December 5, 2008 | Read Time: 1 minute
Jack Siegel has advice for donors during the economic downturn: let some nonprofit groups fail.
Cash-strapped charities are asking foundations and wealthy philanthropists for “bailouts,” Mr. Siegel, a nonprofit lawyer in Chicago, writes on his Charity Governance blog.
“We suspect the Gates Foundation already needs a new door-knocker, but it is not alone. In every community, large foundations, and wealthy people will be hearing from theatre groups, museums, and food banks about vital needs and services that require funding,” he says.
But Mr. Siegel implores donors to be judicious with their giving.
“Charities are no different than Lehman Brothers, the Big Three, and other for-profit entities looking for bailouts from the taxpayer,” he says. “Just as is it a mistake for the U.S. Treasury to bailout institutions without requiring fundamental change in business and governance practices, it also will be a mistake if wealthy individuals and foundations don’t condition charitable bailouts on improved business and governance practices. In some cases, philanthropists and foundations should let major institutions fail rather than fund bailouts.”
What do you think? How can donors help charities improve their operations during financial tough times? How should they choose which charities they allow to close? Click on the comments box below to add your thoughts.
