Threats to Latinos a challenge for nonprofits

Advocates for Latinos have become targets of hate campaigns that underscore the critical role nonprofits play protecting minority rights and strengthening civic life in a democracy.

One of the great champions of nonprofits was Alexis de Tocqueville, the 19th-century French writer who saw in nonprofits a distinguishing hallmark of our ongoing “democratic revolution,” which he believed faced a continuing threat from the “tyranny of the majority.”

Instead of expecting government to take care of their problems, a solution that could lead to government running their lives, Americans team up and work to fix what is wrong.

Those “associations” that Americans form – known today as “nonprofits” — also represented for Tocqueville an important safeguard against the tendency of majorities and government to run roughshod over the rights of minorities.

Tocqueville’s insights and fears are important to remember in the face of growing intolerance in America for Latino immigrants and their nonprofit advocates.

As The News & Observer in Raleigh, N.C., reported recently, two of the state’s leading Latino advocates have been the target of threats and racist messages.

Because of the threats, Andrea Bazán, president of the Triangle Community Foundation in Durham and the new board chair for the National Council of La Raza, a national advocacy group for Latinos, has requested protection at some public appearances.

She was so concerned, in fact, that she sent her children to stay with her former husband and stayed away from home for several days in June, the newspaper reported.

And Tony Asion, a former police office and a successor to Bazán as executive director of El Pueblo, the leading advocacy for Latinos in the state, told the newspaper he had received death threats and messages he considers to be racist, and he now fears for staff members at El Pueblo.

Nonprofits work to advance the philanthropic mission of healing and repairing our communities and making them better places to live and work.

Yet in simply doing their job and advocating for the rights of Latinos, nonprofit leaders like Bazán and Asion now face threats that cause them to fear for their own lives and those of their children and fellow workers.

As Tocqueville recognized roughly 170 years ago, nonprofits perform a critical job in America by helping to make sure the most vulnerable among us do not fall prey to the intolerance of the majority.

But in a land of immigrants, a land in which the fading white majority is being replaced by a new majority consisting of minorities, the hate hurled at Latinos and their advocates only reinforces the indispensable role nonprofits must continue to play in safeguarding our continuing experiment with democracy.

Nonprofits can partner on back-office tasks

Creating innovative strategies for social change is the focus of much of the widespread lip-service nonprofits and foundations give to the need for collaboration in the charitable marketplace.

But equally critical is the need for nonprofits to find ways to combine and share the cost of operating their back-office systems.

With the economy sinking and the cost of doing business rising, nonprofits face big challenges in running their shops efficiently and effectively.

Back-office collaboration among nonprofits could yield savings and efficiencies in securing and handling common business needs like paying rent and utility costs, providing employee benefits, operating software systems and databases, and working with consultants.

While far too few foundations will make grants to help nonprofits cover their operating costs, some foundations have been willing to invest in helping groups of nonprofits pay for products and services they can share.

Several years ago, for example, the Z. Smith Reynolds Foundation in Winston-Salem, N.C., paid for a handful of consultants to provide fundraising advice to groups that fight domestic-violence.

More recently, the foundation made a grant to help six water-conservation groups hire fundraising fellows for three years, provide them with training, and help pay for support services such as donor-database software they might share.

To help equip them to do a better job fixing the urgent problems our communities face, funders can make investments that spur groups of nonprofits to partner on back-office operations.

Through collaborations that help them reduce costs and operate more efficiently, nonprofits apply more of their time and resources to the larger job of making our communities better places to live and work.

Charity regulation needs fixing

The regulation of private foundations and charitable giving has skewed the charitable marketplace and needs to be changed.

The law lets donors who create private foundations take their tax breaks up front but does not require that the foundations pay out more than five percent of their assets each year, letting them hoard their wealth.

So donors and their foundations reap big windfalls.

Donors save on taxes, and their families enjoy continuing power and influence through their foundations.

The tax breaks for wealthy donors and the low spending requirement for foundations starve social programs of funds and transfer the cost to less affluent taxpayers and to nonprofits struggling to meet rising demand for services.

A bill in Congress five years ago to require private foundations to pay out more their assets each year in grants triggered howls of protest from big foundations.

Exercising the clout that flows from the wealth they control, foundations spent millions of dollars to fight the bill, outgunning advocates for a more even-handed charitable marketplace.

What is wrong here? Consider the multi-billion-dollar bequest the late Leona Helmsley created for the care and welfare of dogs.

Helmsley, like any donor, was free to support the cause of her choice.

But as law professor Ray Madoff of Boston College pointed out in a recent opinion column in The New York Times, because it will be paid through her family’s charitable trust, Helmsley’s huge bequest exposes a continuing scam perpetrated against U.S. taxpayers by the laws that give tax deductions for charitable gifts and let donors create perpetual foundations.

Not only can donors save big bucks on the front end and let their foundations hoard even bigger bucks far into the future, but foundations also can count overhead costs, including salaries for trustees, as part of the tiny annual payout the law requires them to make.

It was the 2003 proposal in Congress to exclude overhead costs from the required payout that unleashed a flood of crocodile tears from foundations, which whined that the change could deprive them of their dream of immortality.

The laws regulating foundations and charitable gifts cost taxpayers big-time and tilt the charitable marketplace in favor of wealthy donors and their foundations.
Getting the short end of the stick are nonprofits and less affluent taxpayers.

Madoff calculates that, with her fortune warranting an estate-tax rate of 45 percent, Helmsley’s $8 billion donation for dogs really amounts to a gift of $4.4 billion from her and $3.6 billion from taxpayers.

In return for paying out a tiny share of their assets each year, private foundations yield big tax benefits for their donors, and give the donors’ families, as foundation trustees and directors, continuing power and prestige.

Many foundations now demand that nonprofits looking for grants prove their commitment to equity.

But many of those same foundations are first in line to fight efforts to make charitable regulation more equitable.

In theory, the charitable marketplace in the U.S. represents a good bargain and frees government for other tasks: Nonprofits enjoy tax-exempt status because they address the symptoms and causes of urgent social needs, and donors and foundations enjoy tax benefits because they invest in nonprofits.

But the deal has soured because the rules have allowed donors and their foundations to bulk up, like athletes on steroids.

To ensure the fairness the charitable marketplace needs to foster innovation in giving and in nonprofit enterprise, Congress needs to bring the rules back into balance.

Charity must make itself a market

Giving has become a major currency in the global economy yet remains an asset whose true worth and potential are undervalued and overlooked.

Government and business pay lip service to the important role charity plays in our communities and economy, yet treat it as a second-tier vehicle for social change, one that requires special treatment.

Nonprofits and philanthropic organizations reinforce the perception they are marginal players by acting as if their good intentions entitle to them to public and private investment, and free them of the need to compete in the marketplace under the same pressures and rules that other businesses face.

To increase their impact, people and organizations working and investing in the charitable marketplace need to be brutally honest about the value they add, the challenges they face, and their need to make their own way.

By moving beyond their sense of entitlement, confronting their strengths and weaknesses, and designing smart business models, nonprofits can more effectively engage customers, investors and partners and serve as leaders for change.

And nonprofits have a great story to tell.

Whether addressing problems at home or abroad, giving is built into Americans’ DNA.

Americans see problems and give their time, know-how and money to improve and enrich their communities.

As individuals and through their families and businesses, Americans create and invest in nonprofit and philanthropic organizations to address urgent social needs.

In 2007, charitable giving in the U.S. exceeded $300 billion for the first time, with individuals giving nearly 75 percent of those dollars, and bequests accounting for nearly 7 percent more, according to Giving USA 2008.

And in 2006, over 61 million individuals volunteered, representing over one-fourth of the U.S. population, with 15 million Americans volunteering on an average day, and the average volunteer serving over 200 hours a year, according to The Nonprofit Almanac 2008.

The U.S. nonprofit sector also is big, diverse and growing, the Nonprofit Almanac says, accounting for five percent of gross domestic product, over 8 percent of wages and roughly 10 percent of job.

In addition, the estimated value of volunteer time equals nearly half the wages nonprofits pay.

Nonprofit wages and employment both have been growing in their share of the economy, and nonprofit jobs in recent years have been growing three times faster than the rest of the economy.

Beyond those impressive numbers, the resources exchanged in the charitable marketplace simply make our communities better places to live and work.

But until nonprofits and givers get over their sense of entitlement and start building enterprising business models that break down the walls to true collaboration among nonprofits and with business and government, the charitable marketplace will remain a marginal force for social change.