NCPA - National Center for Policy Analysis


March 5, 2009

Coupled with the proposed limits of tax deductions on charitable contributions from wealthy Americans and the National Committee for Responsive Philanthropy's (NCRP) recommendation that philanthropic organizations should ignore donor intent and give grants based on political considerations, nonprofits have taken a big hit, says Naomi Schaefer Riley of the Wall Street Journal.

The NCRP is following in the footsteps of other philanthropy groups that have released similar mandates:

  • In 2007, San Francisco's Greenlining began pushing for legislation mandating that foundations report to the public the percentage of their dollars given to "minority-led" organizations and the percentage of their boards and staffs made up by racial and ethnic minorities.
  • The legislation was dropped when several foundations promised to donate money to causes Greenlining favored.
  • Now Greenlining has put out reports in Florida, Pennsylvania and New York trying to shame foundations into distributing grants differently, as well as pressure them into recruiting more "diverse" board and staff members.
  • Earlier this year, the Council on Foundations, an umbrella organization for philanthropies, released a study called "Diversity and Inclusion: Lessons from the Field," in which the leaders of several foundations touted new steps they were taking to "embed diversity and inclusive practices" into their organizations.

Does this have anything to do with effective giving, ask Riley?  No, not really.   Looking at the recipients of grants doesn't tell you anything about who the real beneficiaries are.   Which brings us to another one of NCRP's recommendations -- that at least 25 percent of grant dollars be used for "advocacy, organizing and civic engagement to promote equity, opportunity and justice in our society."

Philanthropists give money to foundations with a particular cause in mind.  And promoting "justice in our society" may not have anything to do with it.  Indeed, foundations that redirect funding to match the NCRP criteria may have to violate donor intent in order to do so.   The best way for a donor to make sure that his money is given for the purposes is to choose board members that agree with him, explains Riley.

Source: Naomi Schaefer Riley, "Philanthropy and Its Enemies," Wall Street Journal, March 3, 2009.

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