NCPA - National Center for Policy Analysis

When Nonprofits Rely On Government Funds

February 4, 1999

The federal government hands out billions of taxpayers' dollars to nonprofit organizations each year -- which they are free to spend with little public accountability, critics charge.

A new study by Citizens Against Government Waste raises serious questions about the relationship between the federal government and many nonprofits. The report is entitled: "Phony Philanthropy: How Government Grants Are Subverting the Mission of Nonprofits."

  • In 1995 and 1996, 105 groups got grants from the Environmental Protection Agency alone -- with 23 of the groups getting more than half their funding from the EPA.
  • The grants ranged from $1,000 to the African American Development Association in Oakland to $21 million for the American Association of Retired Persons.
  • Other beneficiaries of EPA largess included the American Lung Association, the Consumer Federation of America, the Environmental Defense Fund and the League of Women Voters Education Fund.
  • The National Caucus and Center on Black Aged, the Rural Community Assistance Program and the National Senior Citizens Education and Resource Center each got 99 percent of their funding in 1995 and 1996 from the federal government.

"The sheer volume of grants awarded by the EPA is staggering by itself," the report concluded. "But what is more disturbing is that the process is being repeated every year in other federal agencies...."

"Federal funding is like a drug to these groups. Once their dealer... has gotten them hooked on cash, they'll take any position on any issue to get their fix in the next budget cycle," charges CAGW president Tom Schatz.

Moreover, given their financial dependence on government, it's no wonder so many groups so often ask for more government spending and programs, critics observe.

Source: Perspective, "Phony Philanthropy," Investor's Business Daily, February 4, 1999.


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