As Independent Sector, the coalition of foundations and nonprofits, seeks its next president, the search naturally focuses on the skills and experience that candidates have to offer for this important position: Has he or she been a successful advocate? Does this potential new president have strong business skills that would enable him or her to be an effective, strategic manager? Is the candidate a great communicator?
Though professional qualifications are an important consideration in selecting a new president of Independent Sector, a review of recent history suggests that more than just talented leadership is required to advance the interests of the nonprofit world.
It’s unfortunate that although smart, skilled leaders have been in place at Independent Sector, the Council on Foundations, the National Council of Nonprofits, and other organizations that represent charities and foundations, their advocacy results have not been strong. Too few ideas that benefit all kinds of charitable organizations and the people they serve have made it through Congress.
Perhaps the greatest success of Independent Sector and its allies in recent years was their ability to neutralize the attacks on nonprofits and foundations by Sen. Charles Grassley, a Republican of Iowa, a decade ago. Besides playing successful defense, nonprofit advocates have been able to secure only rather-modest policy victories, such as the establishment of the IRA tax rollover in the Pension Protection Act of 2006 and its conversion to permanent status last month.
We can do better. Here’s what it takes:
Increase resources devoted to advocacy on behalf of all nonprofits.
The 1.1 million charitable organizations in the United States currently underinvest in advocacy that would improve their collective interests. This occurs because of the ability of individual nonprofits to take a "free ride" on advocacy efforts supported by others. Independent Sector and other membership groups struggle to persuade nonprofits to pay membership dues to support advocacy because charities can enjoy the benefits of this advocacy whether they pay their dues or not. As a result, the nation’s leading nonprofit advocates have too little money and too few staff members to pursue their task well.
Foundations and large nonprofits offset some of the free-riding by small and medium-size groups by paying more than their fair share of the costs of advocacy. But foundations may need to do even more. And individual nonprofits need additional encouragement to understand the stake they have in broad issues affecting the nonprofit world and to pay their membership dues and join associations, like Independent Sector and the National Council of Nonprofits, that advocate on their behalf.
Make sure the public understands the value nonprofits add to society.
While federal policy makers recognize the important role of some well-known nonprofits, such as the Red Cross, Salvation Army, and United Way Worldwide, they do not have a deep understanding of the nonprofit world. Policy makers and Americans generally are drawn to corporate America and the operation of the free market because of their ability to help people get ahead, their wealth-creating capacity, their efficiency, and their respect for freedom of choice. However, there is not a similarly compelling and universally-agreed-upon rationale for why nonprofits exist.
While most Americans admire nonprofit "do-gooders," they also have nagging doubts about nonprofits’ efficiency, effectiveness, and ethics. More generally, it is not entirely clear to many what value nonprofits add to society that is not also provided by business or government.
Also contributing to nonprofits’ lack of visibility and clout is their relatively modest size. Together they represent roughly 5 to 10 percent of the nation’s economy, compared with the 75 percent that businesses account for. While the disappearance of charitable organizations might, in fact, be very disruptive to many Americans, the nonprofit world is not seen as "too big to fail" in the way we saw banks and the auto industry during the Great Recession.
This is why it’s important to educate policy makers and the public about the important role nonprofits play in our society. Admittedly, marketing the nonprofit world is challenging and could require a long-term effort, but the benefits would be worthwhile. For example, more than one nonprofit leader has suggested running public-service advertisements about a "day without nonprofits," when viewers might be asked to imagine the tragic consequences if all nonprofits were to close their doors.
Better connect the national to the local.
Members of Congress also overlook broad nonprofit interests because they don’t hear much about them from the people in their districts.
Local nonprofit leaders don’t speak up to their national representatives because many of the local leaders don’t fully understand the stake they have in decisions made in Washington. Many community nonprofits receive significant funding from state and local governments to deliver services. However, too many local nonprofit executives fail to recognize that much of this funding originates with the federal government and that lower levels of government are largely passing through federal dollars.
Moreover, local nonprofit leaders who could be helpful in contacting their Washington representatives seem only weakly connected to national organizations. For example, Independent Sector’s members are mostly national organizations, like Catholic Charities and the YMCA, and the organization has only modest, direct contact with local nonprofit leaders. To reach and motivate community leaders to call on members of Congress, Independent Sector must therefore work indirectly through its national members that have local affiliates.
On the other hand, the National Council of Nonprofits has state and regional affiliates that can assist in advocacy. But the National Council of Nonprofits’ Washington office and many of its member state associations are relatively small, sometimes fragile operations that have limited capacity to undertake significant lobbying campaigns, even though the network has many skilled advocates and recently helped persuade the U.S. Office of Management and Budget to require government agencies to pay nonprofits at least 10 percent overhead in government contracts that include federal funds.
Nonprofit advocacy would be strengthened by better connecting local leaders, who can call on their Washington representatives, to national lobbying efforts for policies that benefit the entire charitable world. In a related matter, now is also the time to consider a closer alliance — or even merger — of Independent Sector and the National Council of Nonprofits.
Focus on specific causes, not just those with broad implications.
Individual nonprofits typically see themselves first as part of a particular cause — in areas such as arts support, youth programs, health improvement, higher education, or environmental protection — and only a distant second as belonging to the nonprofit sector as a whole.
Many national associations represent the interests of these groups, often very successfully, such as the college groups that lobby for student aid. That’s where most local nonprofits send their membership dues first, largely because they can see a direct payoff from such associations.
Groups that work to advance broad nonprofit interests, such as Independent Sector, have generally been leery of also advocating for causes that benefit just one type of nonprofit. However, they might get more support from nonprofits if they were seen weighing in on specific causes, such as affordable housing, youth development, or mental-health services.
National nonprofit umbrella groups should also look for new ways to bring advocates for specific causes together. For example, while education or arts or health advocates will have their own concerns to advance in federal budget politics, they could also be part of an expansive nonprofit coalition that lobbies to promote a broad "nonprofit" — or social — budget with more funding for programs of interest to a wide array of causes. While there is an overall "defense budget" that draws the attention of diverse defense lobbyists, there is currently no similar "nonprofit budget" that advocates unite to lobby for. Packaging legislative ideas this way might provide the spark that unites the nonprofit world to push for change that matters.
Ease restrictions on nonprofit lobbying and electoral activity.
The advancement of broad, nonprofit interests in the policy process is handicapped by legal limits on nonprofits’ lobbying and partisan political activities. According to section 501(c)(3) of the tax code, nonprofits cannot spend a substantial portion of their budgets on lobbying — defined as contact with legislators around specific legislation — and cannot endorse or support, financially or otherwise, one political candidate over another. As a result, nonprofit advocates operate in the policy process essentially with one hand — or even two — tied behind their backs.
A related handicap is that voters who care about nonprofit issues do not make up an identifiable bloc that would attract support from politicians seeking election. That is, there is no obvious reward of more votes for candidates who pledge to support nonprofit interests.
Easing the restrictions on lobbying and electioneering would allow nonprofits to give stronger voice to their interests. It would also help if foundations were allowed to directly support nonprofit lobbying, which they are currently prohibited from doing. There are drawbacks to these ideas, but as long as money plays such a big role in politics, it’s important to reconsider the ground rules for nonprofits.
All of the ideas suggested here will take time and money to pay off. But the issues nonprofits are tackling are so important to society that the time to start is now.
Alan J. Abramson directs the Center for Nonprofit Management, Philanthropy, and Policy at George Mason University, where he is also a professor. This piece is adapted from a longer article scheduled to appear in Nonprofit Policy Forum, an academic journal.