Now More Than Ever, Foundations Need to Step Up for Democracy

Even before agreeing on the final details of their tax bill, Republican leaders in Congress have made it clear they hope to address the national debt — the one their bill adds a trillion dollars to over the next ten years — by cutting vital safety net programs. Indeed, the dishonest Republican plan rewards the richest one percent of American taxpayers with over 60 percent of the proposed benefits of tax "reform" while people living in poverty or who depend on Medicare, Medicaid, and other programs will lose ground. Even the elderly and the sick, as well as those whose future well-being is tied to Social Security, are likely to be sacrificed on the altar of "deficit reduction."

What can charities and philanthropy do about it? Apparently nothing, judging from the feckless efforts to protect charitable giving and the integrity of the sector during the recent tax cut battle. It's reported that nonprofit "infrastructure groups" spent over $670,000 on lobbying activities in 2017 (through September) — with little in the way of results to show for it. Additional efforts — and expenditures — by individual charities and nonprofit coalitions likewise failed to derail the regressive policy changes championed by Republicans in Congress.

It doesn't have to be that way. Charities have created little opportunity for themselves to be heard on the tax bill, and it's unlikely their collective voice could affect anything but the proposed repeal of the Johnson Amendment — an action that, if not dropped from the final bill, would turn tax-exempt organizations into partisan political action groups. One hopes, however, that charities — and foundations — will learn from this depressing experience and act to better represent the public interest in the lead up to the 2018 midterm elections — and beyond.

For charities and foundations to succeed in this endeavor, three things need to change: (1) public policy issues must be seen for what they really are; (2) charities and foundations must work to invigorate enlightened grassroots participation in the democratic process; and (3) we, especially funders, need to overcome our arrogance and self-serving timidity and recognize that, regardless of organizational mission, we will not succeed as a sector if we don't also support efforts designed to strengthen civic engagement and democracy.

In other words, if the sector is to remain a vital part of the American fabric, nonprofit and philanthropic organizations must be willing to build "people power" through democratic action.

First, the issues: Although President Trump and Republicans have insisted their tax bill is designed to benefit the middle class, it is clear it mainly benefits their donors and other wealthy individuals and corporations. By the end of the ten-year "reform" period, most taxpayers with incomes under $75,000 would see their taxes increase. And even before the provisions of the bill are scheduled to expire, people who earn their income through wages will pay higher taxes on the same amount of income than those privileged enough to set themselves up as corporations or independent contractors.

Some have called this "class warfare," and Republicans recently seem to have acknowledged as much, with Sen. Chuck Grassley (R-IA), the powerful chairman of the Senate Judiciary Committee, saying that Republicans wanted to reward investors "as opposed to those that are just spending every darn penny they have, whether it's on booze or women or movies." Meanwhile, Rep. Mark Sanford (R-SC) told the Washington Post that "From a truth-in-advertising standpoint, it would have been a lot simpler if we just acknowledged reality on this bill, which is it's fundamentally a corporate tax reduction and restructuring bill."

Led by House Speaker Paul Ryan (R-WI), these same Republicans are using the bigger deficits created by their efforts as a reason to eviscerate programs critical to those who aren't rich. In a testy exchange with Sen. Sherrod Brown (D-OH) recently, Sen. Orrin Hatch (R-UT) claimed that budget cuts favored by Republicans are necessary "because we don't have money anymore." Hatch then admitted that he was having "a rough time wanting to spend billions and billions and trillions of dollars to help people who won't help themselves, won't lift a finger and expect the federal government to do everything."

Let's be clear: the Republican tax plan isn't about helping the middle class or those in poverty; it's a massive transfer of resources into the pockets of the already-rich. And as is also painfully clear, the next big legislative battle will be focused on more of the same — with the battleground shifting to so-called entitlement and other programs that scores of millions of Americans depend on.

Second, if charities hope to be effective in fighting these battles, they must acknowledge that they need political power to affect policy, and that the deck is stacked against them because of the very way in which political power in twenty-first century America is gained and applied — through targeted campaign contributions controlled and directed by lobbyists.

Given the makeup of the Supreme Court, it is unlikely we will see effective campaign finance reform enacted in the foreseeable future. And that means charities' public interest lobbyists will never be on an even playing field with deep-pocketed private and corporate interests. Instead, the only way for charities and the public to win this game is to change the way it is played.

Fortunately, we live in a democracy and — though it may sound anachronistic — democracy does afford ordinary people ways to gain and wield power. It's a lot easier, however, if they are supported in those efforts by charities and foundations.

If already over-burdened charities are to succeed in this work, they will need to be led and guided by nonprofit infrastructure groups and mission-area associations. But such democracy-building leadership seems to be in short supply. Instead of quixotically advocating for a universal charitable deduction, for instance, these groups should have rallied around the broader public interest. And instead of relying on lobbyists and elite-led campaigns to promote the public interest, they need to recommit to the hard work of organizing people to participate in the democratic process.

Nonprofit organizations employ over 11 million people and, on an annual basis, are supported by 63 million volunteers and millions more who donate. And those numbers pale in comparison to the countless number of people and communities directly served by charities.

That is a huge universe of people whose interests and well-being are aligned with and served by charities and nonprofits — and who would seem to be predisposed to becoming more engaged in the democratic process. Well-designed and -funded efforts to help people better understand what's at stake with respect to public policy decisions and what charities and nonprofits are doing to combat threats to the public interest would be a great start in building a powerful army of advocates and an informed and active electorate.

Building, animating, and sustaining such networks of democratically engaged people will require leadership from nonprofit infrastructure groups and nonprofit associations and coalitions, and action by charities themselves. And that takes money.

Which brings me to my final point: Foundations either seem to think they know what public policy ought to be and attempt to influence it directly through concerted grantmaking, or they fear any kind of engagement with policy and will do their best to avoid anything that might run counter to the interests of their own wealthy board members, founding families, and friends.

With the exception of a handful of philanthropies, what seems to be missing from the equation is robust support for democratic institutions and civic engagement — which, as Gary Bass and I discussed previously in these pages, attract well under 2 percent of U.S. foundations' grant dollars.

Former President Obama noted recently that, given its fragility, "We have to tend to this garden of democracy or else things could fall apart quickly….[Y]ou've got to pay attention. And vote."

That's the only route to real power for the sector in the current environment: we simply must do whatever is needed to catalyze broad-based participation in the democratic process and get people to vote.

But we won't succeed in this all-important enterprise without increased foundation support for democratic organizing. Funders are wise enough to know that. A failure to act accordingly is nothing less than an abdication of the very meaning and purpose of philanthropy.

Mark Rosenman is a professor emeritus at the Union Institute & University. To read more of Rosenman's commentary, click here.