Winter 2014 – President’s Note

Philanthropy does not shut down

This is a time of great national conflict. Our political leaders are making fundamental choices about the future of economic growth and job creation, entitlement programs, and the role of government in health care. The American people are deeply divided on many of these issues, and our federal government can sometimes seem dysfunctional, even paralyzed.

But I am happy to report: Philanthropy does not shut down. The amazing generosity of the American people is not paralyzed. Every week Americans voluntarily give away $6 billion to help other people. And when Americans give away our money, we don’t have to seek approval from Harry Reid or Ted Cruz or any other political leader. We can make our charitable decisions ourselves.

Consider three recent donations. The Walton Family Foundation gave a $5 million challenge grant to the Philadelphia School Partnership to support its efforts to create and expand high-performing charter, district, and Catholic schools. The Fisher House Foundation opened its 62nd home enabling the families of wounded servicemembers to live near the military hospitals where their loved ones are being treated. And Bruce and Suzie Kovner gave $60 million to the Juilliard School to provide fellowships for extraordinarily promising classical musicians.

These three donations represent philanthropic freedom at its best. An American citizen, or group of citizens, sees a problem, and steps up to find a solution, without waiting for government to act. Not everyone will agree with the decisions they make. Not everyone would give away his own money in the same way. But that is one of the great strengths of philanthropy. In a free, pluralistic society, different individuals will pursue different charitable objectives.

Tyrants have always understood the connection between freedom and philanthropy. In a fascinating recent book called Iron Curtain: The Crushing of Eastern Europe 1944-1956, Washington Post columnist Anne Applebaum describes the Soviet strategy for seizing totalitarian control of Poland, Czechoslovakia, Hungary, and other Eastern European countries after World War II. The Soviets had four immediate priorities. They created an extensive secret police that used violence against opponents of the regime. They took control of the mass media, which at that time meant radio. They forcibly uprooted ethnic minorities from their homes. And they suppressed or put under Communist leadership almost every independent institution of civil society, including women’s groups, church organizations, and Boy and Girl Scouts.

Other totalitarian regimes, from Nazi Germany to North Korea to the ayatollahs in Iran, have similarly moved swiftly to crush civil society. They see independent private institutions as a threat to their centralized power.

By contrast, independent private institutions have been part of the American character throughout our history. To protect this tradition, The Philanthropy Roundtable and our legislative arm, the Alliance for Charitable Reform, are fighting hard to protect the freedom of donors and foundations to decide where to give away their money. Voluntary charitable giving sustains the independence of private institutions. Freedom of religion, freedom of thought, and freedom of speech and association ultimately depend on the freedom of private charities to raise money from their supporters.

This is also one of the main reasons we are fighting to preserve the charitable deduction. Voluntary donations to charities are one of the principal ways Americans express our responsibilities as citizens of a self-governing republic. The charitable deduction protects the independence of both individual citizens and the charities they support. And by excluding contributions from taxation, it reinforces the traditional American understanding that private donations belong to civil society, not the government.

The strengthening of civil society is especially important at this time of crisis in the welfare state. Federal and state governments now spend more than $900 billion a year on means-tested programs for the poor—such as food stamps, refundable tax credits, housing vouchers, and Medicaid. This safety net has dramatically reduced hunger, homelessness, and other forms of material poverty. Unfortunately, it has also coincided with the collapse of families, the breakdown of the social fabric, and a slowdown in upward mobility. Millions of Americans now feel trapped at the bottom of the economic ladder.

There is not much the government can do to repair social fabric, put families back together, or restore a sense of optimism that the American dream is still open for those who work hard. Philanthropy has the opportunity to lead the way in strengthening families and communities.

Adam Meyerson is president of The Philanthropy Roundtable.