Economic & Domestic Policy

Giving is personal. Make it political.

By Ezra Klein
Sunday, November 21, 2010

I come not to praise charity. I come to politicize it. Or at least make it more aware of the political world around it.

In 2009, charitable donations fell by 11 percent. It was the biggest single-year drop in more than two decades. And it came during a horrifying recession, when the need for food banks and homeless shelters and social services was more acute than it had been in generations.

That's the problem with charity - at least some of it: It's pro-cyclical. In good times, when people are flush, donations flood in. In bad times, they dry up. That isn't an argument against donating to charity, of course. If anything, it's an argument for increasing donations during recessions. But it's a reason to be realistic about the limits of private philanthropy as a stand-in for a stronger safety net.

We're not always so realistic about it, unfortunately. For understandable reasons, nonprofit groups are held in high regard, and the federal government in fairly low regard. But that difference in perception can lead us to overstate the effectiveness of one and understate the necessity of the other.

The Center on Philanthropy's survey of high-net-worth households found that 42 percent lacked confidence in the government to solve "domestic or global" problems but that only 5.5 percent lacked confidence in the ability of nonprofits to do the same. But that's backward: Blunt and inefficient as the government is, it has the resources and scale to solve global and domestic problems. Nonprofit groups, by contrast, ameliorate them in the absence of a more permanent solution. In the 1920s, many seniors relied on charity to get by. But it wasn't until we passed Social Security that those seniors found real security.

But that's a tough pill for the anti-government types to swallow. Asked during the health-care reform battle about a woman with fast-growing tumors and no health-care insurance, Rep. Eric Cantor (R-Va.) said that "there are hospitals here who do provide charity care if there's an instance of indigency and the individual is not eligible for existing programs."

Cantor, who will be majority leader of the House come January, intends to lead the effort to repeal the 2010 health-care reform legislation. The GOP's health-care alternative wouldn't provide substantially more people with coverage than the status quo does, so charity might really be their last hope. But what happens when the next recession comes? According to the Center on Philanthropy, high-net-worth households donated 34 percent less to health-related nonprofits in 2009 than they did in 2007. That'll mean tougher sledding for people without insurance.

The fact that government has a necessary role doesn't mean charities don't. But given what government can do - and what charities can't do - it's unwise to just leave the heavy lifting to philanthropies and hope for the best. Rather, if we believe the nonprofits have the smarts and incentives that governments need, the answer is, at least in part, to make government a bit more like those nonprofits.

Too often, people think of the work of charities as at odds with, or simply separate from the work of government. Consider, however, the politically engaged nonprofits that dot not just Washington but also many state capitols and international cities. These are charities that are in the business of making government work better.

At their best, they act as force multipliers. If you donate money to a food bank, it can provide only as much food as your money can buy. If you donate it to a nonprofit that specializes in food policy issues, it can persuade legislators to pass a new program - or reform an existing one - that can do much more than any single food bank.

For all the effort that goes into ranking and rating charities, it's much harder to know which nonprofit groups are truly effective. Some months ago, faced with my own philanthropic dilemma, I began informally polling friends, sources and readers to get a sense of which organizations carry weight in both foreign- and domestic-policy negotiations.

On domestic policy, the name that kept coming up was the Center on Budget and Policy Priorities. It leans left, but people on both sides admire its empirical rigor, focus on policy and fierce advocacy. It is widely acknowledged as having a voice in both the White House and Congress.

On international policy, two names came up with roughly equal frequency: The Center for Global Development and Oxfam International. Oxfam is a large organization (actually, a confederation of 14 smaller organizations) with a ground presence in 99 countries. People who work in international affairs say Oxfam is uncommonly sophisticated and respected in policy discussions. CGD is a smaller, more policy-focused outlet, but one with an outsize influence among decision-makers.

There are many others, of course, addressing all manner of issues from all points on the political spectrum. The Cato Institute is Washington's leading advocate for a smaller government; the New America Foundation, with its "radical centrism," prizes unconventional policy thinking and is perhaps the best at identifying and supporting innovative new voices; and the Center for American Progress has married rigorous policy analysis to a swift and effective political communications shop.

And you're not limited to think tanks. Small policy magazines and journals are often much more influential than their sizes would suggest, and they tend to run on donations, as do such good-government watchdogs as the Sunlight Foundation and the Center for Public Integrity. There are groups dedicated to reforming policy to make it easier for entrepreneurs to start businesses, and anyone who's spent much time dealing with the D.C. bureaucracy knows that we could use a few more of them. In recent years, there's been a move toward founding nonprofit groups at the state and local levels, where there's less activism and good research than on the national level. It would be good for donors if organizations arose to assess the effectiveness of these groups, much as has happened with more traditional charities.

The point of this isn't to polarize philanthropy or to warn anyone away from traditional charities. There's room - and need - for an array of approaches. But at the end of the day, the government is the central player in many of these spheres, with the scale and power to make changes that other actors simply can't contemplate. Charities that work to make the government's policies better have a unique ability to take small investments and turn them into tremendous outcomes. If you're looking for bang for your philanthropic buck, they're the place to start.

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