When Private Hands Do the Public’s Work

Giving form to his “compassionate conservatism” political slogan, Texas Gov. George W. Bush has proposed $8 billion in tax incentives to promote charitable giving among those who do not itemize their tax returns. The dollars would finance “little armies of compassion,” the religious and community organizations critical to Bush’s plans for confronting poverty and other social ills. Not to be outdone, Vice President Al Gore has advocated a “partnership” between government and faith-based organizations to solve persistent social problems that plague American communities.

Although Bush and Gore are sure to disagree on programmatic details, their substantial agreement is significant. Government has become so toxic politically that presidential candidates are reluctant to say a government program might be a good thing. Instead, the preferred approach is to delegate public-policy responsibilities to charities, religious organizations and community groups.

But this growing reliance on nonprofits as tools of public policy poses serious problems. First, allocation of scarce resources could ultimately become a sort of popularity contest--particularly when direct funding is replaced by tax relief--as charities vie for publicly underwritten donations. Then organizations doing work that is less appealing, less “crowd-pleasing” would inevitably have less resources. Second, “governmentalization” of private charities may undermine them, changing their focus, bureaucratizing their organizations and driving out volunteers. The potential costs of delegating social policy to charities are too high.

Charitable organizations play an important role in American society. Candidates have praised specific organizations, including Sharing and Caring Hands, which operates a shelter in Minneapolis, and Haven of Rest Ministries, which serves the homeless in Akron, Ohio. Well-known national charities like the Salvation Army and United Way provide a wide range of services across the country.

To presume that philanthropic organizations can take on an even greater share of the responsibility for combating poverty--even with additional financial resources supplied by the government--is foolish. Charities are cost-effective precisely because they rely on a labor force of volunteers and service-minded individuals willing to work for low pay. Even with additional money, it is not certain that nonprofits can dramatically increase their capacity. Volunteers and low-paid staff don’t grow on trees. Some social problems will not be addressed.

Thus a form of triage will still be required. This is an everyday reality of social policy. However, this decision is now made by democratically elected public officials. Relying on charitable organizations shifts this critical responsibility into private hands. Consider Bush’s proposed $8-billion tax relief for charitable contributions as a substitute for publicly financed activities. Assuming Americans are spurred by the tax benefits to make donations, the recipients of this largess are unknown. One could argue that this is democracy at its finest: individual citizens deciding where their money goes. On the other hand, social policy by plebiscite may leave critical needs unmet while popular charities prosper. For example, will donations go to museums or job training for the homeless? Who knows? All potential recipients are equal in the market for tax-deductible donations. There is no hierarchy of need, no guarantee that society’s most important causes will be funded. Indeed, no debate about what the most important causes are.

Distribution of public money by tax credit puts additional pressure on charities to market themselves to potential contributors. This consumes valuable resources and distracts charitable organizations from serving the needy, a problem already evident in charities that spend an inordinate sum on raising additional funds. Moreover, it turns the allocation of resources for social problems into a perverse popularity contest. Only the problems “favored” by a sufficient segment of the population will be addressed. The implications are obvious. Shelters to remove unsightly homeless from the streets may receive support but literacy programs that help people escape the cycle of poverty may suffer. The charity that secures Claudia Schiffer as spokesperson is more likely to succeed than the rival endorsed by Abe Vigoda. Is this any way to make public policy?

There are reasons we delegate policy decisions to policymakers. We would not determine the organization of our national defense by providing tax relief to individual Americans. Tanks, submarines or cavalry units? This choice is not left to the whim of donors because our national defense is considered too important to be determined in such a manner. The candidates’ willingness to let nonprofits carry out social policy is, in some sense, a sign of the political insignificance of homelessness, poverty, unemployment and similar social problems.

Meanwhile, Gore’s notion of expanded government reliance on faith-based or religious organizations raises its own thorny problems. Many such charities mix their philanthropic activities with a spiritual or explicitly denominational message. There is certainly nothing wrong with this approach. Indeed, for some recipients, the spiritual message may make the assistance more meaningful and effective. However, to base the receipt of public assistance on a willingness to accept religious instruction obviously breaches the separation of church and state. Gore assures the skeptical that this problem will be prevented, but difficulties have already emerged. Haven of Rest Ministries, for example, was accused of rejecting potential board members who were not born-again Christians.

Faith-based organizations may also miss needy recipients who do not share their religious beliefs. For example, mosque-based medical clinics may not be well-known to non-Islamic potential recipients. Similarly, people not affiliated with a particular church may be too intimidated to seek out services from an organization associated with it. And some charities may be guided by religious beliefs in screening recipients--turning away, say, unwed mothers.

The inevitable “solutions” to such problems pose great risks to the faith-based charities. By taking federal funds, nonprofit organizations will open themselves up to increased oversight and bureaucracy. Government will inevitably conduct reviews and inspections. Moreover, there will be a host of forms, documentation and administrative burdens that will consume time and patience. Faith-based charities may be forced to eliminate religious aspects of their programs that draw volunteers, and so make the added money self-defeating. In addition, volunteers may not be interested in working alongside paid employees, and lose interest. Many charities have already concluded it’s not worth it.

Charities provide an important supplement to public programs. However, there is little evidence that they have the capacity to become the primary instrument to address poverty, homelessness, substance abuse, unemployment and other persistent social ills. Though Gore has advocated a partnership between government and faith-based service organizations, Bush has stated he would “look first to faith-based organizations, charities and community organizations” to help people in need. This would be a serious mistake.

In the early 19th century, Alexis de Tocqueville observed that Americans’ willingness to support philanthropies with time, labor and money is a distinguishing characteristic of the United States. Happily, this trait has survived multiple generations. But viewing civic organizations as a substitute for well-conceived public programs threatens the character and effectiveness of charities. Though rhetorically pleasing today, ceding popular control of social policy to overburdened nonprofits represents not progress but a step in the wrong direction.