Opinion Columns & Blogs

Ben Boychuk: Liberals launch a misguided war on nonprofits

Without a doubt, Americans are the most generous people on earth. Even in a sluggish economy, people are willing to dig deep for a good cause – or just about any cause, come to think of it. That seems especially true around the holidays, but it’s the case just about any time of year.

We gave $316 billion to charity in 2012, up from $298.4 billion in 2011 and $286.9 billion in 2010. The vast majority of those dollars came from individuals, with corporations, foundations and charitable bequests accounting for the rest.

And those hundreds of billions went most anywhere you can imagine. We’re a great, big country with a diversity of interests – from conquering cancer to sheltering guinea pigs. According to the National Center for Charitable Statistics – a project of the Urban Institute, a venerable liberal-leaning nonprofit think tank – the United States boasts 945,415 public charities, 96,765 private foundations, and 364,640 “other” types of nonprofit organizations, such as civic groups and fraternal organizations.

Americans’ charitable giving underscores a truth as old as the republic: Government cannot, and should not, do everything. There are a whole host of social functions in this relatively free, mostly open, more or less self-governing society simply better left to private associations – or put more simply, you and me.

Government encourages people to be charitable by letting them deduct their contributions from their taxes. Here’s where things get unpleasantly political, because some nonprofit groups engage not so much in feeding the poor or curing disease, but spreading ideas. And ideas are nothing if not controversial.

A bit of disclosure here: I work primarily for one such nonprofit, the Manhattan Institute, which publishes the quarterly journal I help edit, City Journal. I’ve alternated working for nonprofits and for-profit corporations – newspapers still make profits, don’t they? – throughout my career.

Certain think tanks have acquired reputations as research arms of the major political parties – think of the Heritage Foundation for Republicans and the Center for American Progress for Democrats. Obviously, people are free to believe whatever they want about this sort of work, which spans the political and ideological spectrum. But in 20 years of trading in words, nobody has ever told me what I could or couldn’t write.

What’s clear, however, is that think tanks and right-leaning nonprofit associations are mighty effective. Otherwise, why would so many liberals be so keen to shut them up?

The impulse isn’t new, exactly, but it’s found a more aggressive voice in just the past few years. Congress is still trying to sort out the extent to which the Internal Revenue Service targeted conservative tea party groups for extra scrutiny before giving them nonprofit status in the run up to the 2012 elections. Many of those groups simply gave up rather than wade through more red tape.

Some self-styled liberals would do away with such nonprofits altogether. Robert Reich, Bill Clinton’s former secretary of labor, groused recently how America’s wealthiest 20 percent benefited from $33 billion of nearly $40 billion in charitable deductions last year. Those rich folks aren’t just giving to think tanks. They’re also underwriting colleges and universities, hospitals, and the arts.

Still, Reich pointed out that $40 billion in deductions is money the federal government might otherwise spend on its own social and educational programs. He takes for granted that government-directed charity is superior to anything the private sector might do.

“If Congress ever gets around to revising the tax code,” Reich wrote, “it might consider limiting the charitable deduction to real charities.”

Ah. There’s the rub. Who is Reich – or anyone else – to say what is and isn’t a “real charity”?

Oh, but it gets worse. Sen. Elizabeth Warren, the Massachusetts Democrat who has set progressive populists’ hearts aflutter, would very much like to intimidate businesses into cutting back their contributions to think tanks whose work she dislikes. Warren earlier this month sent a letter to six of the largest banks in the country, suggesting they “disclose” their contributions voluntarily – or else.

Even Warren doesn’t go far enough for some liberals. “No one should have very high expectations that the banks will voluntarily offer a tally of the money they give to research organizations,” wrote Bloomberg View’s James Greiff. “That’s why Warren should go all out and press for rule changes so that think tanks disclose how for-profit companies use their checkbooks to influence public policy.”

Behind the appeals for disclosure and transparency, however, lies a powerful streak of envy. Warren, Reich and others in the progressive chorus don’t particularly care for the tenor or direction of the debate, so they would use the force of law to squelch the voices that stand in the way of progress.

In the face of charitable persuasion, coercion seems to be all they have left.