social good, such as welfare support organizations, and less will be available to other non-public service organizations. In other words, the bottom line of the Obama agenda is that if you do not primarily provide a service that increases the public’s reliance upon the government, i.e. food distribution, section 8 housing, homeless shelters &c, than you can forget about public funding.
That same article closes with “But the real challenge in President Obama’s budget is not just the change in the charitable tax deduction. It is also the era of large government the budget seeks to usher in.” Need I say more?
We’ll be addressing this issue more as time goes on, both here in this blog and on my weekly internet radio show, Touring Maine’s History, which you can listen to here, or via the podcast player to the left. I think the bottom line here is that your organization should take another look at how you raise funding for your operations and projects. The Warren Library in Westbrook has closed, and they operated entirely by endowment funding. Who will be next?