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It's Time for Charities to Get More Benefit From the Donation Buck

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IN this traditional season of charitable giving, it's worth pondering where philanthropy in America should be heading.

This, after all, is the year when Washington told the private sector it should be ready to bear more of the load the federal government has shouldered.

It is also the year in which several highly visible cases raised public doubt about charity stewardship. William Aramony was indicted and sentenced for abusing the public's trust, and the United Way, symbol of amalgamated charity, has been rebuilt.

The Foundation for New Era Philanthropy in Radnor, Pa., which promised to double the money of a number of credulous nonprofit organizations, fraudulently collected hundreds of millions of dollars. And the nation's biggest nonprofit, the American Association of Retired Persons, has been attacked for lobbying and engaging in for-profit businesses.

Charity has lost some of its sanctity at the same time the number of Americans living in poverty - now 32.5 million - is growing.

More than 15 million of these are children under the age of 18; 5 million are under age 6. The further dreadful irony is that the average citizen contributes 3 percent of annual income, a percentage that is falling.

The public is left to ponder the specter of charities that have fallen from grace against the backdrop of the grand American tradition of philanthropy represented so well by such venerable institutions as CARE and the Red Cross, and by a host of local voluntary organizations.

It's time to create a new "midsector" of philanthropy - midway between the government (federal, state, and local) and corporate sectors - that acknowledges the following:

*The economic force - the business - that charities have become.

*The crucial role they play in meeting human needs in an era of shrinking public resources.

*The responsibility they have to fiercely maintain high productivity and unassailable integrity.

The midsector is closer to the problems, closer to the people who care about the problems, closer to the people who benefit from the programs, and more immediately concerned with the impact and efficiency of those programs. The midsector leverages public funds with private money, and at its best, applies private-sector standards to cost/benefit ratios and funds management, and is accountable to those whose voluntary support keeps it alive.

The challenge to those of us in the midsector is as clear as it is pressing.

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