As nonprofits contemplate what the election of Donald Trump means, many leaders are already playing defense — trying to protect the largest portion of the charitable deduction as is possible in the current climate and protecting against massive government cutbacks by the new ultraconservative government.
But I’d offer a different piece of advice. Let’s go on offense.
Even as we look nervously to the transition of an unprecedented kind of president and a potentially difficult administration, let us start a national discussion on nonprofit policy and lead a resurgence in respect, engagement, and resources toward the causes that Americans support with billions of charitable dollars each year.
No American president has ever treated U.S. nonprofits as a single major sphere. But it’s time for that to change, so let’s challenge President Trump to do so. And if he fails to work with nonprofits fairly, let’s use everything we have (within the boundaries of the tax code) to resist.
The stakes are so high.
The nonprofit world is huge. It has been growing and taking on ever more of the burden of providing an American social safety net, especially in areas where government has either pulled back or proven ineffective. Nonprofits took in more than $938 billion and contributed more than 5 percent of GDP, the Urban Institute reports.
The incoming president has philanthropy pondering the big changes that lie ahead in the new administration and what they mean for fundraising, tax policy, spending, immigration, regulation, advocacy efforts, and more.
Nonprofits are also a major source of U.S. employment. They account for 11.4 million jobs nationally (according to the Bureau of Labor Statistics), and 10.3 percent of all private employment nationwide. So that means 1 in 10 people who don’t work for government agencies work for a nonprofit. And that number has been growing: In 2007, nonprofit employment was 9.2 percent, up almost 900,000 jobs. Supporting nonprofits means supporting job growth.
Nonprofits’ Roles
Among the steps nonprofits, the administration, and the public should taker:
Define what we want nonprofits to be and how they should operate. While government is happy to collaborate with nonprofits, including those working in human services, education, and health care, there is little national cheerleading for the hundreds of millions of donors who give every year.
Mr. Trump will take office at a time when nonprofits find themselves under attack, especially in the context of our hyperpartisan national politics. From Planned Parenthood to Black Lives Matter, we’ve seen the effects of these attacks on organizations both large and small. We are also challenged by the effects of dark-money alliances that use lax nonprofit regulation and enforcement to skirt legal intent. This demands a national discussion about what being a nonprofit means, including the distinctions among charities, religious groups, and nonprofits engaged in lobbying and political action.
So, too, does the rise of donor-advised funds, which may democratize and broaden charitable giving recognized by the tax code while at the same time tying up vast quantities of philanthropic capital. I’m sure no policy maker ever consciously envisioned the day when Fidelity Charitable Gift Fund — essentially a financial vehicle — would be the nation’s largest charity.
Build trust and transparency. We must also recognize the looming crisis of trust between the public and American nonprofits over the issue of transparency and accountability. The election season that just passed and the political haggling over what constitutes legitimate philanthropy put the idea of transparency — and the clear contrast between the charitable work of the two candidates — squarely in the spotlight. The IRS lacks real review and enforcement ability, and while beefing up that oversight would not be popular with most nonprofits, it may well be needed.
The privilege of leading and working at a private enterprise in America that doesn’t pay taxes cannot be taken lightly. However, it’s also true that nonprofits are not required to report as much data as some transparency experts advocate. Given the combination, it’s time for a review of how tax-exempt organizations report expenses, income, and social impact.
Focus on the global role nonprofits play. As we examine the election, it’s also important to focus on the vital role nonprofits play in defending our national security and global relations. Outside of the U.S. military and our State Department network, no one does as much internationally to advance American interests and reputation as U.S. development organizations. While these organizations felt they had a strong advocate under President Obama, an incoming President Trump should demonstrate his commitment.
A Unified Voice
In many of the issues of the national campaign — health care, the environment, economic development, the rights of women and girls, immigration, civil rights and fairness for minorities, the fight against addiction — nonprofits are leading the way to advance social justice and economic fairness and can continue to be strong partners to government agencies.
Yet nonprofits remain decentralized, and no one speaks for the entire sector. We now have a rare opportunity for a new president to bring together nonprofits in a bipartisan manner for the common good. Mr. Trump could, for example, focus the energies of key executive-branch agencies like Education, Commerce, Energy, Interior, Labor, and Health and Human Services to include nonprofits at the policy table.
Under President Obama, the Office of Social Innovation and Civic Participation did important work in supporting new approaches to technology and social ventures. More support and leadership are needed to extend that success and ensure that our social innovators are encouraged by the Trump administration with the tools and resources they need to continue the kind of work that changes how we think about civil society.
Perhaps just as important as these government actions, a billionaire president can and should encourage more giving.
As a wealthy man, Mr. Trump should publicly commit to the Giving Pledge, earmarking half of his fortune to charity in his lifetime. American philanthropy has been “stuck” at around 2 percent of GDP since 1970. While that is good news during national economic recessions, it’s wrong that we never manage to increase the share during stronger economic times. A national push to increase giving — March of Dimes-style, perhaps led by one of the great television pitchmen ever — can have real impact on the lives of actual people, especially at the local level where human-service organizations, soup kitchens, shelters, and charities that aid women and children struggle to make their budgets year after year. It shouldn’t be that way.
Right now, the nonprofit world is alternating between cowering and waiting fearfully. Enough of that. Let’s take an agenda to the Trump White House. Let’s make him respond. It’s part of our duty to those we serve.
Tom Watson is president of CauseWired, a consulting firm that advises nonprofits. He is a regular columnist for The Chronicle of Philanthropy.
