Ms. Dennis is executive director of The Philanthropy Roundtable, a national association of grantmakers based in Indianapolis.
In the course of less than a century, government has essentially replaced voluntary institutions as the court of first resort for people seeking help.
If you were a poor, single, twenty-year-old pregnant woman in New York at the turn of the century, you would have had many places to turn for help, voluntary organizations whose goal was to help you to thrive independently. To obtain medical care, for example, you could have taken advantage of any number of free clinics, such as the Bloomingdale Clinic for the Free Treatment of the Poor. For food, clothing, and fuel you could have sought the assistance of the Ladies’ Fuel and Aid Society. For training and employment you might have gone to the Charity Organization Society, or to one of the free schools or libraries sponsored by charitable institutions. Typically, these organizations would have asked you for something in return for their help. Their intention, after all, was to provide a hand up, not a hand out, and as voluntary organizations they had no choice but to be economical with their resources.
Now imagine yourself a poor, single, twenty-year-old pregnant woman in New York today. Where would you go for assistance? Chances are you would head to the nearest government office to apply for AFDC, Medicaid, and food stamps.
What is behind this shift from voluntary helping institutions to government welfare? The development seems especially ironic in a city like New York where grantmaking foundations, which were virtually nonexistent 100 years ago, now number around 3,700. One would think the proliferation of foundations would have brought with it the growth and reinforcement of private nonprofit organizations devoted to the public welfare.
Sadly, the reverse has happened. Philanthropists have been one of the main promoters of the government welfare system. Their foundations, most of which were made possible by entrepreneurs who accumulated fortunes without the help of—or even in spite of—government, have been more interested in expanding government’s responsibilities than in strengthening private institutions to address social concerns.
When private foundations have the ability to develop innovative solutions on their own, why do so many look to government—slow, bureaucratic machine—to accomplish their objectives? Perhaps the main reason is that foundation officials have been attracted by the seemingly vast resources of government. There is a strong tendency for foundations to try to “leverage” their dollars to influence how government allocates its funds. Many foundations fund pilot demonstration projects with the idea that the successful ones will be picked up by government and replicated on a much larger scale. This is how the Head Start program began.
Making Big Brother Bigger
Such use of foundation dollars to influence and expand the scope of government is apparent on many policy issues. The Robert Wood Johnson Foundation, for example, made itself a major player in the national debate over health care reform by sponsoring a series of public hearings in which Hillary Clinton discussed health care issues. And in December 1993, Walter Annenberg announced an unprecedented $500 million grant to support school reform, stipulating that the funds would be used “to show the public what needs to be done” to improve public education. The grant was announced by President Clinton at a highly publicized White House ceremony. There was no mention of supporting the many private schools that are succeeding where public ones are failing.
A perusal of the grants list in any issue of The Chronicle of Philanthropy reveals numerous examples of efforts by foundations to shape and enlarge government’s responsibilities: $300,000 to endow a professorship to help advance equality for women in civil and economic rights; $25,000 to help neighborhood groups advocate equitable uses of New York City tax dollars; $125,000 to develop and disseminate national guidelines for sex education of children and adolescents.
Some foundations have taken their efforts to influence government policy a step further by making grants to governments themselves! The Chronicle of Philanthropy reports, for example, on a $30,000 grant to a city in Ohio to train and educate its workers, and a $450,000 contribution to a city in Minnesota to expand housing opportunities and increase tourism revenue through the development of an 18-hole golf course.
By fostering greater government involvement in providing for the common good, the philanthropic sector in this country has unwittingly undermined private voluntary institutions. Where government’s growth hasn’t usurped voluntary institutions, it has rendered them dependent. According to one estimate, non-profits now derive some 60 percent of their revenue from government subsidies, grants, and contracts. Libraries that were once supported by private donations are now government-funded; hospital services once made possible through charity are now paid for by government; schools that used to be run by religious institutions are now sustained through government grants and scholarships; and arts institutions built on private patronage now depend on government assistance.
While foundations may think they accomplish more by making use of government monies, in fact they only compromise the long-term vitality of the voluntary sector. What begins as leverage ends up as bondage. The control shows up in onerous reporting requirements for non-profit institutions, in organizations that tailor their missions to accommodate government funding priorities, and in growing congressional demands for greater regulation of non-profits.
Now—perhaps the ultimate irony—governments are launching efforts to revive voluntary initiative. Having smothered it, they are trying to bring it back to life. In school districts around the country, students are being required to perform community service as a condition of graduation. At the federal level, President Clinton has launched a national service program that makes financial and educational assistance available to those who “volunteer” at certain non- profits. But voluntarism can’t be bribed or enforced; the whole idea is self-contradictory. Government can’t resurrect what, by its very nature, it undermines. Foundations could make a difference, if only they’d stop funding the government’s expropriation of the voluntary sector’s responsibilities.