LA Philanthropy Watch

Advancing Philanthropy (the bimonthly publication of the Association of Fundraising Professionals) includes a ‘President’s Report’ by Paulette Maehara, AFP’s president. The topic of Ms. Maehara’s report in the May/June 2009 issue is Obama’s recent tax proposal, which would lower the charitable tax deduction from 35% to 28% for individuals earning more than $250,000 annually. In her seven paragraph report (titled, “Tough Times, Tough Decisions”) the first six paragraphs set out the case against this proposal:

• One mission of AFP is to support public policies that are “ideally beneficial for fundraising and philanthropy or, at the very least, not detrimental.”
• In this challenging time for nonprofit organizations, “little changes and fluctuations in the economy, donor perceptions or incentives are quite likely to make a significant difference.”
• Thus AFP is “particularly sensitive” to proposals such as Obama’s.
• Although some development professionals have argued that the proposed change is not “that significant,” it would in fact “directly – and negatively – affect how much existing donors might be willing to give.”
• Some have noted that the decline in charitable giving would be “only minor,” but AFP replies that the proposal would have resulted in an estimated decrease in giving of nearly $4 billion in 2006 and a projected drop of $9 billion in 2011.
• Others have suggested that “charities need to do their part too,” but the demand for charitable services is greater than ever; seen in this light, the proposal “seems pointless and self-defeating.”

In the final paragraph, which I will quote in full, Ms. Maehara reveals (what was left unstated earlier) that AFP has decided to oppose this proposed change:

“Leading in public policy means making tough decisions based on how such decisions will affect the entire profession and sector. Making the decision to oppose this proposal wasn’t easy, and it wasn’t done in haste or without serious consideration. Ultimately, however, we believe it was the best decision and will do the most to help the sector in these challenging times. No doubt there will be even tougher decisions down the road, and we’ll continue to strive to make the best choice for the long-term benefit of the entire profession.”

While I admire Ms. Maehara’s consummate diplomacy, and I am certain that AFP decision-makers didn’t act “in haste,” I submit that far from being a “tough decision,” this was among the easiest decisions ever made by AFP or any professional organization. AFP’s members expect it to represent the interests of development professionals and the nonprofit organizations they serve.

And that is just what AFP did. It is not the mission of AFP to balance the interests of fundraisers and nonprofits with others in society. There is a bigger picture here – in issues of tax fairness, social justice, the richest haves vs. the have-nots, finding a way to fund universal health care (none of which were mentioned in Ms. Maehara’s discussion) – nonetheless, the top 1.4% income group in this country gives a bundle to charity. And no one disputes that collectively they would  give less if the tax incentives were reduced. (For perspective: their giving totaled $81.26 billion in 2006, according to the Center on Philanthropy at Indiana University.)

It is no more the role of AFP to take an altruistic or utilitarian stance vis-à-vis this proposal, than it is the role of the Sierra Club or the Business Roundtable to give equal weight to the interests of its opponents. A decision to endorse Obama’s proposal, or even not to take a stand at this stage of the debate, would have been virtually inexplicable – “pointless and self-defeating,” in Ms. Maehara’s words.

It is possible for a development professional or a nonprofit executive to step back and regard the big picture, and even to oppose one’s professional interests (as opposed to the broader public interest or principles of social justice or one’s commitment to health care for all). But that’s not the business of AFP – at least not at this stage of the debate, when an isolated initiative (which conflicts with the organization’s mission and is not inextricably linked to an appealing proposal late in the legislative process) can be opposed with virtually no blow-back.

Disclosures: i. I have been a member of AFP since spring 1991; ii. I worked full-time on Obama’s campaign from late summer 2008 through Election Day; and iii. nothing on Obama’s agenda is higher on my wish-list (as a public policy enthusiast) than universal health care.  See my earlier post on this tax proposal (before I was aware of AFP’s opposition).