The Prize for Peace

THE NCRP QUARTERLY / WINTER 2005

IN THIS EDITION

The Prize for 1 Peace

OPINION 2 Pragmatic Politics

PERSPECTIVE 4 Economic Democracy in Peril The Gutting of the Community Reinvestment Act Photo Credit: Green Belt Movement and Its Effects on Rural America The Prize for Peace The Nobel committee places a stamp of approval on PERSPECTIVE 7 Nonprofits the environmental social justice movement, but how does Mobilize this group stay alive before and after the accolades? against CFC’s Terror List By Omolara Fatiregun and Mira Gupta Check Requirements The Nobel Committee’s Year of Firsts In October 2004, the first Nobel Peace Prize was awarded to an African 501(c)(4) 9 woman, Dr. Wangari Maathai, for her efforts in advancing a green movement. Organizations Maximizing Maathai’s Green Belt Movement (GBM), a nongovernmental organization in Nonprofit Voices Kenya, was founded in the early 1970s to raise environmental awareness and and Mobilizing promote self and community empowerment within the country. the Public Nobel committee members have expressed hope that their decision will raise awareness about the relationship between securing living environments and When it 11 keeping the peace. Natural resources are at the root of many bloody conflicts Comes to Generosity, in Africa, and nongovernmental organizations, or NGOs, are essential to the Lists are cause of social justice on the continent, often “The Prize for Peace” continued on page 13. Deceiving Prof. Wangari Maathai and Prof. Vertestine Mbaya, founding Board Member of the Green Belt Movement celebrate the Nobel Peace Prize OPINION Pragmatic Politics

By Rick Cohen might reattach Responsive Philanthropy the discrimina- The quarterly journal of the tory faith-based National Committee for Nonprofits were alert and active on the days language that he Responsive Philanthropy leading up to the national elections. Many were so reluctantly 2005, Issue No. 1 mobilizing people for voter registration, others pruned from the for nonpartisan get-out-the-vote programs. CARE bill passed 2001 S Street, NW, Ste. 620 Foundations put a large chunk of money into by the Senate in Washington, DC 20009 these nascent efforts toward enhancing the 2003 drew no Phone 202.387.9177 nation’s democratic process. expressions of con- Fax 202.332.5084 Although it’s laudable that nonprofits and cern. E-mail: [email protected] foundations did more than ever to reach out to Web: www.ncrp.org minority and low-income communities and Even more tax Yearly subscription: $25 connect them to the elections, something grave cuts: Much like (free to members) is missing from the moral compass of the non- Rick Cohen the soft endorse- ISBN: 1065-0008 profit sector at this point in history. Evidence ments of Rick Santorum, a number of national abounds of the willingness of the sector’s lead- leadership nonprofits—including Independent ership to follow its own version of Bill Clinton’s NCRP Staff Sector, National Council of Nonprofit recommended strategy of political triangula- Associations, Council on Foundations and tion—tacking to the center/right in order to Rick Cohen United Way of America—issued a letter to Executive Director curry favor with conservative voters or, in the President Bush a mere six weeks before the elec- case of nonprofits, conservative power brokers: tion calling on him to attach the CARE Act’s non- Jeff Krehely itemizer charitable deduction and the IRA chari- Deputy Director Elevating Rick Santorum: It’s hard to believe that table rollover provisions to a $146 billion grab the nonprofit sector could play up to a political bag of corporate tax cuts. With an unfathomable Kevin Ronnie leader who eviscerates what he called “consen- calculus, they argued that these demonstrably Director of Field Operations sual sex” (he actually meant consensual sex paltry charitable benefits would outweigh the between same-sex partners) by comparing gay damage of still more debilitating federal tax cuts. Andrea M. DeArment relations to “man upon dog” interactions.1 But Finance Director Maybe they thought that lauding the presi- pander to Pennsylvania’s Republican junior sen- dent’s purported leadership of “the armies of ator they did, even to the point of a couple of Naomi Tacuyan compassion” in order to trade tax cuts for the Communications Associate nonprofit leadership PACs—including the CARE Act was simply pragmatic politics. Association of Fundraising Professionals and the Fortunately for them, the letter was released Omolara Fatiregun American Society of Association Executives— without fanfare. In pre-election caution, Research Associate funneling campaign contributions to the legisla- President Bush refused to accede for the moment tor. One hopes that they were not explicitly to the call of the nonprofits and of conservatives Yann Doignon affirming Santorum’s prehistoric attitudes on in Congress. Though the corporate tax cuts, like Communications Assistant gays and lesbians. They simply turned a blind every other Bush tax slash, eventually passed, eye, choosing to focus on the senator’s support the Velcro on the CARE bill failed to work. Betty Feng for the nonitemizer tax deduction—which by Research Assistant itself is a losing proposition, from an economic Targeted IRS investigations: The nation’s non- Marissa Guananja efficiency perspective—and other charitable- profit leadership spoke out in defense of the Research Assistant giving incentives in the CARE Act. NAACP as it faces an IRS investigation for the Elly Kugler With Senate Minority Leader Tom organization’s exercise of free speech. The utter- Research Assistant Daschle’s failed reelection bid, some non- ances that someone in the conservative firma- profit leaders—or their lobbyists—have ment found so objectionable—criticizing the Cynthia Conner anonymously chortled that the electorate had civil rights policies of the Bush administration— Communications Intern bulldozed the major Democratic roadblock simply continue the core mission of the organi- stopping the nonitemizer from getting passed. zation in its 90-year history: speaking out Maybe the now ascendant Santorum and his against the failure of every national administra- © 2005 National Committee Senate colleagues appear ready to move the tion to forthrightly address issues of racial dis- for Responsive Philanthropy legislation in the 109th Congress, perhaps as crimination and social inequities. early as February or March. That Santorum But the leadership didn’t speak out against

2 Winter 2005 Responsive Philanthropy the behavior of so many church leaders who, Pragmatic politics in some circles means unlike the NAACP, brazenly endorsed political downplaying concerns about the increasing candidates from the pulpit and may them- unfettered corporate domination of our society. selves—appropriately—be under IRS investiga- Some portion of corporate tax credits might tion. Take, for example, the electioneering of the make their way into nonprofit coffers, so better Westover Hills Church of Christ in Austin, Texas. not to say anything bad about corporations. In February 2004, Legacy PAC, a conservative Some pro-corporate legislation, such as $146 group that supports anti-abortion candidates, billion in tax cuts, might serve as a vehicle for held a political event at the church, using the charitable-incentives legislation, so be careful church collection plates to raise a targeted not to offend corporate philanthropic partners. $5,000 for Republican candidates as the Texas The fact that the nonprofit sector’s leadership Republican Party Chair and Party Treasurer can be so easily and cheaply bought is almost as exhorted the faithful to vote for Republican can- obscene as Santorum’s comments about gay and didates, including George W. Bush.2 Defending lesbian relationships. This version of pragmatic pol- the PAC’s use of the church for political fundrais- itics displayed by much of the nonprofit sector’s ing was Republican National Committeeman leadership did nothing to advance a progressive Bill Crocker, suggesting that the PAC simply social justice agenda very far in November. Now is used the church (and its collection plate?), but the time for the nonprofit sector—the bulk of the church itself wasn’t involved. which should be connected to social justice and Legacy PAC’s church-based electioneering full democracy—to rediscover a voice that is clear isn’t all that unusual. Lots of conservative church- and strong and forthright. Tacking and triangulating es have gotten close to Republican PACs and to play up to some of these political leaders for politicians—even Jimmy Swaggart’s television short-term sector gains at the sacrifice of core prin- ministry endorsed the Christian Broadcasting ciples of fairness and equity in our society—and Network’s Pat Robertson for president with scant transparency and accountability in our sector— criticism from the IRS. This year, Jerry Falwell aren’t pragmatic politics. They’re a losing proposi- used his Jerry Falwell Ministries newsletter to tion that feeds directly into the right’s strategy of endorse President Bush’s reelection. silencing and controlling its opponents. Is there a connection among our sector’s obsequiousness with Santorum, its toying with Notes tax giveaways for corporations, and its pander- 1. “Sen. Rick Santorum’s comments on homo- ing to the religious right? We believe there is a sexuality in an AP interview,” April 23, 2003. big connection. National nonprofit leaders, who 2. “IRS Urged to Investigate Austin Church for now softly express concern about the Iraq war Holding Republican Fund-Raiser: Watchdog and remind their peers that federal expenditures Group Seeks Action From Federal Tax Agency for services and infrastructure are important, Against Westover Hills Church Of Christ” somehow omit both taking on the venomous (March 12, 2004, press release from anti-gay and –lesbian sentiments that unfortu- Americans United for Separation of Church nately overwhelmed much of the electorate and and State). challenging corporations for their ability to run amuck through the federal budget. Rick Cohen is executive director of the National Pragmatic politics in some views means soft- Committee for Responsive Philanthropy pedaling what the nonprofit sector should say (NCRP). NCRP is an independent nonprofit about gay and lesbian civil rights, because some organization founded in 1976 by nonprofit parts of the sector might not go along. Look at leaders across the nation who recognized that The Chronicle of Philanthropy’s post-election traditional philanthropy was falling short of issue, which includes interviews with 21 sector addressing critical public needs. NCRP’s leaders on the election; not one said a word founders encouraged foundations to provide about the potential role of foundations, much resources and opportunities to help equalize less the entire nonprofit sector, in countering the the uneven playing field that decades of eco- conservative’s rancorous, malicious campaign nomic equality and pervasive discrimination against gays and lesbians. Defending the rights had created. Today NCRP conducts research of a huge portion of the American populace on and advocates for philanthropic policies might offend some conservative-leaning non- and practices that are responsive to pubic profits and foundations or, worse, Sen. needs. For more information on NCRP or to Santorum, whose support is needed to push the join, please visit www.ncrp.org, call (202) 387- nonitemizer tax deduction through Congress. 9177 or use the enclosed membership form.

Responsive Philanthropy Winter 2005 3 PERSPECTIVE Economic Democracy in Peril The Gutting of the Community Reinvestment Act and Its Effects on Rural America

By Helen Vinton

The Community Reinvestment Act (CRA) was most marginalized communities. The changes signed into law in 1977 to offset discriminatory would also loosen the requirements on these redlining1 by banks who were not making loans particular banks. In rural America, there are few to individuals and communities that were seen banks having assets of $1 billion. Less than 2 as too risky because of gender, low income or percent of rural banks will meet the FDIC pro- race. Since its implementation, the CRA has fun- posed $1 billion threshold and thus, under the neled more than a trillion dollars of service, proposed rule change, would no longer have an The CRA currently investment and loans to rebuild distressed com- incentive to lend, serve and invest in rural communities. Now the CRA is being threatened by munities.2 The damage that would be done to requires the federal bank regulatory agencies—under pro- economic opportunity by these proposed banking industry posed changes to the act, fewer banks will be changes would not be limited to rural commu- required to comply with the CRA. According to nities. In urban America, the number of banks to lend, serve and Lorna Bourg, a community organizer and exec- currently investing in communities under CRA invest in utive director of Southern Mutual Help would also be greatly reduced. Association Inc., a rural development organiza- As banks come under more pressure to pro- our most distressed tion located in Louisiana, “The proposed duce short-term profits, many banks see the and marginalized changes will gut the CRA. We need to under- CRA as just additional paperwork and time that stand these are some of the most serious nation- can be streamlined and diluted and, for many, communities and al changes to come down the pike since the discarded. Banks have come under increased Voting Rights and Civil Rights Acts of the pressure to perform and to produce profit, divi- neighborhoods… 1960s—only in reverse. It really is about eco- dends and shareholder value. In this environ- Proposed changes nomic democracy. It’s about equal economic ment, it is important that the CRA exists to pro- opportunity for all of our citizens.” vide a balance to the inequities of a capitalistic in the current CRA The CRA currently requires the banking society that also professes a democracy. The could require only industry to lend, serve and invest in our most driving force of unbridled capitalism concen- distressed and marginalized communities and trates wealth, and results not only in the consol- banks with assets neighborhoods. Regulatory agencies like the idation of banks but also in discriminatory and FDIC monitor banks to make sure that they meet decreased services, lending and investment in of $1 billion or the communities’ credit needs and contribute to communities. Should the CRA be changed to more to … provide financial literacy and stability. This requirement apply only to banks having less than $1 billion has quietly, over the past 30 years, brought in assets, and the billion-dollar banks have a service in… our about economic equalization in diverse minori- diluted form of CRA, those billion-dollar banks nation’s most ty, rural and poor communities and neighbor- would serve poor neighborhoods and communi- hoods. The act, thanks to bank partnerships with ties only with ATMs. And because any invest- marginalized experienced community development corpora- ment in rural America would count for CRA communities. tions (CDCs) and community development credit, poor rural communities in states like financial institutions (CDFIs), has alleviated to a Louisiana could only see investments that great extent the banks’ difficulty in reaching dis- served the interests of the banks and their share- tressed neighborhoods and communities. The holders, such as in oil and gas rigs, instead of CDCs and CDFIs do the “grunt work” of devel- loans to make homeownership possible for poor oping the emerging market and the reporting on working families. the census tracts for the banks. Proposed The proposed changes in the CRA would changes in the current CRA could require only have a disproportional impact in rural commu- banks with assets of $1 billion or more to lend nities. The implementation of these changes to, provide service in and invest in our nation’s would result in the loss of billions of dollars of

4 Winter 2005 Responsive Philanthropy Tom Bearden from National Public Broadcasting interviews Lorna Bourg, Executive Director of Southern Mutual Help Association, about proposed changes in the Community Reinvestment Act by Federal bank regulatory agencies that could exempt most banks from mandatory investment in the nation’s poorest communities. Photo Credit:Association Southern Mutual Help

bank investments in rural America. Governors in have a community bank.”4 Without the balanc- states having large rural communities will have ing pressure of an intact CRA, how will bankers to look elsewhere to replace these lost revenues. explain to shareholders that long-term develop- There are some serious questions: Who will do ment of economically marginalized communi- this? The taxpayers? Which taxpayers? Probably ties is worth giving up short-term profits? The not those in the highest income brackets. Where caring banks that continue voluntary invest- will the governors get the revenue? Or will they ments would find themselves at a competitive just suffer an increasing wealth gap in their disadvantage to banks that won’t invest. states with its concomitant “underdeveloped Banks are feeling besieged by the burden of world” or “third world” characteristics? newly imposed regulations such as the Patriot In a recent op-ed piece in the New York Act and the Sarbanes-Oxley Act, as well as the Times, Robert Rubin, former Treasury Secretary long-standing Bank Secrecy Act. While that sen- and current Citigroup director and Michael timent is understandable, the banking industry Rubinger, president of the Local Initiatives has determined that to attack the burdensome Support Corporation, maintain that “the capital paperwork and accountability of those regulato- made available under the act has helped rebuild ry requirements is not feasible and could be entire communities.”3 understood as unpatriotic. The easier target is to While bankers may complain that CRA is a seek regulatory relief from the CRA. Yet in a sur- burden, they also acknowledge that the CRA has vey within the banking industry itself, the regu- been a needed leverage with their boards and latory burden of CRA is not even near the top of stockholders to encourage the kind of involve- its concerns.5 ment in communities that is good for banks, for Change in the CRA does not even have to communities and for the common good. pass through Congress. Changing the CRA or Despite complaints, the CRA has not solely even gutting it entirely is in the hands of federal been a burden for banks. It has, in fact, been bank regulators, the Federal Deposit Insurance profitable and has opened up new and emerging Corporation (FDIC), the Office of Thrift markets to banks. As one rural bank president, Supervision (OTS), the Office of the Comptroller who was recently the president of Independent of the Currency and the Federal Reserve Board. Bankers of America, said of poor rural commu- The leaders in pursuit of changing the CRA are nities, “If we can make a better community, to the OTS and FDIC. The other two regulators put people in better homes, get them better edu- have deferred for now but could be pressured to cated, give them a better environment to live in, follow the leaders of this movement. Judy then I end up making more money. If you don’t Kennedy, president of the National Association save the community, guess what—you don’t of Affordable Housing Lenders, says, “This

Responsive Philanthropy Winter 2005 5 whole thing is a charade. … The regulators have quate or no child care for working parents and figured out they don’t even need to go to Capital an accumulation of other stressors. Further dis- Hill to gut the entire CRA.” investment by gutting the CRA will only exacer- It is ironic that the banking community is bate these problems and is unworthy of this attempting to throw off the burden of federal great nation. regulation, when federal regulations have for years brought protection, prosperity and posi- Notes tion to the banking industry. Banks have benefit- 1. Redlining is defined as an an illegal practice ed from regulations to prevent a run on banks in which certain neighborhoods—usually and federal commitments to “bail out” failing poor, inner-city neighborhoods with run- banks, as was seen in the multibillion-dollar down housing stock—are defined by lenders bailout of the savings and loans in the 1980s. and builders as areas in which mortgages will The Federal Reserve helps banks access money not be issued, or credit or insurance will be at stable rates, makes discount funds available to denied. From: www.pbs.org/hometime/glos- banks and insures their liquidity.6 The Federal sary/buying2.htm Reserve is the big brother that guarantees that 2. National Community Reinvestment Coalition dollars are available for the banking industry - Source: FDIC Statistics on Depository and helps to stabilize the economy. So, in effect, Institutions Database the banks have survived and thrived on the reg- 3. New York Times OP-ED, Saturday, December ulatory agencies that the taxpayer has supported 4, 2004 through our federal government. 4. National Public Radio Morning Edition, If we, as a nation, can go to Iraq and rede- October 19, 2004 velop towns and villages devastated by war and 5. Economic Growth and Regulatory Paperwork engage in a long and expensive struggle to bring Reduction Act - http://www.egrpra.gov - democracy to that nation, we can do no less for Summary of Top 10 Issues Derived from our poorer neighborhoods and communities Banker Outreach Meetings devastated by the transitioning economies of 6. http://www.federalreserve.gov/generalinfo/ global trade, the export of jobs, the historic dis- faq/faqmpo.htm investment due to poverty, gender and race discrimination. Poor communities, low-income Helen Vinton is Assistant Executive Director and women and children, and people of color have Life Quality Director for the Southern Mutual suffered for years the disproportionate impact of Help Assocation (SMHA). In her role with the effects of cumulative stressors: poor health SMHA, Sr. Helen has worked to ensure econom- care, minimum wage, overwork when a parent ic security for displaced workers in Louisiana. holds two jobs, poor performing schools, inade- She sits on the board of directors of NCRP.

Available on our Website State of Philanthropy 2004

We are proud to release State of Philanthropy 2004, the second edition of our signature biennial publication that presents current and diverse perspectives from nonprofit, academic, foundation, and advocacy leaders, and discusses how philanthropic institutions can assist the nonprofit sector in securing social and economic justice for the nation.

State of Philanthropy 2004 provides a much needed collection of analyses on the accomplishments and shortcomings of foundation, corporate, and workplace philanthropy, with a focus on the social justice arena.

To obtain more information, to make a membership contribution, to view this publication online or to order a printed copy using a credit card (Visa or MasterCard), please visit NCRP on the Web at www.ncrp.org. Publications cost $25 per copy ($12.50 for NCRP members) unless otherwise noted. NCRP also accepts checks. Mail checks to NCRP at 2001 S Street, NW,Suite 620,Washington, DC 20009. Kindly include your name, organizational affiliation (if any), mailing address, phone number and e-mail address—and specify which publication(s) you are requesting and the quantity, to ensure you receive your order.

6 Winter 2005 Responsive Philanthropy PERSPECTIVE Nonprofits Mobilize against CFC’s Terror List Check Requirements Combined Federal Campaign requires participants to check employees against terror watch lists

By Alan Rabinowitz

After a season of complex relationships cle, Romero, ACLU’s executive director, provid- between federal authorities, the Ford Foundation, ed an essential bit of background to both the the ACLU and many other groups, the Associated controversies about the no-fly lists and the obvi- Press reported on Nov. 11, 2004, that “the ously closely related issues arising from the new American Civil Liberties Union and a dozen non- Combined Federal Campaign (CFC) regulation: profit groups are suing the government over new rules requiring organizations that receive money Under a little-known law from 1977, the for a federal employees’ charitable drive to check International Emergency Economic Powers their staffs against terrorist watch lists.” Act, serious potential sanctions apply to all So what are the implications now for individ- employers and people in the United States, uals, for charities and for our civil society? No not just to CFC recipients. With the expan- one wants to be blown up by terrorists. No one sion of terrorist watch lists since Sept.11, the wants to be called unpatriotic. And those of us implications of this policy have grown expo- who remember the harm done to our society by nentially, but its existence and broad reach the McCarthy era’s proliferation of guilt by asso- remain largely unknown. U.S. law forbids ciation do not like the smell of what is transpir- employers from hiring any individual desig- ing for the world of nonprofit organizations. I nated on various governmental lists. If they intend this piece to provide some useful back- hire someone from these lists unknowingly, ground to the issues as they have now been the person or organization may be liable for framed by the ACLU’s suit. civil sanctions, and if intentionally, criminal The current stories do not yet indicate that sanctions may be imposed. the present situation has reached the propor- tions of Senator McCarthy’s investigations in the I have not read any explanation of why the late 1940s and early 1950s. During that period, head of the Combined Federal Campaign (which even you might have found yourself shying away entices federal employees to contribute to one from any contact with an old friend who hap- or more in a long list of charitable and tax- pened to turn up on an FBI list of attendees at a exempt educational/advocacy organizations public meeting or in the address book of some- such as the ACLU) waited until October 2003, one brought in for questioning concerning activ- so many years after 1977 and two years after ity with known communists. But I fear that the September 11, 2001, to begin requiring those United States is entering another time when designated CFC grantees to certify that “they do constructive relationships between government, not knowingly employ individuals or contribute organizations and individuals are threatened funds to organizations found on terrorist related and even altered to the detriment of our demo- lists promulgated by the U.S. government, the cratic and pluralistic heritage. United Nations, or the European Union.”1 The first set of governmental activities The MacArthur Foundation’s grant letter (as involved in the present situation are the so-called reported by the ACLU) points grantees to “any no-fly lists, which consist of an assortment of list of suspected terrorists or blocked individuals names garnered from a new set of unidentified maintained by the U.S. government, including sources. In an Aug. 17, 2004, article in The but not limited to (a) the Annex to Executive Washington Post, Anthony Romero wrote that Order No. 13224 (2201) (Executive Order “you, too, could be a suspected terrorist” if by Blocking Property and Prohibiting Transactions chance your name, or a variation of your name, with Persons Who Commit, Threaten to Commit, was found on this list, and you were hauled off or Support Terrorism), or (b) the List of Specially for questioning and not allowed to fly. In his arti- Designated Nationals and Blocked Persons

Responsive Philanthropy Winter 2005 7 maintained by the Office of Foreign Assets ty that engages in these activities. Control of the U.S. Department of the Treasury.” Pity the nonprofit organization that tries to Rockefeller Foundation: In accepting these comply with this kind of ukase.2 First of all, how funds, you certify that your organization does one definitively and affirmatively know does not directly or indirectly engage in, pro- who in one’s life might be committing, threaten- mote, or support other organizations or indi- ing to commit, or supporting terrorism, especial- viduals who engage in or promise terrorism ly employees and all sorts of third parties con- activity. [no countersignature required] nected in one way or another to one’s nonprofit work? The McCarthyite stain of guilt by associa- Similar language appears in grant letters from tion pales in significance to the work of sniffing MacArthur, CS Mott and other foundations. The out the kind of unpatriotic activities proscribed ACLU has refused to countersign the Ford by President’s Bush’s 2001 executive order cited Foundation’s letter but has acknowledged that above (which was issued before the Patriot Act Ford has the right to decide for itself to whom it was passed and signed). wishes to give a grant and with what conditions. As for current lists, while there was originally The issues presented are fundamental to our lib- confusion over which lists to check (among erties and complex beyond this space and my other things), OPM has clarified this with a abilities to deal with them. The media will cer- memorandum on its Web site.3 The memoran- tainly be full of commentary on the situation as it dum states that there are only two lists to check, unfolds, and one can anticipate that the voices on but shows links to five other “relevant Web the Fox network will be different from those on a sites.” Once any false matches are eliminated, more independent path . For those who want to the organization is to report the person to the delve more deeply, there will be the legal briefs Office of CFC Operations (OCFCO). Here is and the analytic articles that will pepper the phil- what OMB Watch had to say in its Nov. 15, anthropic press and academic journals (for 2004, statement on this set of problems: embedded in much of the complexity inherent in this situation is academic freedom itself and, This active obligation is misguided, unduly bur- heaven help us, ultimately the possibility of the densome, and vulnerable to abuse for political kind of shameful controversy about loyalty oaths purposes. The lists are notoriously fraught with that besmirched the academy in the 1950s). inaccuracies and ambiguities, so there is no At least 12 organizations, including OMB way to verify whether a name on the list is actu- Watch, are plaintiffs along with the ACLU in the ally the individual encountered (they may coin- suit challenging the CFC’s requirements. The cidentally have the same name or may be using board of the National Committee for Responsive a different name but still be the person listed). Philanthropy voted to “publicly show support for Government watch lists change continually, so the ACLU suit,” and I do not know how many charities would have to check them continual- other organizations will do the same. While all ly, which they don’t have time and resources to this is going on, the U.S. Congress has before it do. Compliance is simply impossible. various proposals that would affect the organization, activities, tax status and reporting require- At one end of the spectrum, the CFC director, ments of what we currently refer to as the non- Mara Patermaster, naturally expects the affected profit charitable tax-exempt philanthropic sector. charities to take affirmative action in the form of Apparently NCRP, the Council on Foundations, checking the lists. At the other end are the ACLU and Independent Sector have differing opinions and whatever organizations follow its lead in on the multivariate issues to be legislated; the withdrawing from the federal campaign. In issue for this article is how such new legislation between are the foundations that are now requir- may handle the manifest implications of terror- ing compliance from their grantees, as seen in ism and the fear of terrorism reflected in the the following examples collected by the ACLU: paragraphs above. So the barriers set forth for the Combined Ford Foundation: By countersigning this Federal Campaign and the ACLU’s suit claiming grant letter, you agree that your organization they are unconstitutional are merely part of a will not promote or engage in violence, ter- larger tapestry. I do not think I am the only one rorism, bigotry or the destruction of any who is worried about how fears of terrorism (as State, nor will it make subgrants to any enti- revealed in this controversy), intrusions into our continued on page 15

8 Winter 2005 Responsive Philanthropy 501(c)(4) Organizations Maximizing Nonprofit Voices and Mobilizing the Public1

By Jeff Krehely

Many of the most visible and politically active often refer to them as “social advocacy organi- nonprofit organizations in the United States are zations”—it is important to remember that most Providing classified by the Internal Revenue Service (IRS) as are decidedly apolitical and are merely given 501(c)(4) social welfare groups. The National 501(c)(4) status because they don’t easily fit into support [to Rifle Association (NRA), National Organization another nonprofit category. For example, help establish for Women (NOW), American Civil Liberties 501(c)(4)s include the following varied groups: Union (ACLU) and Sierra Club, for example, are 501(c)(4) high-profile 501(c)(4) organizations that are • Over the Hill Soccer League, active participants in the nation’s public policy • Jersey Devils Fastpitch Softball Team, organizations] process. They lobby for and against legislation, • Georgia Amateur Wrestling Association, would help get issues on policymakers’ radar screens, and • Beavercreek Popcorn Festival Corporation, educate and mobilize the public around election • Lumberjack World Championships grantees work time, with 2004 being no exception. Foundation, toward Foundations should consider providing sup- • Ballroom Latin and Swing Social Dance port to their 501(c)(3) charitable grantees to help Association, effecting long- these groups develop the institutional expertise • United States Open Sandcastle Committee, term systemic required to establish and manage—legally and and effectively—affiliated 501(c)(4) organizations. • Valley Stock Tractor Pullers Association. changes that Providing support would help grantees work toward effecting long-term systemic changes Unlike 501(c)(3) charities, 501(c)(4) organi- would assist in that would assist in fighting the root causes of zations cannot offer their donors the ability to fighting the the social, economic and political problems make tax-deductible donations, and they gener- besetting their constituents. ally do not receive foundation grants. As a trade- root causes of According to the IRS, “To be considered oper- off, these social welfare organizations can the social, ated exclusively for the promotion of social wel- engage in unlimited lobbying activities, while fare, an organization must operate primarily to charities may only do an insubstantial amount of economic and further (in some way) the common good and gen- lobbying.2 Similarly, charities are barred from political eral welfare of the people of the community (such doing any kind of direct electoral work, but as by bringing about civic betterment and social 501(c)(4) groups can encourage their “mem- problems improvements).” Many organizations that fail to bers” to support particular candidates for public receive 501(c)(3) charitable status—because, for office. The definition of “member” is fairly broad besetting their example, their program focus is too narrow or and open to legal interpretation—by both the constituents. they are explicitly political—are granted 501(c)(4) IRS and the Federal Election Commission status. According to data from the National (FEC)—with some organizations purportedly Center for Charitable Statistics, there are 120,000 counting visitors to their Web sites as members. 501(c)(4) organizations on file with the IRS, com- Although charities must restrict the amount of pared with nearly 1 million 501(c)(3) groups. lobbying they do, they are permitted to engage Additional data from the National Center for without limit in a wide range of other kinds of Charitable Statistics suggest that 501(c)(4) organi- advocacy activities that do not fall under the zations rely on membership dues and other indi- IRS’s definition of lobbying, such as public edu- vidual contributions for a large part of their budg- cation, writing op-eds on general issues of con- ets. PoliticalMoneyLine.com tracks the activities cern, holding community forums, etc. of about 300 politically active 501(c)(4) organiza- Many savvy and well-financed 501(c)(3) and tions and reports that these organizations earned 501(c)(4) organizations know how to adapt to $1.7 billion in income in 2003. tax laws and regulations that prevent them from Although many 501(c)(4) organizations are engaging in unlimited lobbying and limited politically active—nonprofit sector researchers electoral work or receiving tax-deductible and

Responsive Philanthropy Winter 2005 9 foundation gifts. By bringing a 501(c)(3) and a and the public education system. 501(c)(4) together in one organization—and National organizations that consist of a social carefully managing the flow of money and staff welfare organization, an affiliated charity and a between the two organizations—groups can PAC have the best of all worlds—they can receive tax-deductible and foundation gifts and engage in unlimited lobbying, financially sup- continue to lobby extensively without violating port candidates for public office, receive foun- the law. The NRA, NOW, ACLU and Sierra Club, dations grants, and offer donors the ability to for example, all have this structure in place and make tax-deductible gifts. Although it’s not diffi- receive hundreds of thousands of dollars—if not cult to set up these hybrid organizations, a millions—from foundations and individual degree of legal and accounting expertise is nec- givers through their 501(c)(3) affiliates, which essary. And an organization’s legal and account- generally have names that are similar to the ing expertise is highly dependent upon its budg- 501(c)(4) entity—for example, the Sierra Club is et—the better financed an organization is, the a 501(c)(3) organization, while the Sierra Club more likely it is to have the counsel needed to Foundation is a 501(c)(4). Many other large establish affiliated organizations and run them national organizations use a similar structure. effectively and legally—consider that Americans Social welfare groups are also allowed to for the Arts was able to establish a 501(c)(4) have an affiliated political action committee thanks to Ruth Lily’s multimillion-dollar gift. (PAC), further distinguishing them from charities. Further, many smaller charitable organizations PACs allow organizations to get directly involved might be daunted by the paperwork required to in elections at the state and national levels by establish a complex structure, or fear that if they providing money to candidates running for pub- run afoul of tax laws (by becoming too involved lic office. The NRA, NOW and Sierra Club all with a politically active organization, for exam- have at least one PAC affiliated with the main ple), they will lose their coveted 501(c)(3) status. national organization, and have pumped mil- In fact, most charities are so afraid of losing Since foundations lions of dollars into the last several elections. their tax status that they don’t engage in any type One of the most visible and active 501(c)(4) of lobbying at all—even though tax laws clearly of all shapes and organizations is MoveOn.org, which builds state that they may do so up to certain spending sizes are fond of grassroots and financial support for progressive limits. Many nonprofits prefer not to stray from political ideas and candidates for public office. their primary service-delivery programs, either trumpeting the MoveOn.org has its own PAC, the MoveOn for fear of losing their tax-exempt status or PAC, which was heavily engaged in the 2004 because of a desire to dedicate all of their invaluable elections. Billionaires Peter Lewis and George resources directly to their constituencies. But if ‘technical Soros have given MoveOn.org and MoveOn organizations want to effect permanent, sys- PAC millions of dollars in donations. temic changes, they need to also be prepared to assistance’ that Americans for the Arts, a 501(c)(3) charity advocate—including by direct and grassroots their program that has the broad mission of advancing the arts lobbying—for their causes and constituencies. in America by “representing and serving local Since foundations of all shapes and sizes are staffs provide to communities and creating opportunities for fond of trumpeting the invaluable “technical grantees, they every American to participate in and appreciate assistance” that their program staffs provide to all forms of the arts,” recently established a grantees, they should consider providing the should consider 501(c)(4) organization called the Americans for kinds of assistance that can be used to establish the Arts Action Fund. In 2002, Ruth Lilly—the a 501(c)(4) organization, such as legal and providing the pharmaceutical heiress—gave Americans for the accounting training that will give grantees the kinds of Arts $120 million. Part of this donation is being skills and expertise necessary for managing such used to support the fund’s work. an organizational structure. assistance that According to a press release from Americans Data and experience show that there is pre- can be used to for the Arts, there is a need to connect citizens to cious little foundation support for nonprofit lawmakers around the issue of government fund- advocacy. For example, the Foundation Center establish a ing for the arts. The Action Fund will allow the reports that only 1.2 percent of all grant dollars 501(c)(4) organization to make these connections, through in 2002 were allocated for social action and an extensive grassroots organizing and mobiliz- civil rights work (see FC Stats online at fdncen- organization. ing effort. The Action Fund also plans to issue a ter.org). This outcome can be traced to a variety report card on policymakers’ voting records for of causes, such as overly conservative advice arts funding support. It hopes to reverse the trend from foundation attorneys, foundation trustees of declining federal and state government finan- fearing bad press or any kind of political expo- cial support for arts programs in communities continued on page 15

10 Winter 2005 Responsive Philanthropy When it Comes to Generosity, Lists are Deceiving

By Rick Cohen

End-of-year BusinessWeek list lauds 50 most gener- wealth-disproportionate charitable givers? The ous philanthropists; deeper digging suggests murky data indicates that working people, the nation’s motivations and reveals they give less of their middle class are generous beyond their asset income and assets than their lower income peers. wealth, giving to charity frequently without the incentive of tax deductions—because so many Feel-good stories about charitable generosity of them are nonitemizers on their federal taxes. abound during the holiday season, including A report from the President’s Council of tabulations of the altruistic behavior of the Economic Advisors four years ago revealed that nation’s wealthiest business titans. This year, as the bottom quintile of households with a positive in the recent past, Bill and Melinda Gates top net worth gives 6 percent of income and 13 per- the list of the nation’s most munificent benefac- cent of wealth toward charity annually. The other tors for the nonprofit sector and people in need, four-fifths of the population hovers around the 1 having pledged over $10 billion of their massive percent mark against both measures. In the past wealth to charity between 2000 and 2004. decade, working people have been economical- Other well-known names on the list of “the ly squeezed by rising out-of-pocket health costs, 50 most generous philanthropists” published depressed real wages, escalating college tuition annually by BusinessWeekinclude finance wiz- and fees, and an array of other pressures, but ard Warren Buffett (number 3), Microsoft’s co- they give to charity. Even when the big donors founder Paul Allen (9), eBay’s Jeffrey Skoll (16) and endowed foundations shrunk their giving in and Pierre and Pam Omidyar (18), Big Apple the wake of the post 9/11 stock market down- Mayor Michael Bloomberg (13), Home Depot turn, middle class givers stepped up to the plate. cofounders Bernard Marcus (14) and Arthur The BusinessWeek list omits the sad truth that Blank (35), and television’s Oprah Winfrey (40). many of the wealthy could use a healthy dose of While the willingness of these magnates to benevolence. For example, for the ultra-wealthy part with some off their discretionary capital estates subject to the estate tax, nearly 4 out of 5 ostensibly for the benefit of society merits leave nothing to charity. Despite conservative praise, a little perspective is in order. political contentions that the rich give to charity There’s no debate that the charitable giving of simply because of altruistic motivations, research the super wealthy dwarfs the assets, not just the from the Urban Institutes suggests that the per- charitable donations, of the rest of the U.S. pop- manent repeal of the estate tax, a conservative ulation. The wealthiest 6.5 percent of Americans political flashpoint, will result in a loss of as account for approximately half of all charitable much as 37 percent of charitable bequests and giving. Households with incomes over $1 mil- another 12 percent of annual charitable giving. lion account for more than 20 percent of indi- While the amazing wealth of people like Bill vidual charitable donations. Gates and Peter Allen probably makes the ques- However, the wealthy are not quite as gener- tion of taxes irrelevant as a motivating factor ous as their control of the nation’s assets. The top behind their giving, for most of the wealthy, tax 1 percent of the nation control 41 percent of incentives—the ability to take donations off of tax- household wealth, but generate only 33 percent able income, the ability to make tax-free charita- of charitable donations. This shouldn’t be a sur- ble bequests—are undeniably important. For that prise. NewTithing’s Claude Rosenberg has been reason, it is noteworthy that BusinessWeek list res- making this case for years, this past year pointing idents such as Warren Buffett and George Soros out that charitable giving would have jumped by are vocal opponents of the Bush Administration’s $41.6 billion if tax filers earning between estate tax repeal agenda, recognizing the impor- $200,000 and $10,000,000 contributed as gen- tance of tax incentives even to the ultra-wealthy. erously as their lower income peers. Remember that no less than Bill Gates, Sr. is a If the wealthy are somewhat less charitable national leader in the effort to save the estate tax. than their wealth might indicate, who are the The motivations of the nation’s top givers are a

Responsive Philanthropy Winter 2005 11 mix of factors, the first being tax benefits. Surveys py, corporate philanthropy, and political contri- of wealthy givers indicate that the respondents butions constitute a murkier picture and more ascribe their giving to selfless philanthropic urges, complex picture of some of these tycoons than but believe that their friends and peers are more their gimlet-eyed holiday season charitable motivated by tax concerns. Pretty obvious that they hagiographies. ascribe to their friends and peers the tax motiva- Take, for instance, Tom Monaghan’s giving, tions that factor into their charitable calculations. based on his Domino’s Pizza and Detroit Tigers A second motivation is clearly a sense among wealth. Monaghan gives predominantly to strict- some people of giving back to the society that ly Catholic religious causes through his Ave allowed them to generate their huge wealth. The Maria Foundation and others, including sup- BusinessWeek list appears to be a register largely porting Ave Maria College whose law school of entrepreneurs, people who actually made the faculty includes Judge Robert Bork, failed money they are now giving away. Studies suggest Supreme Court nominee, currently also a fellow that entrepreneurs are more charitably generous at the conservative Hudson Institute and Hoover than inheritors. According to one report, for every Institution. Monaghan’s personal and corporate $1,000 of entrepreneurial wealth, $4.56 goes to philanthropy have been major supporters of charity; for every $1,000 of inherited wealth, only groups actively opposed to women’s reproduc- $0.76 goes to charity. This may help explain the tive rights. Remember one of Monaghan’s major estate tax advocacy of someone like Buffett, know- charitable endeavors, the construction of the ing that inheritors do not quite see their societal world’s largest free-standing crucifix, 25-stories obligations in the same light as the original earners. tall, on the Ave Maria College campus, which A third motivation of wealthy donors is clearly fortunately for Ypsilanti zoning officials rejected, self-interest. Wealthy donors typically devote a and Monaghan and his college decamped from significant portion of their philanthropy to sustain Michigan in favor of Naples, Florida. the arts and cultural, medical, and educational Qwest’s Phillip Anshutz is another of the institutions that they typically patronize. For the major donors on the BusinessWeek list, with a most part, charitable giving by the wealth is for the peculiar brand of philanthropy. Part of his phil- most part hardly a redistribution mechanism in the anthropic giving in 2003 was a $4.4 million U.S. economy, but rather sustains existing eco- contribution he was compelled to make as part nomic and societal relationships. As one observer of a settlement he reached with New York’s of this phenomenon noted a decade ago, for the Attorney General Elliot Spitzer. The penalty wealthy, charity truly does begin at home. stemmed from Spitzer’s litigation against For many, their philanthropy occurs through Anshutz for his profiteering with Qwest stock private foundations they establish and run or oth- against the interests of his own employees. As erwise control through family members and Qwest stock plunged in six months from $64 to trustees. Although the donations to the founda- $1.95, Anshutz sold 6.1 million shares for a tions count in the specific calendar year, founda- profit of $241 million while Qwest employees tions are required to spend a minimum of 5 per- with their retirement plans invested in Qwest cent of their assets a year, and nearly all spend lost substantial portions of their nesteggs. no more than that 5 percent. The result is that Anshutz’s behavior prompted Forbes to some of the multi-million dollar philanthropic describe him as the greediest executive in donations made by the BusinessWeek top 50 sit America. Anshutz’s philanthropy also has a in tax-exempt endowments as opposed to reach- major political content, with major emphasis ing nonprofits through immediate distributions. on the “family values” agenda of the A fuller picture of the distribution of dispos- Republican Party, including James Dobson’s able wealth by the nation’s business magnates Focus on the Family. includes not simply their direct charitable giving The mainstream press generates many stories and their investments in their family foundations. of holiday season charitable endeavors, some of For many of the BusinessWeek moguls, they also which are clearly heartfelt efforts by affluent control the charitable giving of their corpora- entrepreneurs and celebrities to respond to the tions’ philanthropic wings, often distributing needs of their fellow citizens. Taken as a whole, charity with more explicit business self-interest the philanthropy of the nation’s wealthiest than their more selfless-looking personal or givers, through their checkbooks, their founda- familial donations. In addition, of course, many tions, and their corporations, plus their non-tax of these people are major donors to politicians, exempt giving to their favorite politicians consti- political parties, and political action committees tutes a mosaic of personal and political priorities (PACs) themselves and through their corporate that more frequently than not contribute little to offices. The combination of personal philanthro- this nation’s societal equity.

12 Winter 2005 Responsive Philanthropy GBM Thrives on Varied Sources of Funding “The Prize for Peace” continued from page 1

taking the form of protecting the lives of citizens He emphasizes the need for: (1) core operating and empowering the most disadvantaged in the support, (2) long-term sources of funding rather midst of war. On the link between natural than short-term grants that support causes only resources and conflicts in Africa, Maathai when they are popular, (3) donors who do not set explains, “When our resources become scarce, nonprofit agendas, and (4) donors who are more we fight over them. In managing our resources interested in salient mission statements than Indeed, the Green and in sustainable development, we plant the financial reporting and program evaluations. seeds of peace.” Maathai and the GBM tree- Belt Movement has planting campaign are responsible for planting So how does the Green Belt Movement a long history with 30 million trees nationally, providing a source of exist? inexpensive wood fuel for poor households and Before its founder won the Nobel Peace varied sources of empowering and engaging women in the uplift Prize, little was known about the Green Belt of their communities. Movement. As Dr. Maathai notes in her book, funding. Project The Green Belt Movement: Sharing the support grants African Civil Society Organizations and Approach and the Experience, “Unlike many Social Justice other organizations in Africa, it [GBM] is not a usually fund the It is clear that social justice doesn’t just hap- branch of a foreign NGO but an indigenous ini- GBM tree planting pen in the United States. Moreover, resource- tiative, registered and headquartered in related conflicts are not isolated in Africa. Nairobi.” Because GBM is an independent enti- or civic education Where wars have been plaguing the continent— ty, it falls under the radar screen for the few fun- programs… in the Democratic Republic of Congo (DRC) and ders interested in supporting indigenous social neighboring countries, in Liberia, and between justice movements abroad. Infrastructure Eritrea and Ethiopia—NGOs have been integral Indeed, the Green Belt Movement has a long funds and to carving out peace agreements and rationing history with varied sources of funding. In 1974, scarce resources, particularly when hostile gov- the organization existed as Envirocare Ltd., a in-kind ernments do not adequately represent the needs company created to hire unemployed Kenyans of of indigenous minorities. the Lang’ata province to plant trees. Envirocare contributions In the DRC, Rwanda and Burundi, the miner- was funded with Maathai’s own money. Later as enable the al coltan has been responsible for the deaths of Save the Land Harambee, the organization 3.5 million people over the past four years. became a pet project of a few funders, who pro- organization to Coltan is in great demand because it is both vided small donations. Now as GBM, the organ- carry on its daily indispensable for the production of cellular ization has five notable funding streams and var- phones and valuable for military purposes, such ious funders that offer specific types of support. activities… as transporting radioactive materials and pene- Project support grants usually fund the GBM Advocacy/ trating armor. The DRC is blessed and cursed tree planting or civic education programs rather with harvesting 80 percent of the world’s supply than the organization as a whole. The United awareness funds of coltan. The blessing is the abundance of a Nations Fund for Women, for example, has sup- valuable natural resource; the curse presents ported GBM tree-planting projects. The Open publicize the itself across three countries as wars ensue Society Institute, Commission on Global organization and between the DRC and neighboring states over Governance, National Endowment for the grand prize—the lucrative rights to exporting Democracy, Earth Love Fund, Norwegian its social and the mineral to the West. People’s Aid and Heinrich Böll Foundation all economic justice John Murhula Katunga of the Nairobi Peace fund GBM civic engagement programs. And the Initiative advocates for reconciliation in coltan- United Nations Environment Programme and initiatives. related conflicts through nongovernmental organ- the U.K.-based Comic Relief make specific proj- izations. In his efforts, Katunga makes specific ect support grants to the GBM Pan-African recommendations to international funders of civil Training Workshops. society on bolstering nongovernmental organiza- Infrastructure funds and in-kind contributions tions so they can better advocate peace and enable the organization to carry on its daily activ- social justice. Katunga’s recommendations echo ities. These grants are integral to the survival of those of nonprofit advocates in the United States. GBM. The organization has had a history of being

Responsive Philanthropy Winter 2005 13 Tree seedlings maker who used to be on the receiving end of waiting to be nonprofit grantmaking, understands the daily planted in the struggles of operating a nonprofit organization. Aberdare Forest, a major water From her experiences in nonprofits, she views catchment core operating support as the most necessary area in Kenya. type of funding, but the most difficult to attain. For that reason, the Small Planet Fund offers core operating support to GBM and other global social justice movements.

Insights from a Social Justice Funder: Give them what they Need and ask Just Enough Questions Small Planet Fund is a new and indeed small operation that runs on the volunteer efforts of Lappé and her mother. Subsequently, all grants made are small—usually less than $10,000 per organization per year. Because of the small

Photo Credit: Mia MacDonald awards, Lappé does not require extensive program evaluations or documentation from her grantees. expelled from office space when its advocacy ini- She feels that most importantly, social justice tiatives for land conservation were in opposition advocates must act out their missions. Extensive to the business interests of Kenyan government documentation of expenditures for small grants officials who wanted to exploit lucrative land would take valuable time away from GBM staff. resources. Oxfam Netherlands, Steven Rockefeller Lappé’s grantmaking strategies at the Small of the Rockefeller Foundation, and Joshua Planet Fund offer noteworthy insights for funding Mailman of the Sirius Business Corporation in social justice organizations. First, core operating New York City all made donations for the organi- support is an integral component of the nonprof- zation’s new headquarters in Kilimani, Nairobi. it funding stream that foundations should Another facility at Lang’ata, which serves as a acknowledge. Second, though nonprofit account- training center, was erected with donations from ability is important, it is possible for documenta- the government of Austria through CARE-Austria. tion to become excessive. If the cost in staff time Renovations to office space were carried on with of program evaluations and tracing grant dollars the support of Tudor Trust of London. closely rivals the total amount of a grant, perhaps Advocacy/awareness funds publicize the there should be more informal, less costly mech- organization and its social and economic justice anisms of measuring efficiency. Third, the Lappé initiatives. The African Development Foundation team at Small Planet Fund proves itself to be a and others have funded documentary films group of funders who educate themselves on the about the movement. Maathai’s book, which various organizations that meet their mission and documents the strategies of GBM and its devel- funding requirements. Small Planet Fund found opment in Kenya and expansion to the United out about Maathai and other international social States, was made possible with the funds from justice advocates through vigorous academic specific individual donors. research in preparation for a book that was to be In order to diversify its funding streams and written by Francis Moore Lappé. In the process of not be completely dependent on foundation researching international social justice move- grants, GBM strategically added a for-profit arm ments, the Lappés discovered several exciting to its activities—the Green Belt Safaris, which projects, including GBM, and began raising funds brings in revenue through cultural tourism. to support them. This brings us to the final note- A few key funders have contributed vital core worthy grantmaking strategy revealed in our dis- support to the organization. These donors make cussion with Anna Lappé. contributions to be used at the discretion of Though Small Planet Fund operates on mini- GBM management. We had the opportunity to mal resources and its future is uncertain, the speak with Anna Lappé, who co-manages the grants made to social justice nonprofits are Small Planet Fund with her mother, Francis intended to support a few well-researched Moore Lappé. Small Planet Fund makes core organizations for the long run. Lappé hopes that support grants via a donor-advised fund handled with additional fundraising, she will be able to by the Marion Institute. Anna Lappé, a grant- grow the group’s endowment. Lappé seems to

14 Winter 2005 Responsive Philanthropy be concerned not with fashionable funding but Terror Watch Lists continued from page 8 with making changes through sustained, reliable personal lives by advanced technology, econom- support. All donors interested in impacting ic and social change, and militarist adventurism social justice movements could learn a few les- abroad are tearing the heart out of our commu- sons from this small but well-executed grant- nal life and threatening our constitutional liber- making initiative. ties. As I end this article, I am unable to set aside my memories of the McCarthy period in order to Advancing Social Justice Research assure myself and my readers that the only thing Though NCRP usually concentrates its efforts we have to fear is fear itself, as the nation was on research and policy affecting the American able to reassure itself when hearing that call to nonprofit sector, a recent request from an NCRP action in FDR’s inaugural address. Perhaps fear partner and supporter of the Green Belt itself, when institutionalized by government and Movement inspired a case study of this social used as a building block for legislation, is a more and environmental justice organization abroad. formidable foe than even FDR imagined. NCRP is committed to studying domestic social justice movements and conducting research that Notes will educate the foundation world and greater 1. (I have quoted here from a position statement nonprofit community on the indispensable by the National Council of Nonprofit activities and subsequent needs of these organi- Associations.) zations. Nonprofit advocates for social justice 2. which as you know is a proclamation by a take on deep-seated systemic issues, incorporat- [Russian] emperor with the force of law . ing service delivery and negotiating public poli- 3. http://www.opm.gov/cfc/opmmem- cy in their work. Because advocacy is such a os/2004/2004-12.asp large component of their day-to-day operations, social justice groups require liberal core operat- Alan Rabinowitz is a trustee of the Peppercorn ing support to navigate between their policy and Foundation and sits on the board of directors of service delivery responsibilities. NCRP. He is the author of Social Justice Philanthropy in America, and more recently, Omolara Fatiregun is the senior research associ- Urban Economics and Land Use in America: ate for NCRP. Mira Gupta is a former research The Transformation of Cities in the Twentieth assistant for NCRP. Century.

501(c) (4) Organizations continued from page 10 sure, and foundation staffs’ discomfort or lack of in the policy process is a responsibility to expertise or experience with the mechanics of which foundations should give more serious advocacy. Given this reluctance to support thought and consideration. Providing techni- 501(c)(3) advocacy, it is not probable that foun- cal assistance that really matters—related to dations will help these groups establish advocacy, lobbying and political representa- 501(c)(4)s. But if foundation board and staff tion—is a good place to start. members want to use their grant dollars to elim- inate basic social and economic inequities, then Notes putting more resources into supporting advoca- 1. Organizations should consult attorneys for cy organizations and programs is critical. specific legal advice. 501(c)(4) organizations Based on the record amount of money that are governed by both FEC and IRS regulations people gave to candidates for public office in which can sometimes be competing and con- this past election—and the deep ideological fusing. Recently, the FEC has threatened to divide across the United States—this is clearly limit the activities of 501(c)(4)s in an effort to one of the most politically charged eras in the increase campaign finance regulation. nation’s history. The nearly 1 million charitable 2. The IRS defines “lobbying” as a specific activ- nonprofit organizations in the United States ity that ultimately involves urging lawmakers come into contact more frequently with peo- to take specific positions on specific pieces of ple and communities most in need than any legislation. See the IRS’s instructions for other type of institution. Giving them the Schedule A (Form 990 or 990-EZ) at capacity to maximize their voices at this time http://www.irs.gov/pub/irs-03/i990sa.pdf.

Jeff Krehely is deputy director of NCRP.

Responsive Philanthropy Winter 2005 15 NCRP Board of Directors

James Abernathy Louis Delgado Margaret Fung Nadia Moritz Environmental Support Center Philanthropy & Nonprofit Sector Asian American Legal Defense & The Young Women’s Project Program, Loyola University Education Fund Christine Ahn Chicago Terry Odendahl Women of Color David R. Jones Georgetown University Center Resource Center Mike Doyle Community Service Society for Public and Nonprofit Community Shares of Illinois (NCRP Board Vice Chair) Leadership and Public Policy Bruce Astrein Institute Arizona Community Foundation Pablo Eisenberg Rhoda Karpatkin (NCRP Board Chair) Georgetown University Public Consumers Union Gary Bass Policy Institute (NCRP Board Treasurer) Alan Rabinowitz OMB Watch Peppercorn Foundation Angelo Falcon Larry Kressley Paul S. Castro PRLDEF Institute for Puerto Public Welfare Foundation Russell Roybal Jewish Family Services of Rican Policy Gill Foundation Los Angeles Julianne Malveaux Richard Farias Last Word Productions Inc. Greg Truog Lana Cowell Tejano Center for Community Community Shares USA Greater Community Concerns Peter B. Manzo Shares of Cleveland Center for Nonprofit Helen Vinton (NCRP Board Secretary) Angel Fernandez-Chavero Management Southern Mutual Help Community Foundation for Association Greater New Haven William Merritt National Black United Fund Bill Watanabe Deborah Felder Little Tokyo Service Center Maine Initiatives

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