Philanthropy wants a piece of the stimulus pie

This morning I was talking with a younger friend who wants back into the employment scene after a period "off" mothering small children. She's an accomplished trainer of people, a community organizer, an organizational strategist and planner -- the sort of person who for the past twenty years has usually found employment in various non-profit sector community enterprises.

We mused about whether the economic bust might kill or enhance her chances of finding a job.

On the one hand, it looks obvious that the downturn will lead to radically reduced funding from foundations to community non-profits. Foundations make their grants out of their investment portfolios -- as the financial markets went bust, foundations suddenly found themselves with a lot less cash to throw around. This has not really worked its way through the system yet, as grant cycles lag behind investment realities. But by 2010, it seems just about certain that there's not going to be much foundation money floating around.

On the other hand, in lean times, sometimes the government has stepped into the areas these groups work in -- health promotion, educational innovation, community development -- and filled some of the void. The classic example was the Depression-era Works Progress Administration (WPA) that not only left us with enhanced parks and zoos, but also funded arts, photography, and literature, to the horror of conservatives. For much of the 1970s, the Feds propped up many a non-profit group through the Comprehensive Employment and Training Act (CETA); groups used the "training" money to pay and expand their staffs.

President-elect Obama calls his supporters to service as a theme of his inauguration.

..." I'm not just asking you to take part in one day of service. I am asking you to make a lasting commitment to make better the lives of your fellow Americans -- a commitment that must endure beyond one day, or even one presidency."

That call for voluntary work bodes well for federal attention to the non-profit sector.

In this environment, it is not surprising to see non-profit executives making their pitch for a piece. Writing in the Boston Globe, two non-profit leaders make their case:

...the nonprofit sector is larger than the auto and steel industries combined, representing 10 percent of all US jobs, and 13 percent of jobs in Massachusetts. If the government fails to pay attention to this critical sector, there could be a loss of 1 million nonprofit jobs, leaving 1 million families without a paycheck, 1 million families buying fewer goods and services, and 1 million families who are closer to foreclosures and debt default.

The nation loses twice when there is a job lost in the nonprofit sector. Not only does a family lose an essential paycheck, but the community also loses a home healthcare worker, a preschool teacher, or an after-school tutor -- people who often serve those most in need.

This all seems unarguable. If Federal economic recovery efforts are to create community-based jobs and perform useful services, especially by employing a significant number for women, getting some money into what the nonprofit sector does seems a no-brainer.

The fight is going to be over who doles out the money. There are advantages and disadvantages to any of the obvious possibilities.

• The money could go through various federal programs, some new. Good: non-discriminatory, maximum transparency. Bad: new bureaucracies that might create new long-term constituencies within the government without guaranteeing either expertise or speed.

• The money could move through the "faith-based initiative." Good: in many cases, these folks are already doing the work, cheaply. Bad: these folks too often jealously guard their right to discriminate in favor of their adherents and to proselytize (even if covertly.) Questions of church-state separation, whether close cooperation with religious bodies is good for either government or the faith organizations, are real.

• The money could go through existing philanthropic channels. That's what the Globe authors want, not surprisingly since that is what they do. Good: they already have systems to pass out money, at least in some way. Bad: those systems often seem arbitrary, fad-driven and short sighted to the grantees.

None of these are easy or perfect.

From what we've seen of the Obama people, if they drive any of this, they'll probably try a little bit of all these methodologies. On balance, that seems a good thing.