There is a crisis in philanthropy today. At least, that’s what the National Council for Responsible Philanthropy (NCRP) wants you to believe.
America’s foundations, they say, give only 33.2 percent of their grant money to non-profits that serve those most in need. This has supposedly caused a widespread outcry and demands for change in the halls of Congress.
But if you missed the riots in the streets and the chants of “Down with the Foundations,” it is because they are imaginary. And so is this supposed “crisis” in foundation giving, a study released earlier this month strongly suggests.
Previously, The Examiner reported how the liberal NCRP and its directors have been both subtly and overtly threatening new federal regulations that would force foundations to give half their money to a narrow set of causes, and with few strings attached.
The simplest explanation is that left-wing non-profits, hungry for more foundation money, see an opportunity for a liberal Congress to help their cause. But NCRP’s stated reason deserves attention as well.
In their March publication, “Criteria for Philanthropy at its Best,” NCRP studied the annual data collected by the Foundation Center, which reports on giving by 1,300 of the nation’s largest foundations.
The NCRP activists concluded that between 2004 and 2006, only 33.2 percent of foundation dollars go to the most vulnerable populations, which they define as members of 11 of the 16 categories into which the Foundation Center places grants. There is room for debate over NCRP’s definition, which includes the poor, minorities, girls, and AIDS patients, but not boys, cancer sufferers or substance abusers.
Even accepting all of NCRP’s assertions about who needs the money most, they mislead when they claim that “approximately $1 out of every $3 granted…was intended to benefit communities with the least wealth, opportunity or power[.]”
The Foundation Center’s data, on which NCRP based its claims, shows that the largest category of grant beneficiaries is not the aging, the poor, or any other “vulnerable” group, but rather “Not Specified/General Public.” This category accounted for 58 percent of foundation grant money and 53 percent of grants reported in 2007. NCRP’s document simply conceals this critical fact.
Little can be said about the “unspecified” grant money, says Foundation Center researcher Josie Atienza. In some cases, grants land in that category because they serve the general public (which does include the most needy). But often, foundations simply fail to volunteer complete information to the Foundation Center, which cannot possibly scrutinize all of the 150,000 grants they report on annually.
The Foundation Center analyzed its 2007 data for The Examiner and concluded that 34 percent of the money given in 2007 was coded for NCRP-defined “vulnerable” groups, with another 58 percent “unspecified.” As Atienza explained, the only valid conclusion is that those 11 groups received somewhere between 34 and 92 percent overall.
So what about all of the “unspecified” money? Georgetown economist Phillip Swagel released a study for the Philanthropic Collaborative this month looking in greater detail at hundreds of such “unspecified” grants in the area of “health.”
He found that in addition to the 31.4 percent specifically coded for underserved groups, more than 51 percent of the remaining “unspecified” money served just two of those categories — “minorities” and “the economically disadvantaged.” Do the math, and it means that more than 68 percent of the grant money Swagel surveyed went to “underserved populations.” That’s a pretty far cry from the NCRP’s claim of “one dollar in three.”
There is your supposed “crisis” in philanthropy. Those wishing to regulate it are manipulating data to serve their own ends.
David Freddoso is a Commentary section staff writer.
