On March 5, 1980, a new organization called Independent Sector held its charter meeting in Washington, D.C. The brainchild of John W. Gardner, former president of the Carnegie Corporation, and, as President Lyndon B. Johnson’s Secretary of Health, Education, and Welfare, one of the architects of the Great Society, the group sought to represent nonprofit organizations on the national scene. From 150 members at its first meeting, Independent Sector has grown to almost 600 today and claims to be “the premier meeting ground for leaders of America’s charitable and philanthropic sector.”
The luncheon speaker at the meeting was Daniel P. Moynihan, then serving his first term in the U.S. Senate after a career spent in studying the relationship between government and the institutions of civil society. Moynihan delivered a deeply alarming message to Independent Sector’s new members: He told them that they were actually threatened—jeopardized—by government. After reminding them of their central role in modern society to stand between the laissez-faire doctrines that have no sense of the common good and totalitarian states that make themselves the sole definers and enforcers of that common good, he warned the nonprofit leaders that “little by little you are being squeezed out of existence or slowly absorbed.”
For example, Moynihan recounted that he and Republican Senator Robert Packwood of Oregon (with whom Moynihan would later craft far-reaching tax reform legislation) were trying to make the charitable deduction available to both itemizers and non-itemizers. Without such a change, you could lose a “fundamental component of American democracy.” But “I’m telling you,” Moynihan said, “there are institutions in this city that desire that you should. . . . They will do everything they can to oppose and destroy” an expansion of the availability of the deduction.
Moynihan foresaw nonprofit institutions becoming increasingly dependent on government funds and increasingly discouraged from seeking private funds. That was a natural consequence of the growing tendency to talk about private charitable contributions as “tax expenditures.” The term began as a matter of accounting but had become, Moynihan said, shorthand for the idea that “you were allowed” to deduct the amount of your contributions to a charitable organization. “Well, if you’re allowed to keep it, then it wasn’t yours in the first place, was it? It belongs to the state.” This was the logic that Moynihan called upon Independent Sector to resist. It was time, he said, “to insist that the federal government not take away your opportunity to exist through private contributions. Else it will surely do so.”
Things did not turn out as Moynihan would have wished. The dependence of nonprofits on government funding has grown. The idea of charitable contributions as tax expenditures has taken deeper root; so has the idea that some charities are more charitable than others and it is up to government to make the necessary distinctions. If we have not yet seen the enactment of federal legislation imposing further limitations on the charitable deduction, it is not because Republicans or Democrats in Congress have raised much in the way of an intellectual challenge to the idea.
Such a challenge should not be so hard to make, by liberal and conservative proponents of the nonprofit sector. Moynihan’s speech provided part of the blueprint—as well as a reminder, especially to those of us who worked with him, of why he is so sorely missed.