The Heritage Foundation

Institutional Analysis #8

August 19, 1978

August 19, 1978 | Institutional Analysis on

National Committee for Responsive Philanthropy

(Archived document, may contain errors)

8

August, 1978

NATIONAL COMMITTEE FOR RESPONSIVE PHILANTHROPY

INTRODUCTION

The National Committee for Responsive Philanthropy is the lineal descendant of the self-named "Donee Group," which formed in late 1974 and 1975 to provide ad-hoc consultation to the Commission on Private Philanthropy and Public Needs, initiated in 1973 by John D. Rockefeller, III and usually known as the Filer Commission, after its chairman, John H. Filer, Chairman of Aetna Casualty. '

The Filer Commission had the encouragement also of Wilbur Mills, then chairman of the House Ways and'Means Committee, Secretary of the Treasury George P. Shultz, and William E. Simon, later Secre- tary of the Treasury. It was privately initiated and privately funded and had two broad objectives:

To study the role of both philanthropic giving in the United States and that area through which giving is princi- pally channeled, the voluntary, "third" sector of American society.

To make recommendations to the voluntary sector, to Congress and to the American public at large concerning ways in which the sector and the practice of1private giving can be strengthened and made more effective.

1. Giving In America: Toward a Stronger Voluntary Sector (Report of the Commission on Private Philanthropy and Public Needs, 1975).

The Filer Commission represented a fairly moderate or moderate- to-liberal cross-section of successful persons in business, institu- tional religion, education, and politics. For instance, it included among its 26 members (besides John Filer): Lester Crown, President of Material Service Corporation and C. Douglas Dillon; Alan Piper of the Carnegie Corporation and George Romney; Most Rev. Raymond J. Gallagher, Bishop of Lafayette (Indiana) and Rev. Leon Sullivan, Baptist Pastor from Philadelphia; Edwin Etherington, former President of Wesleyan University and David Truman, President of Mount Holyoke College; Frances "Sissy" Farenthold of Houston, past Chairperson of the National Women's Political Caucus and Graciela Olivarez, New Mexico State Planning Officer and a Director of the umbrella Council on Foundations.

Within roughly a year of the Filer Commission's formation, in late 1974, "a group of public interest and social change organizations" became concerned that the Commission was stressing the problems of only the donors and neglecting the would-be donees' concerns. A crit- ical article in the January 1975 issue of The Grantsmanship Center NEWS declared that the Commission disproportionately reflected the "esta- blishment" side. After some joint meetings, in the spring of 1975 the Commission approved a proposal by these social change organiza- tions, by then called the Donee Group, that they "provide additional research and consultation" to it.

The Donee Group monograph, Private Philanthropy: Vital & Innova- tive? or Passive & Irrelevant?2, which is subtitled The Donee Group Report & Recommendations, describes it as a coalition "composed of voluntary action, environmental action, public interest law, housing, women's rights, community organizing, service to the handicapped, children's rights, social service, consumer rights and citizen parti- cipation activities...." In terms of institutional continuity, the Donee Group is to the National Committee for Responsive Philanthropy what the adolescent is to the young man.

That the Donee Group/NCRP has a specific philosophical focus is apparent from both its policy statements and the identities and organizational associations of its members, who in the period 1975-76 included: Msgr. Geno Baroni, then President of the National Center for Urban Ethnic Affairs (now with H.U.D.); Pablo Eisenberg, President of the Center for Community Change; Charles Halpern, Executive Director, Council for Public Interest Law; Norton J. Kiritz, President of Grantsmanship Center; Maggie Kuhn, National Convener, the Gray Panthers; Margery Tabankin, Executive Director, the Youth Project; Mary Jean Tully, President, NOW legal Defense and Education Fund; and Raul Yzaguirre, Executive Director, National Council of La Raza. By and large, these organizations stand at the radical end of the political spectrum; and in light of numerous policy statements to be analyzed below, it is clear that these individuals strongly subscribe to a thorough

2. Private Philanthropy: Vital & Innovative? or Passive & Irrelevant? The Donee Group Report & Recommendation. This is a 43-page lithographed reprint, undated. The writer obtained a copy in August 1976.

redistributionist economic theory and anti-corporation psychology, redolent in analysis (though with somewhat muted rhetoric) of the S.D.S. social commentary of the 1960's, which condemned the "Establishment" and sought "empowerment" for "helpless minorities outside the system" through "creating new structures" and fostering "radical social change."

Though apparently the "establishment" members of the Filer Commission gave the Donee Group an extended and respectful hearing, it did not substantially adopt the Group's practical recommendations, which, as will be seen, amount to a total upheaval in the patterns and control of traditional philanthropic giving. Indeed, the Donee Group observed:

"To a large extent we failed at our effort" to persuade the Filer Commission to open the question of what are the real public needs and what roles should Government and philanthropy have meeting them. "We succeeded in moving the Commission to accept our point of view in some areas. But now that the Commission has completed its work ... we must call attention to our differences both on the basic policy issues and on the recommendations which flow from them."

Upon the discontinuance of the Filer Commission the Donee Group decided to incorporate, with a slightly wider membership, and seek 501(c)(3) status. Because of its scarcely-contained inclination to seek to influence legislation, it appears that, as of December, 1976, the newly formed National Committee for Responsive Philanthropy, as the Donee Group called itself, had been assured of 501(c)(4) status, but at that time the outlook on (c)(3) status was uncertain. Sub- sequently it appears that (c)(3) status was granted. The distinction is significant both because early inability to obtain (c)(3) status was a technical point that prevented NCRP, it seems, from receiving a $100,000 grant from the Campaign for Human Development and because of the ironic fact that the NCRP's thrust is, in part, to do away with tax-deductibility of charitable contributions (to replace it with a small tax credit) and to urge that government undertake the major role in funding traditional charities--schools, colleges, orphanages, hospitals, etc.--so that foundations can focus on supporting "the cutting edge of social change" as exemplified in the membership of such public-interest activists as the National Committee.

The thrust of the NCRP will be more clearly apparent through comparing its recommendations with those of the Filer Commission.

COMMISSION ON PRIVATE PHILANTHROPY AND PUBLIC NEEDS (FILER COMMISSION) REPORT AND RECOMMENDATIONS

The basic thrust of the Filer Commission is to expand and strengthen the private philanthropic sector, though in some instances its specific recommendations run counter to this goal by expanding the power of the federal Government without any clear benefit to be gained or assurance that the suggested limited expansion may not become too great. Some of the typical recommendations are as follows:

To broaden the base of philanthropy, recommend That to increase inducements for charitable giving, all taxpayers who take the standard deduction should also be permitted to deduct charitable contributions as an additional, itemized deduction.

That an additional inducement to charitable giving should be provided to low- and middle-income taxpayer's ...'a "double deduction" be instituted for families with incomes of less than $15,000 a year... /and/ for those families with incomes between $15,000 aHd 1@30,000, the Commission proposes a deduction of 150 per cent of their giving...

To encourage expanded corporate giving, recommend That corporations set as a minimum goal, to be reached no later than 1980, the giving to charitable purposes of 2 per cent of pre-tax net income.

To encourage greater public accountability

That all larger tax exempt charitable organizations except churches ... be required to make ... detailed annual reports on their finances, programs and priorities.

That larger grant-making organizations be required to hold annual public meetings to discuss their programs priorities and contributions.

That the Internal Revenue Service continue to be the principalagency responsible for the oversight of tax- exempt organizations.

It should be noted that here and in the other recommendations summarized some are omitted from this discussion simply for lack of space. Also, not all of these were the unanimous position of the Filer Commission; certainly in many cases the rationale of the majority on a point was contested by an often-changing minority, and the report contains 25 pages of "comments and dissents."

Some recommendations gain significance in the context of the Donee Group's position; the point about I.R.S. immediately above,

3. Giving In America, page 135 ff.

for instance, is an instance of the Filer Commission's resisting the Donee Group argument, here, that a new governmental agency should be set up to monitor foundations.

To encourage greater accessibility to funding opportunities, especially by new organizations, the Commission recommends, inter alia:

That tax-exempt organizations ... recognize an obligation to be responsive to changing viewpoints and emerging needs and that they take steps such as broadening their boards and staffs to insure that they are responsive.

That a new category of "independent" foundation be estab- lished by law. Such organizations would enjoy the tax benefits of public charities in return for diminished influence on the foundation's board by the foundation's benefactor or by his or her family or business associates.4

These reflect Donee Group influence, though in attenuated form. Finally, the Commission makes some recommendations designed to minimize the chances of institutional self-dealing, urges "a system of federal regulation for interstate charitable solicitations and that intrastate solicitations be more effectively regulated by state governments," and urges that nonprofit organizations other than foundations be allowed to lobby without losing eligibility to receive tax-deductible gifts.

The Filer Commission closes by recommending "That a permanent national commission on the nonprofit sector be established by Congress," another goal of the Donee Group, at least in principle.

DONEE GROUP/NCRP VIEWPOINT

The significance of the National Committee for Responsive Philanthropy and the possible impact it could have on traditional private charity in this country may be seen from the essentially radical perspective it brings to its self-appointed task. Early in the Donee Group teport, which summarizes the salient points it urged upon the Filer Commission, these revealing comments appear:

"We view the issues of private philanthropy and public needs in the context of a society in which power and resources are grossly misallocated. Ours is a society in which racial, ethnic, sexual and other forms of discrimination deny many the political, economic and social advantages enjoyed by other Americans. It is also a society in which misallocations of power and discriminating patterns have created wide-spread distrust..." and where, to remedy these

4.- Ibid., p.169 ff.

evils, philanthropy must "live up to the ideal of an innovative fearless agent of social change."5

Examples of such social change agency and advocacy for the needy are given immediately: support for the National Welfare Rights Organi- zation, the Mexican American Legal Defense and Educational Fund, the Southern Regional Council Voter Education Project. In other commentary the Donee Group criticizes private philanthropy for having "failed to have substantial impact on the most pressing issues of the day," such as "nuclear proliferation, the energy crisis, inflation, world hunger, women's rights."

Elsewhere the Donee Group report asserts that the Filer Commission has "given inadequate consideration" to "important groups and issues," such as those "advocating minority and women's rights" and those groups "engaged in overseeing, monitoring and evaluating government and other institutions of the society," such as "public interest law, consumer and environmental organizations ... " other complaints include the Commission's alleged failure to urge "greater access, accountability, and changes in the qovernance of private nonprofit organizations" and its concern "to -protect established institutions of higher education, health, welfare and the arts." (Emphasis added.)

For the future, the.NCRP would like to see government support charitable functions, not the diversified private sector. Philanthropy's task is not, in its view, helping maintain private institutions such as schools and hospitals; rather, "a critical role for philanthropy is support of organizations monitoring, overseeing or seeking changes in government, industry and other established institutions." The essential role of a private philanthropy, they say, is to challenge and c_rit@icize conventional institutions, and to help build new institutions for deprived communities. Finally, "We do not believe that philanthropy should have as its primary purpose the support of private institutions performing essential public services that are being delivered by business or government.,,6

DONEE GROUP/NCRP RECOMMENDATIONS FOR RADICAL CHANGE IN THE LAWS GOVERNING PRIVATE PHILANTHROPY

In ess-ence.their purpose is to change the laws so that "the public," in large part through the federal government or through surrogates, obtains de facto control of virtually all foundations. Specifically, the saFlent recommendations include:

5. The Donee Group Report, supra note 2, page 7.

6. Ibid., p. 9.

A. ... phase out donor control over charitable organizations." "The governing boards of all foundations Would be required by law to have no less than one third public members im@ mediately and no less tRan -two thirds public members after five years."

B. "...organized philanthropies with broad purposes (should) be required by law to expand their govWrning boards to in- clude significant representation from the general public ... and ... in particular, women and minorTt-i-es."

C."The law should require all foundations but the smallest to publish annually their program areas, criteria for de- cisions, amounts available and list of recipients and purposes; also to provide applicants with specific explan- ations for rejections of grant requests ... a statement of the organizations's efforts to evaluate its pro-grams in liqht of chan@ing pubTic 'Reeds; a statement of the meEh-ods used to recruit new members of the governing board and new staff; a list of staff, consultants and board members with their salaries and fees; and a statement of efforts to work with other grantors to avoid auplication and to seek out worthy projects for funding '

D. The law should "require annual public meetings of the governing boards of grantors (of all Sut -small foundations to) include a program assessment; a preview of future priorities; a review of staff and boaril member selection; a review of major grants, a forum for the public to state grievances and such other matters as members of the publiEc may wish to raise. Appropriate notice to the public and affected constituencies should be required."(In all cases above, italics in original.)/

one may note the likely results of these proposals: (1) two-thirds "public" members puts total control in the hands of self-defined "representatives of the public" or "public-interest" persons; (2) the numerous reports and justificatory statements provide a basis for publicity or legal attacks by critics; (3) public meetings of the governing boards will subject directors, usually civic leaders who serve without pay, to likely harassment by the press and disaffected applicants; (4) such a system encourages tactics akin to those of complaining minority shareholders at annual stockholders' meetings; (5) such a system gives the would-be donee considerable leverage un- related to the merits of his proposal, to a large degree enabling him to act as judge of his own cause, displacing the donor's independent judgement.

7. Ibid., pp. 17-23.

One long-range goal of the National Committee for Responsive Philanthropy is to abolish tax-deductibility for charitable contri- butions. The purpose is to get rid of "the tax incentives for chari- table giving" by the well-to-do and to provide some modest incentives for poor people. This is called "redefining the donor community." While they envision an interim period having both the present deduct- ibility and their recommended charitable tax-credit for low-income people, "after five years a decision can be made as to whether the charitable deduction should be eliminated

It is clear they have already decided, since they state that the present system "does not go far enough towards democratizing chari- table giving," and that it contains a "great inequity" in that it "reverses the progressivity of the income tax." They also urge, in italics, "that there should be a substantial minimum tax to prevent higher income individuals from avoiding taxation through use of deductions

Another goal is to force corporations to contribute more to charities. Their method: a 2 percefif tax added to the corporate tax, which could be "offset wholly or in part through gifts of cash to charity which were made through a private foundation, a majority of whose members were not corporate officers, board members, employees or otherwise under corporate control and which was subject to (their recommended) disclosure and reporting requirements

Finally, to enforce these recommendations and to ensure that "the public" as represented in the federal government have an active role in directing foundations, the NCRP has two further proposals

.** removal of all ruling and audit functions regarding exempt organizations from I.R.S. and creation of a new in- dependent regulatory commission with a Presidentially ap- pointed board reflecting all elements of private philan- thropy, including donees..

This new government agency is to have "regional offices and in- stitutionalized citizen feedback and participation mechanisms," and is to "be empowered to engage in the 'overview, analysis, and advance- ment' of philanthropic functions..." which include "advocacy goals." But such a new agency will not be successful unless Congress is given specific oversight responsibilities, it is said; thus, it urges

a permanent, staffed, standing committee or sub- committee in the House and Senate having oversight responsibility over any permanent regulatory agency and power to review any legislation affecting the nonprofit sector.

There are other proposals, such as increasing the required foun- dation payout rate to 6 percent of market value of assets; removing limitations on lobbying; and requiring donee organizations to submit \u239\'95 public financial audit and program evaluation. All in all, it means \u239\'95 massive involvement of "the public" and/or the government in the affairs of private organizations.

GENERAL SUMMARY OF NATIONAL COMMITTEE FOR RESPONSIVE PHILANTHROPY ACTIVITIES

In April, 1977, the National Committee, now headquartered at 1028 Connecticut Avenue, N.W., Suite 822, Washington D.C. 20036, published a 31-page monograph, "Why Is The NCRP Needed?" After making its case that foundations, United Ways, corporate giving programs and the remaining philanthropies do not do a good job meeting the "criti- cal, collective, public needs of our times," the monograph describes "the strategies NCRP intends to employ to achieve its goals," as an organization with "a broader membership and constituency than the Donee Group":

A. "...work closely with more than 3,000 local and state groups in every state ... pursuing charitable and educa- tional activities ... (for such causes as) neighborhood revitalization, civil rights, equal employment opportuni- ties, enVironmental protection ... low-income families, older people, youth, women, environmentalists, and racial/ ethnic minorities."

B. "... a campaign to assist local activists to study local philanthropy and to initiate reform actions, 'legal action, research at local and national levels, national and re- gional conferences, publicity generation, testimony on pro- posed government regulations affecting phil-anthropy, analysis of proposed government policies, and continued interaction with philanthropic leaders." (Emphasis added.)

C. "... take initiatives in the philanthropic and public print media and before government officials to stake out (NCRP's) facts and viewpoints regarding the need for re- form of private philanthropy. As McGeorge Bundy once said ... he who writes the initial memo setting forth the issues and their parameters, is he who gets other (sic) to react within his frame of reference. We will take the initiative ... to have some influence in getting private philanthropic interests firstly, to respond and secondly, to respond within our suggested frame of reference. This will give NCRP some leverage within the philanthropic world."

The aggressive inventiveness displayed by NCRP in pursuing these ends may be seen from a perusal of its first Newsletter (February 28, 1978), which summarizes the highlights of its -first full year (1977) in operation:

1. NCRP has helped groups in Denver, San Francisco, Seattle, Chicago, and Arizona do local evaluations of the pattern of philanthropic giving in their regions.

2. Pressed an unnamed Chicago foundation into giving $475,000 to various community groups which had expected to be cut off under revised foundation guidelines.

At the request of the prestigious umbrella group, the Council on Foundations, provided the Council with a written "evaluation" of the Council's 1977 Annual Conference and at NCRP's October 1977 Board meeting briefed David Freeman, then President of the Council, on the evaluation, which urged greater donee involvement at such future conferences.

4. Consulted with Treasury Department officials twice in late 1976 urging stronger rules requiring non-profit organ- izations to make public report on their "finances, programs and priorities" as well as requiring corporations to make public information on their charitable giving programs.

5. At a national conference in New York, November 1977, challenged the Better Business Bureau and the National Information Bureau to develop more flexible standards of rating non-profit groups to permit fledgling and controver- sial organizations to qualify for an "approved" rating.

6. Testified in December 1976 before IRS in favor of proposed IRS regulations giving more authority and power to the governing bodies of community foundations.

7. Filed an amicus curiae brief in July 1977 in support of the National Black United Fund's lawsuit against the Federal Civil Service Commission, specifically challenging the CSC's delegation of authority to local United Ways, to decide which local welfare organizations may participate in the government's charities drive.

8. Led by Pablo Eisenberg, President of NCRP, NCRP members worked successfully with Walter McNerny, President of Blue Cross Association; Landrum Bolling, then President of Lilly Endowment and now Chairman of the Council on Foundations; David Rogers, President of the Robert Wood Johnson Foundation; David Cohen of Common Cause, and others, to persuade members of the Carter Administration that Treasury Secretary Blumenthal was unwise to disband the Treasury Department Advisory Com- mittee on Private Philanthropy, and managed to have the Committee reconstituted.

9. Testified on behalf of H.R. 41, which would require public disclosure of fund-raising and administrative costs of nonprofit groups soliciting charitable contributions by mail.

10. Claims credit for helping influence the Treasury Department to drop its proposals to modify (if not remove) the charitable deduction and urged upon the Treasury the new tax credit for a time, until the charitable deduction could later be phased out.

11. Prepared a "major presentation" for the March 1978 annual convention of the National Society of Fund Raisers in Los Angeles, titled "United Way does NOT work for ALL of Us!" to be given by NCRP Executive Director Robert 0. Bothwell; the first page of the paper states, "The presentation was cancelled by NSFR a few weeks beforehand because United Way officials objected to it."

THE NATIONAL COMMITTEE FOR RESPONSIVE PHILANTHROPY AND THE CAMPAIGN FOR HUMAN DEVELOPMENT (CHO).

The Campaign for Human Development is a multi-faceted umbrella charity conducted by the Catholic Church and supported by numerous voluntary contributions from its communicants, who are solicited through episcopal appeals on a given Sunday each year. The CHD has offices at the United States Catholic Conference headquarters in Washington, D.C., where it appears that a staff of persons active in social and welfare organizations reviews proposals from the field, many presumably not under Church auspices, for financial support. (The writer does not have first hand information on the grant-making process. It appears the staff recommends contributions to various agencies to a small committee of Bishops, who normally approve staff decisions.)

In 1976 the National Committee for Responsive Philanthropy applied to the Campaign for Human Development for a $100,000 grant. There was staff approval. At this time NCRP did not have 501(c)(3) status and, at least on that basis, the tentative approval did not move to final approval.

The application for a $100,000 grant is interesting for at least two reasons. First, this amount makes up more than one-half the first full year's NCRP budget, and if given would be an immense windfall for such a nascent organization. Second, the composition of the NCRP and its parent, the Donee Group is peculiar from a church point of view: of the many "social change" and "poverty" organizations this "coalition" organization represents, it seems that not one is church-related or religiously-motivated.

That such a large grant might be seriously entertained by CHD is also interesting in light of the fact that religious charities are not deemed by NCRP to be the proper donees of philanthropic largesse, not being "on the cutting edge of social change" and the fact that the end results of NCRP's efforts, if successful, would be removing tax-deductibility from contributions, requiring mountainous public reports of charitable solicitation efforts by charitable groups, putting "public" members on the governing Boards of most foundations, thus directing their support to political/social causes, and deeply involving the government in the affairs of private donor and (some) donee groups--all actions which necessarily must harm the financial support and flexibility of church-related social-welfare organizations.

NCRP stressed a different focus: using the grant to develop its staff to work with large national foundations and philanthropies in an attempt to motivate them to fund more projects for disadvantaged members of society. A CHD spokesman said in December 1976 that CHD funds more of such projects than do All the private foundations in this country combined; doubtless NCRP-proposed efforts to affect these giving patterns helped motivate the staff decision. In any event, Bishop Raymond Gallagher (formerly of Filer Commission) and the Catholic Conference General Counsel opposed the grant, and as of mid-1977 the idea seemed in limbo.

NCRP AND THE GRANTSMANSHIP CENTER NEWS

The Grantsmanship Center, 1015 West Olympic-Blvd., Los Angeles, California 90015, according to a statement in its magazine, the NEWS, is a nonprofit, tax-exempt educational institution. The Center is committed to enhancing the quality of human service pro- grams by improving the pldnning and management skills of private nonprofit and public agencies. The Center's activities include grantsmanship training programs, service to alumni and support of an alumni network, and publications including the NEWS.8

The Board of Directors as of spring, 1977, included, among others: Norton J. Kiritz, President; Fred Y.Hoshiyama, Chairman (Director of Special Services, National Board of YMCA); Brownless Haydon (Western Regional Director of Development, Univ. of Chicago); David Cohen (President, Common Cause); Pablo Eisenberg (President, Center for Community Change); Patrick W. Kennedy (Editor, Foundation News, the basic publication of the "establishment" Council on Foundations, 888 Seventh Avenue, New York); E. Grace Payne (Execu- tive Director, Westminister Neighborhood Ass'n, Los Angeles); Ernest Shell (Vice Chairman, Golden State Mutual Life Ins. Co.); and Raul Yzaguirre (National Director, Council of La Raza). Some of these persons are involved with the National Committee for Responsive Philanthropy.

The Grantsmanship Center runs very numerous "grantsmanship training programs." These normally run five days and take place in virtually every major city in the country. For instance, in the per- iod June - December 1977, the Center sponsored roughly 70 programs, in cities both large (Chicago, Los Angeles, New York, etc.) and small (Honolulu; Lowell, Massachusetts; Hampton, Virginia; Harrisburg, etc.). The programs typically cover in highlight form practically everything one needs to know about the technique of wresting grants from founda- tions, corporations, or government; taught by successful grantsmen, the typical tuition is $295.00 to $325.00, and as of January 1978 "More than 4,000 people have participated in the Center's training."

The Grantsmansh12 Center NEWS (Issue 20, April-June 1977), inside front cover.

The Grantsmanship Center NEWS is published six times per year by the Center. Its format is excellent and its articles pithy and clever. The layout reminds one of a cross between Time and National Lampoon, and in a usual 70-90 pages one finds such @i_rticles as "The Complete Undercover Guide to Researching Foundations"; "Pulling Funds Up by the Grass Roots"; "Tax Breaks for the Good Guys"; "Grants Help Realize a Vision of Reviving a Small Town"; "How to Affect Legislation"; "Lobby Rules for Nonprofits Eased"; and "Ms. Foundation Funds Feminism." The whimsical cartoons and cute headings disguise a very serious purpose: telling the story of how to get a piece of the pie. The editorial position is not blatant but does echo to some extent the liberal-to-radical counter-culture motif of the NCRP. However, now and then the NEWS takes off the gloves; for example, in the fall of 1977 it thundered editorially that more federal regulation is needed over family foundations, bolstering this thesis with an attack on Nelson Rockefeller's alleged browbeating the other trustees of the Rockefeller Brothers Fund into giving millions to his pet art and museum charities, to the detriment of Donee-Group-type recipients who had grown to expect Rockefeller largesse.

NCRP AND THE UNITED WAY

One of the National Committee's prime targets is the United Way. In keeping with its thesis that the "Establishment" is an improper custodian of the nation's institutionalized surplus wealth and that - the donors exercise too much--because they have some--control over the dispersal of family foundation grants, the NCRP is highly criti- cal of the fact that corporate and civic leaders largely dominate the United Way federate-charities campaigns in each city.

Thus NCRP distributes a research paper for the Filer Commission by Boston College sociologist David Horton Smith, "The Role of the United Way in Philanthropy," wherein the criticisms are made, among others, that United Ways are first and foremost a politicized type of organization. They are highly visible in the com- munity, and their control is of interest to the local community power structure. (They)closely reflect the prevailing power structure of their larger environ- ment, both locally and nationally. (Emphasis in original.) Moreover, Smith goes on to say, "...the executives of medium and large businesses have tremendous power, collectively, over the success or failure of United Way fund raising all over the country."

The point is more than just the philosophical one of resentment that those whose companies produce the wealth should have some in- fluence over the distribution of some of it. The point is the practi- cal one that Donee-Group-type organizations have only rarely been in- cluded in United Way contributions of funds collected. Smith says it rather blandly: "It is also true that many kinds of organizations active in the public interest receive little or no support from United Ways." (Emphasis added.) In hiS prepared remarks for the National Society of Fund Raisers (See page 11, item 11, supra) NCRP Executive Director Robert 0. Bothwell attacked the fact tHa-tUnited Ways' "Static funding patterns ... mean that little or no monibs become available for allocation to potential new members," thus depriving new health and social service organizations "still outside the United Way circle and ... new, leading-edge organizations, now being formed more rapidly than e:@7e_r i-n-t-He nation's history."(Emphasis added.)

To attack what is seen as United Way "monopolistic activities," NCRP uses publicity,9 the developing of'ad-hoc grassroots organizations, and speaks favorably of the possibility of lawsuits. Indeed, the NCRP Washington office distributes copies of a Stipulation and Agreement for Judgment in a recent California Los Angeles Superior Court case, Associated In-Group Donors, and La Canada Youth Council v. United Way, J. Robert Fluor, Leonard Firestone, Frank McNamara, Paul Miller, & Evelle Younger.

NCRP's goal is to require payroll deduction from corporate em- ployees of contributions to any 501(c)(3) entity, save perhaps religious groups; to require that corporate leadership be separated from United Way involvement; and gradually, as with individual foundations, to persuade United Ways to add to their staffs significant numbers of social- change activists.

NCRP FINANCES

In May of 1976, in a "Proposal for Grant Support," NCRP stated that its "budget calls for a minimum of $175,000 for the first year." It later stated that interim funds have come from the following sources:

John D. Rockefeller Aetna Life and Casualty Corp.(John Filer) Cummins Engine Foundation Phelps-Stokes Fund The John Hay Whitney Foundation

9. A typical article which NCRP reprints and distributes is: C.W. Hartman & Lynn Thomas, "Sweet Charity Gone Sour: San Francisco's United Fund," Society magazine (Nov-Dec 1974),P. 54, which highlights such statements as: "United Appeal is a very well-thought-out scheme to avoid corporate taxes. It is a tax dodge, pure and simple." A contrary attack on corporations is argued in the same article. The case is made that "Those least responsive to United Fund appeals are those with the most to give--the corporations themselves." (Page 55) one would think that corporations eager to "dodge" taxes would give more, and that if they do not give more they do not participate in any "well-thought-out scheme to avoid corporate taxes." Apparently corporations are damned if they do give and damned if they do not give.

The article also argues (bold print, boxed): "A charity monopoly exists, serving only those functions agreeable to the community's self-appointed guardians." (Page 57.)

A publication dated May 8, 1978, stated additional "major non-member" contributors: Carnegie Corporation of New York Council on Foundations (contract evaluation) Cummins Engine Foundation Elan Foundation Field Foundation Joyce and John Gutfreund Foundation Edward W. Hazen Foundation Laras Fund Ms. Foundation for Women, Inc. Minneapolis Foundation Charles Steward Mott Foundation Mr. Stewart R. Mott New World Foundation New York Foundation North Shore Unitarian Society-Veatch Program Piton Foundation Rosenberg Foundation

In 1976 NCRP's total revenue received was $69,980; in 1977 the total had doubled to $138,436, of which $134,890 came from grants, and $2,000 from the Council on Foundations for evaluation of its 1977 conference.

On February 8, 1978, the National Committee produced a "projected budget" for 1978, which included $92,800 for personnel, being a staff of six (Executive Director, two "local involvement coordinators," a writer, a researcher, and an administrative assistant); $5,000 for specialized consultants; and over $60,000 for such matters as contract studies of local and national philanthropy, travel, publications, and conferences. The usual office expenses make up roughly $30,000 more of the budget. Comparing the projected budget with projected income, the May 8 statement noted that $20,000 had been received in additional grants and $8,500 in new grant pledges, which when combined with end- of-year balance from 1977 gave a "hard monies" subtotal of $89,973 actually available. The statement then projects further contributions and membership dues at $6,000; possible refundings at $35,000, giving a subtotal of projected income at $130,973; and, consequently, a balance needed of $68,327. Though these are relatively small amounts, the NCRP has already tapped some very wealthy sources and probably obtains considerable in-kind services from individual activists and its contacts in the academic world.

CONCLUSION

Though a small and new organization, the National Committee for Responsive Philanthropy has been quite successful. It has been daring enough to achieve acceptance by the Filer Commission, the Council on Foundations, and some old-line "establishment" foundations--this despite its hostility to conventional patterns of giving, wealthy people as a class, corporations, and persons concerned about the size and power of the federal government.

The NCRP is a "coalition" organization and its leaders are very much aware that what their budget lacks can be made up, in large part, by tapping the resources of the groups its board members represent. Thus, its grant proposal states, "NCRP will also utilize the information arms of its constituent organizations..." and will develop print and visual media "both through national contacts and those of local con- stituencies." Under the heading, "Community and coalition organizing. advocacy," the proposal states:

'..the central thrust of NCRP will be to build and sus- tain an action-oriented, advocacy coalition for change respon- sive to minority, low income and social change interests, at the national, regional and local levels. NCRP intends in part to be a public pressure group that will be heard and have impact because of its size, representativeness, the intensity of its concerns, and the effectiveness of its board and staff.

Under the heading, "Strategies around the perceived issues, "the pro- posal states that steps are being taken on at once some immediate problems.

These include attempts to influence the agenda and thinking of various philanthropic forums; to sensitize many in the philanthropic community to NCRP and its thrust; to work for the broadening of the federal lobbying provisions for non-profit groups to enable philanthropic givers to fund 11controverial" (sic) groups without fear of federal retribution; to develop a monitoring plan to gather data on key foundations; to formulate or refine public policy recommendations to reform philanthropy; and to publish articles in newsletters and journ- als ......

It should be clear that the Donee Group/NCRP are "activists" who are "working within the System" for a thorough-going change in the practices of--and rules governing--private philanthropy in America. On the one hand, they have seized issues with a broad rhetorical appeal-- e.g., "full disclosure" (in this case, of United Way giving patterns and of decision-making processes in large foundations). On the other hand, they go considerably beyond "reform" to the level of abolition of much of the conventional system--e.g., in their efforts to persuade Congress to "phase out" tax deductibility for charitable contributions and replace it with a $100 tax-credit, available almost exclusively to middle-and low-income people.

Their political philosophy is certainly out of the mainstream of American thinking about the proper role of private groups and non- governmental charity; e.g., NCRP insists that the proper role for private charity is to be "on the cutting edge of social change" and to monitor and "goad" the established process," while, however, helping only minorities, the poor, and other disadvantaged groups. Still, they have managed to gain entry and to some degree respectful hearing from the leaders of conventional charity whose social conscience they condemn.

Despite NCRP's extensive research in the field of philanthropy, its literature is virtually devoid of any sympathetic mention of such groups as churches and their charities, private elementary and secondary schools, and state-supported and independent colleges All of these rely very heavily on the present system of philanthropy and on the incentive of tax-deductibility that often motivates sizeable grants from individuals. Ironically, all of these are deeply involved in providing educational and social services to the poor. Should NCRP's legislative proposals someday become law, the negative impact on such entities would be devastating, creating a void in aid for the poor that government could or would not fill.

From these observations some inferences may be drawn. The NCRP should be taken seriously as an agent of radical change, in coming years, in philanthropic practices and possibly in the laws governing foundations and charitable contributions. The success of NCRP to date suggests both (a) that there are some real inequities in the system and (b) that those who support it-- in Congress, in corporations, in foundations themselves--have not deeply reflected on the rationale for a truly decentralized, voluntary, private charity system in America, and thus give uncritical ear to those who urge a quasi-governmental system dominated by an elite who "truly" perceive "the public interest."

Since "philanthropy" has no natural constituency of supporters, as do labor unions and businessmen, and since the public scarcely realizes the good foundations do, it is likely that a scandal or abuse might move a regulatory-minded Congress to consider many of the NCRP proposals. If and when this occurs, NCRP will be ready.

William A. Stanmeyer, Esq. Associate Professor of Law, Indiana University School of Law; President, Lincoln Center for Legal Studies

About the Author