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Wednesday, September 23, 2009

If You Really Love Volunteers, Mr. Obama . . .

Barack Obama gave volunteerism a big boost early this year, visiting service centers on Martin Luther King Day, greeting volunteers, and working alongside them. “Everybody’s got to be involved,” he said. “If we’re waiting for somebody else to do something, it never gets done. We’re going to have to take responsibility, all of us.”

These are wonderful sentiments, of course. Everyone agrees that a healthy America needs citizens who play a direct role in helping in their communities. However, when we look closely at what it takes to promote citizen involvement, we discover that politicians are straddling a divide. With one hand they wave volunteers on, urging them off their couches, out of their homes, and into community self-help projects.   Yet with the other, with the lawmaking hand, they make the prospects for volunteering ever more difficult and daunting.

I was reminded of this paradox the other morning when a shocking e-mail message popped up on my screen. It was from Teresa, the president of a volunteer group we had just started to provide after-school activities for teenagers.

The subject line was, “Liability Issues and Board Function,” her way of alluding to the many legal threats and challenges that loomed over our small-town charity. Teresa wrote that she was resigning, effective immediately.

The message was shocking because Teresa was the heart and soul of the teen center. She had felt drawn to these youngsters with their stringy hair and too-long jeans, seeing them at loose ends after school, so ready to drift into drugs, alcohol abuse, and crime, and felt impelled to do something. Her tireless recruiting brought in board members and other volunteers, and her eager telephoning brought us our first donations. Since the center opened last month, she has worked there almost every day, greeting the youngsters, playing ping-pong with them, and leading the prayer at snack time.

Though Teresa’s message was shocking, it was not surprising. A volunteer who tries to set up a human-services organization in this country quickly discovers she is entering a jungle of government regulation. This jungle is expensive to negotiate, requiring the assistance of lawyers, tax accountants, insurance agents, and risk assessors, and requires vast amounts of paperwork. Large nonprofits have bureaucracies to stay on top of, and defend against, the demands of government officials, but idealistic newcomers have no such protection. They stand alone and unprotected in this jungle, fearful that a legal misstep could, in an extreme case, deprive them of their property or land them in jail. This was how Teresa saw it in explaining her decision to resign. “I can’t jeopardize our home,” she told me.

We got our first taste of regulation when we tried to open a bank account. Because of new regulations from Homeland Security, we were required to get an EIN (employer identification number) first. Who was going to sign the application for the EIN and offer himself as a hostage to the IRS? I finally agreed to be the guinea pig. As it turned out, the IRS added insult to injury: Just getting the number cost me $88.

Board members started asking if we had a 501(c)(3). This expensive and burdensome paperwork, which began as an IRS device to regulate the charitable tax deduction, has taken on a life of its own in the voluntary sector. Many volunteers assume you aren’t a legal voluntary group unless you have it. Others believe it is illegal to raise funds without it, an impression reinforced by donors who keep asking if the group has 501(c)(3) status.

We worried about lawsuits. Parents might sue us if a kid crushed his finger playing air hockey, or if he fell off his bike after he left the center, or if we authorized emergency medical treatment without formal permission. Someone who disagreed with a decision might sue individual board members. Obviously, we needed costly liability insurance, but how many different kinds of insurance did we need? Once, a volunteer suggested taking some teens down the street to rake leaves for a shut-in grandmother. Someone else said she didn’t think we had liability insurance for off-premises activities.

We became aware of threats from state and federal agencies. They might prosecute us for failing to adhere to requirements on nondiscrimination, or child-abuse reporting, or the Americans with Disabilities Act. We noticed that under the new Sarbanes-Oxley Act board members can face criminal prosecution for alleged lapses in financial management and disclosure.

The anxiety came to a head at our recent board meeting. Participants reviewed the above-mentioned challenges and brought to light some new ones. One woman feared we were subject to OSHA regulations and could be fined if our rented space was found in violation. Another thought we needed a state permit for a commercial kitchen, since we prepare nachos for the kids in our little oven. Since we were going to hire one part-time employee, that brought upon us the legal requirements of withholding and depositing payments to the IRS: Would we be able to get them all right? In this connection one board member told a frightening tale. She was a bookkeeper for a firm that went bankrupt, and the IRS came to her for missing taxes. “I had to hire a lawyer to defend myself,” she said, “and take out a second mortgage on my house to pay for it. I’m never going to go through that again.” It was a very depressing meeting, and I was not surprised that it would lead a board member to resign.

The Unseen Cost of Regulation

In theory government regulation is supposed to prevent bad things from happening. Someone falls on a broken stair, so you set up an agency to punish people with broken steps–or encourage liability lawyers to sue the pants off owners of broken steps. For those who live on the mountaintop of authority, it seems a grand system.

For those of us living in the real world below, government regulation has a nasty side effect: To act against supposed bad apples, you have to burden and intimidate millions of well-intentioned and perfectly innocent people engaged in creative activities. Everyone agrees that in an ideal society, friends should get together to help neighbors in their community, with tutoring, counseling, child care, teen activities, senior care, and so on. Yet this ideal is every day undermined by the tide of government regulation that threatens the liberty and property of local reformers. If we continue down this path, the only safe place for a Good Samaritan will be on the couch watching TV, and the job of helping neighbors will be done–to the extent that it is done at all–by impersonal bureaucracies.

Lawmakers need a broader understanding of regulation. Today, they focus on a supposed problem, like broken steps or misleading bookkeeping, and devise ever more ferocious penalties to punish those thought responsible. With their gaze fixed on malefactors, they overlook the impact of these penalties on the world’s benefactors. In the grip of this narrow perspective, lawmakers and liability lawyers are unintentionally creating a social monster, a system of controls and penalties that threatens an idealistic community volunteer with the loss of her home.

It’s a point that a new administration eager to promote volunteerism ought to consider.