August 14, 2012

Now the Presidential Race Is About Nonprofit Issues

Chris Maddaloni/CQ Roll Call/Newscom

Presidential candidate Mitt Romney and Rep. Paul Ryan at a rally in Manassas, Va.

With his selection of Rep. Paul Ryan as a running mate, Mitt Romney changed the stakes of the 2012 presidential campaigns. The key question in the race is now of direct and central concern to nonprofits: Who takes responsibility for the common good?

As the debate about the role of government unfolds, charities, foundations, and the people they serve cannot afford to remain quiet. While nonprofits are legally required to stay out of the partisan fray, they are allowed and even encouraged to talk freely about public policies and values.

In particular, nonprofit leaders will want to help people understand the implications of the budget plan Mr. Ryan crafted and persuaded the House to pass. This measure especially hurts low- and moderate-income people, but ultimately it affects each and every area of government support for charitable causes. By 2050, according to estimates by the nonpartisan and widely respected Congressional Budget Office, the Ryan plan would leave no money for most of the federal government beyond Social Security, health care, and defense.

The stakes for nonprofits and foundations are huge. Charities depend on government for about a third of their annual revenue. Foundations can’t make up for those missing dollars; they would have to increase grant-making more than tenfold to compensate for Republicans’ actions. And giving from individuals, especially from people who feel hard-pressed by their own economic circumstances, isn’t going to replace a government that withdraws from most of its long-recognized responsibilities.

Here’s a primer on the key ideas that affect nonprofits and the people they serve under the Ryan plan:

A new burden for the health and welfare of the nation’s most vulnerable.

First comes an assault on Medicare, a critically important program to the elderly and the nonprofits that serve them.

The Ryan budget calls for this government program eventually to be changed into a voucher-style subsidy for people to buy medical insurance in the private market. The typical Medicare beneficiary would face an additional $6,400 in annual costs by 2022, according to the Congressional Budget Office (although Mr. Ryan has tweaked his plan since that analysis to bring the cost down).

What’s more, the plan moves the age for eligibility from 65 to 67, creating a two-year gap when people would not have access either to Medicare or to the Affordable Care Act’s health-insurance exchanges. What do these changes portend for already overstretched charities and foundations caring for this ever-growing population of older Americans?

More than 60 percent of Ryan’s budget cutting—at least $3.3 trillion—comes from spending on government and nonprofit programs that serve the poor and people who are falling out of the middle class as the sluggish recovery continues.

The Ryan plan shreds healthcare coverage and other parts of the safety net for poor people of all ages. Some $2.4-trillion would be sliced from government programs that pay for health care for low- and moderate-income people. Cuts in food stamps account for $134-billion more, denying assistance to 8 million to 10 million needy Americans.

Other cuts in programs that provide education, training, employment, and social services to the poor would total more than $750-billion. Think what it means, for instance, to gut the Pell Grant program and deny more than a million low- and moderate-income students the tuition help they require when higher education is supposed to be the route to economic self-sufficiency. What are nonprofits and foundations supposed to do to make up for this retreat by government?

Challenge for everything not related to the nation’s defense.

Beyond Medicare and safety-net programs, the Ryan budget wreaks havoc in most other areas of concern to charities and the causes they care about.

Spending on programs that involve agriculture and food safety, the environment, education, highways and transportation, medical and scientific research, and much more are on the chopping block, as are veterans’ programs, national parks, border patrol, law enforcement, and programs in every area of government except for spending on defense.

Little deficit cutting and lots of tax cuts for the rich.

It’d be one thing to cut spending and close the budget gap, but the Ryan plan doesn’t do that for a long time. As a matter of fact, it will actually increase the deficit by $3.1-trillion between now and 2022, according to the House Budget Committee’s projections.

The Congressional Budget office says that the Ryan plan wouldn’t balance the federal budget until about 2040.

Even more difficult to absorb is the fact that Mr. Ryan’s plan, like Mr. Romney’s own proposals, would cause so many problems for poor and moderate-income families and the charities that serve them while giving the wealthiest Americans a tax cut.

The Ryan budget would cut tax revenue by $4-trillion over its first 10 years and even more beyond then. These breaks would give people who earn $1-million a year or more an additional $265,000 annually on top of the $129,000 Republicans want to save each of them by continuing all of the tax cuts approved under President Bush. This parallels Mr. Romney’s own proposals, which would cut taxes for the wealthiest 5 percent while increasing them for 95 percent of Americans.  

The Ryan budget isn’t something that liberals alone are concerned about. Newt Gingrich labeled Ryan’s work “right-wing social engineering” and said that he didn’t think that “imposing radical change from the right or the left is a very good way for a free society to operate.”

Nonprofit leaders must make that point and speak out forcefully about the critical role government plays in advancing the mission of all their organizations across the full range of charitable concerns.

While charity officials fear controversy, and worry especially about upsetting their wealthy supporters, polling data show that many Americans support spending on government programs for the poor and needy and the idea that rich people should pay a fair share of taxes.

By presenting the facts about the Ryan budget to their participants and supporters, nonprofit leaders can prompt a discussion about shared American values and rally more people to the idea that the federal government can’t just back away from helping the poor and middle class, saving the environment, and protecting all of us.  

No matter what their missions, charities and foundations must also invest in voter registration, voter education, and get-out-the-vote campaigns. They must encourage volunteers, staff members, clients, and others to demonstrate at the ballot box how they feel about the role of government and its importance in their lives.

In 2012, Americans will do more than pick a president, vice president, and legislative officials. They will determine whether we honor and share responsibility for one another and for our planet.

Mark Rosenman, a scholar and activist, directs Caring to Change, a project to improve how foundations serve the public.He is also an emeritus professor at Union Institute and University.