Reagan and His Legacy Harmed, Not Helped, Philanthropy

To the Editor:

Leslie Lenkowsky’s opinion piece in the June 24 issue (“Reagan’s Policies Bolstered Philanthropy Despite Protests From Nonprofit Officials”) grossly strains logic and misinterprets facts, like an arts patron describing a piece in such a way that even the artist does not recognize it. Mr. Lenkowsky claims that Reagan’s policies “have helped philanthropy far more than harmed it.”

The Reagan administration strove to limit, if not dismantle, the federal government. It shifted federal responsibilities to state and local governments — and charities — without providing the resources to handle the tasks, undermined regulatory protections, and launched a shrill, if not mean-spirited, attack on services to low-income families across America. Its attacks helped galvanize and organize the nonprofit sector, so perhaps we should be thankful for that. But to argue that Reagan’s policies helped nonprofits — that’s quite a stretch.

Mr. Lenkowsky seems to think the issue is about “government spending on some programs that benefited nonprofit groups.” He argues that nonprofits should be grateful that “government payments continued [over the last 20 years] to account for roughly one-third of nonprofit revenue.” But this misses the point.

The reason organizations like OMB Watch — which, as Mr. Lenkowsky notes, was formed in response to actions taken by the Reagan administration — care about federal funding has less to do with how much money nonprofits get and more to do with ensuring that the government spends money on the right things, such as building a stronger, more vibrant America; helping those in need; and ensuring a clean environment, along with fairness and justice for all. Nonprofit organizations fought the proposed budget cuts, program terminations, and block grants — which eliminated federal program standards — because they set the wrong national priorities. Unfortunately, nonprofits have been on the defensive ever since.

When the Reagan administration proposed draconian cuts in housing programs or massive federalism shifts that would have transferred entitlement programs to states, shrank programs that addressed poverty, promoted free-market regulatory systems in behalf of corporate interests, or advocated a trickle-down economic theory that unfairly benefited the wealthy, it was really an attack on the role of government. The debate about how to make government more efficient in a robust civil society became one about how to cut government out of the equation altogether. The implications for philanthropy were profound.

Mr. Lenkowsky’s advice to “let philanthropy be philanthropy” and get government out of the way ignores that central debate over how much responsibility government should take for its citizens and forces private philanthropy into roles previously played by the government. Thus, rather than getting government out of philanthropy, one might say Reagan’s policies forced philanthropy to get into government. Not only that, but nonprofits were being asked to do so with fewer or no government resources. Nonprofits have heard the same misguided message for 20 years: Do more with less. And we all know that ultimately doing more with less means doing everything with nothing.

Just as these important public-policy issues were emerging, the Reagan administration attacked the advocacy voice of nonprofits, chilling policy participation. This “defund the left” agenda, first propagated by the Heritage Foundation in its 1981 Mandate for Leadership and implemented in part by the Reagan administration, became a long-term aim of conservatives. The objective was to keep groups that receive federal funds from engaging in any type of advocacy — even if paid for with nonfederal funds.

Nonprofits, especially those involved in the delivery of government programs, are among the best informed on how to strengthen performance, set new directions for federal programs, and identify persistent gaps in services. Their advocacy makes government programs more efficient, effective, and responsive. But the attacks on nonprofit advocacy, started in the Reagan administration, have left a lasting chill that must be thawed.

Gary D. Bass
Executive Director
OMB Watch
Washington

To the Editor:

Leslie Lenkowsky’s article follows the understandable tradition of valorizing the deceased, but presents a warped depiction of the impact of the Reagan presidency on philanthropy. According to Mr. Lenkowsky, “20 years later, [Reagan’s] policies turned out to have helped philanthropy far more than harmed it.”

What does “helped philanthropy” mean in this context?

If the goal of philanthropy and associated tax breaks is improving the public good, the outcome might be helping people in every walk of life, as well as the nonprofit institutions that serve them. Yet Reagan spearheaded the drastic cutbacks in federal funding that have resulted in the loss of a safety net and the defunding of nonprofit agencies serving the neediest. Although nonprofit organizations are extremely diverse, today they may be characterized by the concentration of financial resources among a small number of the most elite institutions.

In the 1980s, nonprofit organizations serving the poor suffered the worst federal budget cuts and the added detrimental effect of an increasing dependence on fees for services.

President Reagan’s legacy firmly established smaller government, huge tax breaks for the wealthy, and increasing inequality between the rich and the poor, with the middle class assuming the brunt of the tax burden. Since the advent of the Reagan administration, more “initiative” — translated “power” — has been given to the “private sector” — that is, the wealthy and the corporations they control. As I predicted in 1990 in Charity Begins at Home: Generosity and Self-Interest Among the Philanthropic Elite, inequality has become even more pronounced as the federal government has continued to move away from financing basic human services. It is well-established that the private sector cannot and will not have the means to “pick up the slack.”

In his final State of the Union Address in 1988, President Reagan, like Mr. Lenkowsky, erroneously claimed that his tenure had witnessed “a revolution of compassion that led to private-sector initiatives and a 77-percent increase in charitable giving.”

In 1987, however, the increase in charitable donations was the smallest it had been in 12 years, owing partly to a change in the rules concerning deductibility of appreciated property, and partly to the elimination of the charitable deduction during the Reagan administration for the majority of taxpayers with modest incomes who do not itemize.

The ideology of small government, more private-sector initiatives, and charity go hand in hand. When George H.W. Bush was running for office, he echoed this rhetoric by speaking metaphorically of “a thousand points of light.” The current Bush administration has perpetuated Reagan policy with a slight adjustment to favoring so-called faith-based initiatives. What Mr. Lenkowsky, Reagan, and both President Bushes have failed to acknowledge is that elite institutions receive the vast majority of funding. These are the philanthropic recipients that have benefited from the Reagan policies to which Mr. Lenkowsky is referring.

At its best, philanthropy provides a check against corporate or government domination or indifference. Individual nonprofit groups can be important players in a kind of balance of power.

Finally, Mr. Lenkowsky’s assertion that environmental groups “became as influential as corporate lobbyists” is laughable. Just look to the current administration’s assault on public lands for oil and gas development. President Reagan’s impact has lasted much longer than his eight years in office and the nonprofit sector continues to suffer as a result.

Teresa Odendahl
Waldemar A. Nielsen Chair in Philanthropy
Georgetown University
Board Chair
National Committee for Responsive Philanthropy
Washington