Trigger
The Wall Street Journal published on 7/18/2013 an article titled “How Big Government Co-Opted Charities” (Subscribers only) by James Piereson. This is a shocking article about a special crony relationship between many non-profits/charitable organizations and the federal government. I had no idea how extensive and comprehensive this relationship is.
Summary
Basically, a large number of well known non-profits and charitable organizations receive substantial amounts of funding from the federal government making up a large part of their revenues. Without these federal funds many of these organizations would collapse. The author describes how this relationship extends the welfare state into the private sector. In return, these organizations lobby heavily in Washington for more funding etc. or support all kinds of big government legislation (e.g. ObamaCare).
E.g. According to the author backed up by a third party source (Giving USA), federal government now supplies one-third of all funds raised by not-for profit organizations. According to Giving USA Annual Report 2012 (here) individuals donated a total of $229 billion.
E.g. $215 billion of federal funds in 2010 were directed towards advocacy groups, social services organizations, and nonacademic research institutions. The AARP, a prominent and influential supporter of ObamaCare, received $97 million or 82% of its revenues in government grants in 2009. The National Council of La Raza received $16 million in 2012 and so on …
Conclusion
The author doubts that the charitable deduction in the tax code is any longer justified. In his words: “The original purpose of the deduction was to encourage charitable giving based on the belief that strong voluntary associations would reduce the need for government support.”
This Is A Government Takeover
This is an incredible nationalization of an important part of the private sector. This is an enormous redistribution of personal income by big government. It should be left to the citizens to decide when and how they spend their money. I don’t think any of the Founders would have conceived something like this happening.
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