How Big Government Co-Opted Charities

Apologies To Mr. James Piereson

I could not come up with a more suitable title for his article published 7/18/2013 on the Opinion Page of the Wall Street Journal. Here is the source of this blog. His article is highly recommendable. He is among other things the President and a trustee of the William E. Simon Foundation.

Be warned it is a shocking article! :-)

A Primer

The above article is very long. Thus, let me try to summarize the salient points here (Emphasis added).

1. “For much of U.S. history, nonprofits have operated as a check on government by providing private avenues to serve the public interest. Unfortunately, American charities—and more broadly, the entire nonprofit sector—have become a creature of big government.”
2. “For decades, the U.S. government has administered research, welfare, housing and educational programs through a system of grants to ... not-for-profit advocacy groups. In the past 50 years, federal spending has exploded 36-fold, to about $3.6 trillion in 2012 from $100 billion in 1962. Meantime, the number of federal civilian employees has expanded modestly in comparison—to 2.8 million in 2011 from 2.5 million in 1962. The reason the federal government can increase its spending without adding many employees is because it subcontracts so many of its functions to ostensibly private institutions. This system has gradually turned much of the not-for-profit sector into a junior partner in administering the welfare state.”
3. “The publication Giving USA, which tracks charitable spending, reports that the government now supplies one-third of all funds raised by not-for-profit organizations. Major research universities, hospitals and health centers could not survive without large allocations from the federal government, and are among the largest recipients of federal grants and contracts.”
4. “If we leave out the large sums these institutions receive, the nonprofit sector still got $215 billion in 2010 in government grants and contracts. These funds were directed primarily to advocacy groups, social service organizations and non academic research institutions.”
5. “Many political groups that lobby for increased government spending are major recipients of government grants. AARP, which lobbied mightily on behalf of the Affordable Care Act, has a tax-exempt foundation that received $97 million (or 82% of its revenues) in government grants in 2009.
6. According to the website www.USASpending.gov, the National Urban League received $16 million in 2012 and the National Council of La Raza, which lobbies on behalf of immigration reform and other issues important to Hispanics, got more than $8 million in 2010 in grants from various government departments and agencies. La Raza recently won a $100,000 grant from the National Aeronautics and Space Administration for a public-relations campaign called "Engaging the Latino Community as Only NASA Can."”
7. “Planned Parenthood, also an influential advocate for government spending, received more than $25 million in federal grants in 2012. This list could be expanded many times. Often these well-connected organizations win several grants per year from different federal departments and agencies.
8. Religious organizations also receive large infusions of federal funds. Catholic Charities USA receives more than half of its funding each year ($554 million in 2010) from federal grants. In 2012, the U.S. Conference of Catholic Bishops received $63 million, and World Vision, an evangelical relief organization, received $57 million in federal grants.”
9. “ Instead, they [government money dependent non profits] form one of the more powerful lobbying forces in Washington for increasing government spending, especially spending on tax-exempt groups.”
10. “The cozy relationship between nonprofits and the government should make us question the value of the charitable deduction in an era of expanding government. 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. It no longer serves that purpose, given that private charities have become advocates for bigger government.”

The Little Sisters Of The Poor

This non profit organization was recently all over the news, because of Obama Care.

I have blogged here about their huge mistake to accept lots of federal funding from Medicare.

What To Do About It?

Unfortunately, the author of the above article does not really have much to offer in this article.

From a small, limited government perspective, the solution is simple: government shall not fund any non-profits involved in welfare or health care. If there is any funding it should require a minimum of 75% of all votes in both houses of the U.S. Congress.