Tuesday, November 10, 2009
Yesterday's Wall Street Journal included an opinion piece in which Pablo Eisenberg roundly criticized the state of philanthropy in the U.S. Most of his proposed fixes are familiar to those who follow nonprofit law: increase private foundations' required pay-out from five percent to seven or eight; increase funding for nonprofit organizations' general operations and stop perpetually chasing sexy and innovative programs; fund successful projects for the long-term rather than merely a start-up period; etc.
I found two points particularly salient. First, I agree with Eisenberg's call for American philanthropy to focus more attention and more funding on the the truly needy -- the group that we lawyers refer to as the "poor and distressed." Eisenberg quotes statistics indicating that only twelve to fifteen percent of philanthropic dollars go those groups, while most dollars go to support universities, hospitals, arts organizations and the like.
Second, he calls for an improved system of public accountability, arguing that self-reform in the sector has been a "dismal failure" and that there are no other effective means of monitoring the philanthropic/ nonprofit sector. Interestingly, he argues that the only effective watchdogs of the nonprofit/philanthropic sector -- newspapers -- are fast losing effectiveness as investigative reporting and reporters go under the budget ax.