Is this really the right time for philanthropic reform?

With everything going on in the U.S. and the world, is this really a good time to take up the cause of philanthropic reform?

Is this the right time to focus on this particular $1.5 trillion?

These are fair questions, and we’ve heard two versions of why the time might not be ripe for reforms in philanthropy:

• There are more urgent, more important issues to take up now, including Trump attacks on public services and civil rights, wars in Gaza and Ukraine and elsewhere, accelerated environmental degradation, and heightened violence against people of color and women.
• With the above problems (and environmental deterioration in particular) – we should preserve resources for the future when conditions will be even worse, but political progress more possible.

In fact, the importance and urgency of today’s crisis is one of the key reasons we think we need to press forward with philanthropic reform:

• Freeing up some of the billions of dollars languishing in donor-advised funds (DAFs) and foundation’s stored assets could reduce some of the suffering we are seeing. As anchor nonprofits from basic needs to scientific research and the arts falter and/or collapse, timely funding could stabilize core, anchor nonprofits where they are crucial to their ecosystems.
• Economic uncertainty right now is different from similar situations in the past. Typically ups and downs of the economy are based on complex economic factors, including global factors. This particular period of economic uncertainty is fundamentally different: it’s been driven by decisions based on ideology and personal gain from the Trump Administration.
• Typically when sectors of the economy shrink and people are getting laid off, the stock market goes down, too. But this time, while foundation stock portfolios have seen big swings, they have mostly held their enhanced value. As dramatic federal retrenchment is having ripple effects communities, local governments and nonprofits, foundations have more resources than they have had in other economic downturns.

Institutional philanthropy’s proclaimed role as public venture-capital and society’s “passing gear” has led to many innovations and pilot projects that made the case for a variety of established federal and state funded programs, many carried out by nonprofit contracts. To stand by during the elimination and erasure of decades of lessons of the value of everything from afterschool programs, AIDS treatment and community arts would be foolish.

And as for the idea that philanthropy should be saving now for future generations – it’s a bit like not repairing your car’s brakes because you are saving for when the transmission fails.

What the current Congress is on the verge of achieving is petty revenge on nonprofits and foundations through increased excise taxes on foundation assets, punitive fees on private higher ed endowments, accompanied by a symbolic level $150 income tax deduction for the 90% of taxpayers who don’t get to itemize their deductions.

We believe that public policies on active use of philanthropic funds need to be upgraded, and building this campaign does not take away from any of the current struggles to get adequate resources to where they are most needed.