TOWARD A MORE Generous Nation

The “thousand points of light” invoked by Vice President George Bush during the 1988 campaign seemed to suggest an alternative to the heavy hand of government in meeting social needs--a multitude of charitable organizations and partnerships among nonprofits, businesses and the public sector.

There is something beguiling about the image of bright sources of energy, commitment and compassion scattered throughout our social landscape. Most Americans probably share President-elect Bush’s enthusiasm for the idea of pluralistic voluntary service, fueled by altruistic contributions, as a way of helping our neighbors. We like the values of freedom, charity and decentralized power it represents. And we like the fact that it works, a symbol of the generous, can-do American spirit.

But does the so-called third sector--neither wholly public nor wholly private, a combination of government and business interests--truly hold promise for solving our serious social problems? The answer is complex. It may be yes, but only at the expense of giving up the special quality that has made it an independent force in American society.

Rising expectations and reduced governmental support have created great pressures, both outside and inside the nonprofit world. In recent years, charitable organizations have been asked to do many things beyond their original missions: to replace reductions in governmental funding of human services; to support themselves by becoming more business-like and market-oriented; to help corporate promotion through “cause-related” marketing; to serve a social function by sponsoring gala events for the socially-prominent, and to carry out specific agendas of foundations.

The external forces have led to greater internal pressures for generating ever-increasing financial support and serving those who provide it: development of more sophisticated fund-raising plans; use of telemarketing and other aggressive (often intrusive) marketing techniques; populating boards of directors with well-healed potential contributors, virtually selling prime seats and other perquisites to the highest donor-bidders, and sponsoring an endless series of fund-raising dinner extravaganzas.

The result threatens to transform the essential character of the charitable sector. It has become in part a form of big business, increasingly driven by the need to expand its revenue base. The annual flow of funds has reached billions of dollars--$92.5 billion in 1987. This is not some marginal activity fueled by cookie sales and bingo nights. It is a large-scale enterprise including hospitals, churches, universities, United Ways, housing projects and symphony orchestras as well as public television, libraries and foundations.

The scale and sophistication of this enterprise leads to what appear to be lavish levels of support in some instances--over $28 million spent on fund-raising expenses alone for the Statue of Liberty restoration project in 1985-86, $100,000 minimum corporate contributions originally sought for the coming presidential inauguration, multibillion-dollar thrift store enterprises that pay nonprofit organizations a small percentage for the use of the charitable name.

There is another side to the charitable field, the traditional side where giving and volunteering by individuals is primary. A recent study by Independent Sector, a coalition of nonprofit charitable organizations, demonstrates that individuals still are the largest supporting source (about 90%) of all funds contributed and that low and moderate-income individuals are the most significant group within this category. The lowest income group (under $10,000) actually gave the highest percentage of their incomes (2.8%) to charity. By contrast, those with average incomes of $75,000-$100,000, gave only 1.7%. About 20 million people gave as much as 5%, a standard that Independent Sector has set as the giving goal for everyone.

Equally impressive is the record of volunteerism by Americans. About 45% percent of all adults volunteered an average of 4.7 hours per week in 1987--for activities ranging from working with AIDS patients to planting trees to serving as museum docents to reading to children in hospitals. About 12% gave more than five hours per week. In all, 80 million people donated 19.5 billion hours to chosen causes.

There is a paradox here. A majority of Americans gives time and money to 500,000 nonprofit organizations for the pursuit of worthy causes. The organizations are seen to provide the Bush alternative--those points of light--to either government or commercial enterprise. But these same organizations are under increasing pressure to become quasi-governmental agencies (to fill the void left by the cuts) and to become quasi-businesses seeking to increase income using commercial methods.

Each year, as the pressures increase on Congress and the Administration to search for new revenue sources other than taxes, they are tempted to look to charitable tax deductions as a potentially lucrative source. The 1986 tax reforms have already removed the tax deductions for charity by taxpayers who do not itemize, and they substantially restricted the appreciated property deduction, further reducing nonprofit income. Congress is considering an increase in taxes on the business activities of nonprofits, as a way of both generating revenue and responding to complaints by business about competition with commercial enterprise.

Congress and the Administration should resist these temptations if they want to maintain a semblance of an independent charitable sector. It is short-sighted policy to dump vital human services onto the nonprofit sector in order to avoid raising taxes. A rational approach would take care of basic human needs through public services and leave the charitable sphere with that realm of altruism, social advancement and experimentation that fits its voluntary character. Neither displacement of governmental services nor mandated charity should become a part of public policy.

Otherwise, the third sector will become to the charitable impulse what big-time college sports have become to amateur athletics. A spirit vitally important to our society is becoming submerged in the struggle for economic viability. There would be little comfort in retaining a charitable sector that had lost its soul in the fight for survival.

DR, NANCY OHANIAN / for The Times