Robert Huberty is Vice President and Director of Research at Capital Research Center. Before joining CRC in 1993, he served in several positions at The Heritage Foundation, which he joined in 1980 as editor of Mandate for Leadership, the well-known volume of public policy advice that was widely used by the Reagan Administration. Subsequently, he was Director of the Resource Bank (1983-91), where he acted as the Heritage liaison to conservative public policy organizations, and Director of Academic Programs (1991-93). Earlier, Robert was a research assistant to former President Richard Nixon, assisting on President Nixon’s Memoirs (1978). He is a graduate of the University of California, Irvine, from which he received B.A. and M.A. degrees in American history.
We are proud to announce that senior editor Matt Patterson has been chosen as the recipient of the prestigious Warren T. Brookes journalism fellowship at the Competitive Enterprise Institute. From the C.E.I. press release:
The Competitive Enterprise Institute is pleased to announce that Matthew Patterson has been selected as the 2011-12 Warren T. Brookes Journalism Fellow.
Patterson has written on a wide range of public policy issues, such as global warming, Medicare and healthcare, and labor union politics. He has been published in The Washington Post, New York Post, Washington Examiner, Washington Times, Baltimore Sun, L.A. Times, Chicago Tribune, FOXNews.com, Big Government, National Review Online, and more. He’s also been cited on-air by Sean Hannity and linked to Drudge, RealClearPolitics, RushLimbaugh.com, and others.
Patterson currently edits the Labor Watch and Green Watch publications for the Capital Research Center in Washington, D.C. His prior work includes being a National Review Institute Washington Fellow, Research Assistant for Charles Krauthammer, Health Policy Analyst for the National Center for Public Policy Research, and a Colorado State Political Coordinator and Policy communications Coordinator for Rudy Giuliani during his run for President in 2008. He is the author of the book, Union of Hearts: The Abraham Lincoln & Ann Rutledge Story. Patterson graduated from Columbia University, where he studied Greek and Latin.
The one-year fellowship is named in honor of the late nationally syndicated columnist, Warren T. Brookes, who was known for his detailed reporting, informed by science and economics. Established after Brookes’ death in 1991, the fellowship affords journalists the opportunity to improve their knowledge, reporting, and analysis of free markets and limited government.
Previous Warren Brookes Fellows have included: Timothy Carney, senior political reporter for the Washington Examiner, New York Times best-selling author and political commentator Michelle Malkin, author and Realclearreligion.com editor Jeremy Lott, and author James Bovard.
According to a Canadian nonprofit, Drummond Pike, CEO of the San-Francisco-based Tides Foundation, an innovative leftwing grantmaker, has resigned as head of the group he founded 34 years ago.
A little-known benefactor to radical activist groups, Pike achieved notoriety in 2008 when he personally contributed $700,000 to help coverup and compensate the radical community organizing group ACORN for a nearly $1 million embezzlement by ACORN financial officer Dale Rathke. Dale Rathke is the brother of Pike’s friend Wade Rathke, who founded ACORN and was a founding board member of Tides.
Tides has achieved reknown for revolutionizing the way money is gathered and distributed to left-leaning groups. The Tides Foundation maintains some 300 donor-advised funds. In 2008 it accepted $114 million from individual and foundation donors and made 1800 grants totaling $105 million. The Tides Center, a spin-off group, acts as a “fiscal sponsor” lending its management and fundraising skills and, more importantly, its tax-exempt status, to new and inexperienced activist organizations that are treated as Tides “projects” for legal and tax purposes.
Capital Research Center will examine Tides in its forthcoming October Foundation Watch publication. Word of Pike’s resignation reached us after our press deadline
Is giving to the art museum as good as giving to the homeless shelter? Is it better to give a handout to a deserving individual or make a gift to an institution? Should you give to a local charity that directly helps individuals, or is that a band-aid and your money would be better directed to supporting a group that raises money for large-scale projects?
These are good arguments to have, and individuals will have different positions on each topic. The genius of American philanthropy and the source of Americans’ unique spirit of charity is that donors are free to reach their own conclusions about what is the best kind of charity—and to act on them.
I took an interest in the new Washington Legal Foundation publication (click here) mentioned in an earlier blog by Cory Andrews for a different reason. It tries to uncover why some people make bad arguments about charitable giving.
In the WLF publication Pennsylvania governor Dick Thornburgh, Hillsdale College president Larry Arnn, Adam Meyerson of the Philanthropy Roundtable and Randolph Foundation president Heather Higgins detect an increasing resort to a disturbing argument: It’s one that says government has a duty to promote charitable giving to specific causes that take action in a particular way. The causes are those that serve the “underprivileged.” And the best way to serve the underprivileged is for government to compel support for nonprofit groups that are led by minorities and that have as their mission the creation of more minority groups.
In his remarks Adam Meyerson points out that a bill (AB 624) was introduced in California a couple years ago that went so far as to require large foundations to disclose the race and gender of their board and staff members, as well as the race and gender of the board and staff of their grantees, and their vendors. The sponsors of the bill, who subsequently withdrew it, said they only wanted more transparency, but it was clear that their intent was to have state government push foundations to give more grants to some groups and not others. (Capital Research Center has published several papers on AB 624 and its principal sponsor, the Greenlining Institute.)
Heather Higgins locates the premise of this argument: it’s the belief that a donor’s philanthropic dollars are not his or hers to contribute. They are the public’s dollars. Because a foundation is tax-exempt, its contributions are subsidized by taxpayers, runs the argument. Thus the public has a “right to know” how foundations spend their grant dollars and a right to influence the selection of the grantees.
The idea that private charity is in fact public charity is not entirely unfounded. It receives support from the income tax code. Donors and charities make a bargain with the IRS: Gifts will be tax-deductible if they go to organizations that the IRS says provide a public benefit. Yet the IRS has always defined “public charity” and “public benefit” very broadly. Except for explicit political lobbying, self-dealing and outright fraud, there are few non-commercial activities that cannot achieve nonprofit status.
Hillsdale’s president, Larry Arnn, gets to the heart of the matter. Traditional charity is rooted in self-assertion. Americans are not afraid to take the initiative, he points out, with extensive quotes from Tocqueville, because they know they have an individual right to do the right thing. But modern bureaucratic government promotes collective action, defined by experts and authorized in the name of society. These ideas flourished in the Progressive era of the late 19th and early 20th centuries, a time that saw the professionalization of charity and “social science,” the expansion of government, and the ratification of the 16th Amendment, which authorized the federal income tax. Arnn quotes Woodrow Wilson who noted approvingly,
“The thesis of the state socialist is that no line can be drawn between public and private affairs which the State cannot cross at will; that omnipotence of legislation is the first postulate of all just political theory…” (“Socialism and Democracy,” 1887)
This idea, applied to philanthropy, clarifies the bad argument that the tax deduction justifies letting politicians influence the goals of private charitable giving
In Portland, Oregon, state health inspectors forced seven year old Julie Murphy to shut down her lemonade stand or face a $500 fine because she had not paid the $120 fee to have her stand inspected. The county later apologized. Critics point out that the Food and Drug Administration only inspects two percent of seafood entering West Coast ports from Asia.
The Nature Conservancy in Oregon also sponsors child lemonade stands. No word on its reaction to the crackdown.
I just attended a Bradley Center panel in Washington, DC on the release of the annual Giving USA report. The takeaway is that giving is down but not too much. Things could be worse. Things will look up.
However, the panel and audience did a good job of unpacking some of the numbers. For instance, ten percent of all giving is comprised of gifts to grantmaking foundations. Because foundations are required to distribute only five percent of their assets annually such gifts are unlikely to have as great an impact on charity as one would imagine. It would be interesting to know whether the percentage of donor gifts to grantmaking foundations is increasing over time. However, it is hard to establish a trend when a tiny number of donors (e.g. Gates, Bloomberg, Soros) can have a major impact on the total amount of money going to foundations. Giving USA researchers note that even the total amount of giving by individuals is affected by a few gifts by high-net worth individuals. In 2009, individuals gave 75 percent of the $303.75 billion in U.S. charitable giving. (The remainder comes from foundations [13%], bequests [8%] and corporations [4%]. However, a mere five donors made gifts totaling $1.59 billion and most of that money went into their foundations.
Another interesting point: Giving USA acquires its data from the IRS, which acquires its data from taxpayers who itemize their contributions in order to take deductions. Using this data, Giving USA researchers have determined that donors are increasing their giving to international affairs, which they attribute to the aftermath of 9/11, the South Asian tsunami, earthquakes in Haiti and Chile and other signs of trouble in the wider world. However, Giving USA figures underestimate the extent of American generosity overseas, argued the Hudson Institute’s Carol Adelman, who was in the audience. She said that’s because its research does not take into account personal gifts to individuals (e.g. overseas remittances) for which the IRS does not grant a tax deduction. My gift to a cousin in Manila whose house was flooded by a typhoon has no way of being counted by Giving USA because it is not tax deductible.
There is much else to be learned from the Giving USA survey–not only what it reports, but what it does not report.
The Heritage Foundation, a 501(c)(3) nonprofit research group, will create a new 501(c)(4) advocacy organization to be called Heritage Action for America. It will promote legislation and pressure Congress, drawing on the foundation’s research and mobilizing support from Heritage’s 600,000 donor members. Heritage Action will not endorse candidates. Heritage Action will be led by Michael Needham, a former chief of staff to Heritage president Ed Feulner and former adviser to Sen. Jim DeMint.
The Heritage Foundation says it has a staff of 255 and an expense budget of $75 million. The Washington Post reports that Heritage Action for America will employ 8-12 staff in offices separate from the Foundation and will have an initial $1 million budget.
The Sierra Club and the National Audubon Society are “very disappointed.” The League of Conservation Voters says the President’s decision is “highly disappointing.” An official response by Natural Resources Defense Council president Frances Beinecke creatively manages to say nothing at all.
By contrast, Friends of the Earth sees nothing but sordid behavior. It refers to “President Obama’s Embrace of Dirty Off-Shore Oil Drilling” and urges him to “abandon his endorsement of this dirty practice.”
If the 2003 tax cuts are allowed to expire, the income tax on upper-income taxpayers will increase by 10 percent and the capital gains tax will increase by 33 percent. This is sure to have a negative impact on charitable giving, write former White House aide Scott Walter and Sandra Swirski in a recent legal backgrounder from the Washington Legal Foundation. Households whose wealth exceeds $1 million–7 percent of the population–provide half of all charitable contributions. Walter and Swirski observe that during the boom years 1995-2000 real income per capita increased by 12 percent while household giving increased by 54 percent. But charity will suffer as the economy slows and government deficit spending increases.
The disgusting welcome of the Lockerbie bomber to Libya is a reminder of the immorality of international politics. Here is a photo of Saif al Islam Gaddafi, the son of Libyan leader Moammar Qaddafi, welcoming the terrorist in Tripoli. Here is another photo of Gaddafi as he signed an agreement last month with the London School of Economics giving it $2.5 million in support of LSE’s Centre for the Study of Global Governance, a program that claims to promote corporate social responsiblity.
The junior Gaddafi is a philanthropist. He is chairman of Gaddafi International Charity and Development Foundation, identified two years ago in a CRC paper by Eliza Gheorghe as a public relations gimmick to manipulate world opinion. It appears to be succeeding. The LSE’s statement accepting the foundation’s money says, “It is a generous donation from an NGO committed to human rights and the promotion of civil society.”
The British government disclaims responsibility for the terrorist Megrahi’s release, claiming it is all Scotland’s doing, notwithstanding that Peter Mandelson, heir apparent to Prime Minister Gordon Brown, met Gadaffi junior a week before the release. One can only hope the news media makes an effort to determine who benefits (and here) from this injustice.
That’s the question asked by the Washington Post’s chief digital officer, Vijay Ravindran, who wonders how much technological infrastructure backs up Sarah Palin’s speeches, the “tea parties,” and Newt Gingrich’s excellent adventures. Good question.
Ravindran observes that the print and broadcast media mainly missed all the innovations initiated by Democrats in 2004 and 2008–social networking (MoveOn.org), online fundraising (Act Blue), and major donor fundraising for think tanks and advocacy groups (the Democracy Alliance). These improvements overcame older Republican advances in direct mail and talk radio.
Ravindran notes that “microtargeting” likely voters by data mining was important in helping leftwing interest groups turn out the vote in the 2005 Virginia governor’s race. He attributes Tim Kaine’s success to the sophisticated data aggregation techniques developed by former Clinton aide Harold Ickes, who started a private company Catalist. Ickes had clashed with Howard Dean, chairman of the Democratic National Committee, and persuaded George Soros to put up $1 million to fund the Catalist operation.
Ravindran confesses to not knowing much about conservative capability in the new infrastructure architecture. However, the Washington Post’s chief digital officer knows lots about databanks and web-based tools since he was formerly the chief technology officer at Catalist.