Public agencies entering the race for private funds

NONPROFITS INC.

April 26, 1993|By LESTER A. PICKER

In a recent talk about future trends that may affect nonprofit organizations, I mentioned a relatively new phenomenon: Increasingly, nonprofits are facing competition from government agencies.

I mention it now because I recently spoke with the immediate past president of a state chapter of the National Association of Fund Raising Executives. A few minutes into the conversation, she mentioned with dismay that a new member had joined the chapter. The new person was the director of development for the endowment fund for a public school district.

Think of it. It is no longer enough that the majority of our tax dollars go for public education. Now, corporations, private foundations and even wealthy individuals are being hit up by public schools to fund projects ranging from endowments to science education projects.

If competition from public agencies was limited to schools, it might not raise the hackles of nonprofit organization leaders. But private fund-raising is going on for public parks, museums, even individual public agency programs.

I remember several years ago being called in by the governor's office of a mid-Atlantic state. An innovative alcohol and drug abuse prevention program was planned. This effort would cut across the jurisdictions and mandates of many state and local government agencies.

Any interdisciplinary government program is a nightmare of coordination. That is precisely why the government is so poor at comprehensive solutions to social problems.

To shorten the planning time to get the effort off the ground, a quick infusion of funds was sought from the private sector to bring in experts in this process. What made the request unusual was that the governor wanted to announce the private sector contributions at the news conference set up to launch the effort.

Politicians wield enormous fund-raising power. Governors in .

office are at the top of that arm-twisting art form. The funds were raised in three weeks.

Could that money have been raised as quickly by a nonprofit organization facing the same agenda? Doubtful. It has happened, but I sure wouldn't bet my next meal on it.

Fund-raising by public agencies raises ethical issues which, until now, we have not been willing to address.

It is not simply a matter of nonprofit agencies protecting their turf, as many government executives would have us believe. In my experience, the nonprofit sector does the job that government cannot or will not do. And, they generally do it at lower cost and more effectively.

To my way of thinking, democratic government is chartered to operate by consent of the people. That operation involves supporting those agencies with money we earn and willingly give up. The understanding has always been that the agencies will budget for their operations and accomplish their objectives within that budget.

When, as happens with school growth or with the emergence of a new social problem, the agencies require additional funding, the expectation is that government will redistribute funds or go back to the people for a new mandate -- that is, new taxes.

Government agencies seeking private funds for their operations is an end run around the democratic process.

As is, governments already soak up an enormous amount of private funding through operating in the financial markets to borrow for their operations. That has had a significant impact on business and nonprofit organizations for years. Competing with nonprofits for the scarce charitable dollars left over just ain't right.

Nonprofits need to band together to identify and tackle the thorny issue of competition from government agencies for funding. That public debate alone should go far to help government bureaucrats understand the need for networking into the larger community.

(Lester A. Picker is a philanthropy consultant. Write to him at 71 Bathon Circle, Elkton, Md., 21921; [410] 392-3160.)

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