Colleges and Hospitals Absorb
Too Much Private Giving
profit organizations but have
only about 13 percent of annual
revenues and 11 percent of assets.
In both the nonprofit world
and the larger society, the rich
get richer while the rest of us
get poorer. We are in the first
recession on record in which
the median income of working-age people is lower at recovery
than it was before the economy
tanked, but the wealthy continue to enjoy their gains over
both the short- and long-term.
Much the same holds true for
charities; the most prosperous
organizations enjoy the larg-
Continued from Page 39
In both the nonprofit
world and the larger
society, the rich get
richer while the rest
of us get poorer.
est increases in contributions
while the smaller ones struggle
to hold on.
Take colleges and universities, for instance. In nonprofits
generally, even in foundations,
the wealthier ones recover much
faster than smaller ones. Coming out of the recession, higher education enjoyed one of the
larger increases in charitable
donations, at about 3. 5 percent.
Compare this with human services, which declined 1. 5 percent in spite of contributions in
response to disasters abroad.
Favoring colleges in and of
itself contributes to increasing
inequality in both the populace
and the charitable world. Fi-
nancial assistance to low- and
moderate-income students has
not kept pace with increases
in tuition and related costs at
both nonprofit and public insti-
tutions. This happens while the
increasingly large salaries paid
to many university executives
make those leaders themselves
top 1-percenters.
The ChroniCle of Philan ThroPy
“Our annual fund has its own Twitter account and 1,200 followers.”
Mark liTzler
care; just 7 percent directed at
least 5 percent to charity care.
Yet we know that health-related
crises are among the powerful
factors that propel people down
the economic ladder and exacerbate economic inequality.
This is not to suggest that
those nonprofit organizations—
universities, hospitals, and the
like—at the top of charity’s financial pyramid fail to provide
positive and needed goods to society, as well as to those in economic decline. They do. Yet with
their elite status and economic
power, they could do so much
more to curb inequality through
their programs and their own
internal operations. This is true
of foundations, too.
Human-service groups and
smaller community-based or-
ganizations quite often are the
most helpful to people and to so-
ciety itself in dealing with eco-
nomic inequality. They provide
direct services and also push
policy changes that would im-
prove the plight of the down-
wardly mobile and the financial-
ly insecure. It is those organiza-
tions, as well as social-change
groups, that are challenging the
structural forces that drive eco-
nomic inequality, although they
do not do this often enough or
vigorously enough. Yet they are
among the organizations most
strained financially in the face
of budget cuts and decreasing
contributions.
Nonprofits can help
close the wealth gap
by assuring equity in
salaries among all
their workers.
America’s economic inequality
and try to close the gap. In fact,
it’s a gross disservice to our nation to deny or play down its existence or to assert simply that
it’ll go away if we just give the
wealthy more tax breaks and
businesses less regulation. Acknowledging a divide doesn’t
create it; we can’t solve a problem unless we are willing to see
it and speak of it.
Nonprofit leaders need to
talk more publicly about these
dynamics and to act to close
the gap between rich and poor.
And foundations need to pro-
vide the necessary resources to
challenge growing economic in-
equality.
Mark Rosenman directs Caring to Change, a project in Washington that seeks to improve how
grant making serves the public.
More Wealthy Donors Should Support Causes That Seek to Alleviate Poverty
financial straits, it would need
to close this spring,
When millions of Americans
are going homeless and hungry
and can’t find jobs, why hasn’t
Mr. Rubenstein, who is worth
more than $2.5-billion (accord-
ing to Forbes magazine), also
provided some of his vast for-
tune to help those in need?
Strengthening the fabric of
our democratic society, which
enabled Mr. Rubenstein to become one of the wealthiest men
in the country in the first place,
would seem to be a good and
just way for him to pay his country back for the opportunities it
has afforded him. After all, for
Mr. Rubenstein $12-million is a
pittance, the equivalent of a $25
donation for most of us.
Not that the average citizen
Continued from Page 39
will get that perspective from
the news media. Journalists are
obsessed with charitable donations by very wealthy donors.
They seem to think any big act
of philanthropy is good, regardless of who benefits and whether
anybody is accountable for how
the money will be used.
Billionaires like Eli Broad,
Warren Buffett, Bill Gates, and
George Soros are never chal-
lenged by the press to account
for their gifts. At press confer-
ences, reporters seem reluctant
to ask tough questions, prefer-
ring to fawn over these bear-
ers of charity. Rarely, if ever,
do they question why so little
of the large donors’ money goes
to organizations that serve low-
income and vulnerable people.
Nor do reporters seem to focus
much attention on the plight of
nonprofits in tough economic
times.
Pablo Eisenberg, a regular
Chronicle contributor, is a senior
fellow at the Georgetown Public
Policy Institute. His e-mail address is pseisenberg@verizon.
net.
