Earlier this week the president released his fiscal year 2015 budget proposal. Although much of the press coverage has focused on the provisions for increases in for climate change, increases in health and human services funding, and investments in education reform, the administration has also provided a few changes to the federal government’s current relationship with philanthropic endeavors. The changes have largely gone unnoticed; however, Rick Cohen’s “Foundation and Nonprofit Secrets in President Obama’s FY2015 Proposal” in Nonprofit Quarterly has précised the implications for nonprofits, albeit with some arguably editorializing comments regarding the merits of those implications.
Beginning where Cohen concludes, he asks, “What is a federal budget but a collection of signposts telling the reader what the president values or doesn’t?” Answering this question, it seems abundantly clear that the current government heavily favors privatizing the public, as well as publicizing the private. Looking at Cohen’s summary, two examples (plus one of my own) stand out.
First, the budget calls for the creation of two “New Federal Foundations.” The first, the United States Citizenship Foundation, will receive $3 million to “improve citizenship education and naturalization preparation.” The second, the National Bureau of Land Management Foundation, will seek to “leverage private funding” to “protect natural, cultural, and recreational resources on public lands.” These “public” foundations are provided the faculties to solicit private funds.
Second, the budget provides $20 million for the “HUD-supported Section 4 capacity building program.” This program works with national organizations that help to achieve the government’s housing objectives, such as with organizations like the Local Initiatives Support Corporation, Habitat for Humanity, and Enterprise Community Partners.
Third, not included in Cohen’s summary, the budget also “invests $70 million in the Social Innovation Fund to test promising new approaches to major challenges, leverage private and philanthropic capital to meet these needs, and expand evidence-based programs that demonstrate measurable outcomes” (152). Essentially, this fund is a sort of public, institutionalized strategic philanthropy.
Beyond these examples, there are countless others of public-private partnerships (or what some in education have rearranged as private-public partnerships) within this proposed federal budget. Although not law quite yet, most, if not all, of these suggestions are expected to pass without issue. However, what Cohen labels “thumbs up” sections of the budget may instead warrant significant criticism, particularly from the perspective of philanthropy and civil society.
First, the budget purports to challenge the public/private distinction by allowing opportunities for these two sectors to have notable overlap; however, a fuller understanding reveals this ‘significant breakthrough’ for public-private partnerships is merely a semantic rearrangement. The very act of creating a budget is the process of determining a disbursement scheme of acquired (private) resources for the community (public). The budget’s “New Federal Foundations” are “public foundations” allowed to solicit “private funds,” but in reality they are simply public foundations encouraged to increase their public funds, albeit voluntarily. The creation of these foundations represents the government’s lack of real support for these causes as well as a general misunderstanding of the benefits to private philanthropy.
Second, the budget puts the government in a precarious position, viz. judging caritas. Looking at the HUD Section 4 funding mechanism, why is the government in the business of determining the effectiveness of private organizations? By selecting LISC, HH, and ECP as lynchpin organizations for this program, the government is tilting the philanthropic playing field. If the government thinks this is a truly worthwhile program, it would appear the most appropriate solution would be to have a government program in charge – not governmentalize these private organizations. Or better yet, the government may even think about reducing its control and allow for the opportunity for these private organizations to fully flourish.
Third, the budget puts the government in the role of donor through its strategic philanthropy in the Social Innovation Fund. Although the merits of such philanthropy have been hotly debated (particularly through the pages of Philanthropy Daily), all can admit that the role of “donor” for the government is a bewildering one, considering its funds are from and of the community. Until taxes resemble alms, the government should rethink the philanthropic model implied by this budget’s SIF funding.