Blogging the Economic Crisis: Why We Need A Department of Nonprofits

Blogging the Economic Crisis: Why We Need A Department of Nonprofits

As we head for a changing of the guard in Washington DC, the Obama government will take over a country facing its toughest economic challenge since the Great Depression. Nonprofit staff and boards are worried as an impending financing challenge awaits the nonprofit sector in the coming year as donations, foundation grants and state funding are cut. Despite this perilous situation and despite having a huge role in the economy, the nonprofit sector is largely missing from the public discourse on the economic crisis. Nonprofit professionals and board members need to ask why we are not part of the conversation and how we ensure that our interests are going to be heard in public policy decisions that affect the sector.

Why the Nonprofit Sector Must Speak Up

While the Great Depression provided much of the impetus for government run safety net programs, social services are now largely delivered by the nonprofit sector. Over the last 30 years, government has devolved much of its traditional responsibilities to the sector (whether this is a good thing or not is a subject for a different blog). As the economic crisis takes hold, the demand for nonprofit human services, food from food pantries, and services in other sectors such as workforce development will increase dramatically. While demand is increasing, the supply of services will decrease as donors and state governments cut back. If our missions are to survive, we need a much stronger voice in public policy affairs.

How Do We Ensure Our Interests Are Met

Groups such as the Massachusetts Nonprofit Network and the Nonprofit Congress are doing admirable jobs in lifting up the plight of the sector in public policy discussions. All nonprofit organizations could be more active in supporting these efforts. That being said, advocacy from the outside - in will only do us so much good. The nonprofit sector need an established institutional home withing the federal government to ensure that our interests are included on an ongoing basis.

Create a Department of Nonprofit Organizations with a Cabinet Level Secretary

All other major facets of our collective lives of Americans are represented within a cabinet level position within government. As we've seen Obama appoint the various secretaries, I could not help but notice two things:

  1. The nonprofit sector was entirely missing from the discussion, no matter what sector of the economy was being discussed.
  2. The nonprofit sector is stratified across multiple departments and that as a result in no one department have the interests of the sector as core to their mission. For example, Health and Human Services deals with a number of nonprofit providers, but administering huge programs such as Medicaid and the Food and Drug Administration take precedence.

If the sector is ever going to have a voice, it must have an institutional home and in Washington DC, that means a cabinet level department. A Department of Nonprofits could provide for a reorganization of the scattered parts of the government that deal with nonprofits and bring them into one home. In return for a more prominent role in the nation's public policy making, the nonprofit sector (both nonprofits and foundations) would submit to more rigorous fiscal and program accountability measures. We might consider the following activities for the Department of Nonprofits:

  • Rationalize the nonprofit incorporation system - Take responsibility for the nonprofit incorporation system and monitoring of tax exempt status. The IRS currently regulates these activities even though its not a core function of the agency. The department could also provide clear guidance to the states about connecting the incorporation process with tax exemption process.
  • Establish National Priorities - In conjunction with Congress, the Department would be responsible for setting national priorities in all the major content areas of areas of mission related work. Federal and state government funding would be directed at these national priorities. For example, the Department could serve as the catalyzing force to take on major priorities like ending homelessness connecting government agency, foundation giving and nonprofit work towards a common set of goals.
  • Establish Appropriate Regulatory Regime - In order to implement national priorities, a more robust regulatory regime would be required for both nonprofit organizations and foundations. Even for those organizations who chose not to follow national priorities, reporting requirements would be expanded beyond the financial information on the current 990s to include program outcomes and feedback from clients.
  • Move the Corporation of National and Community Service and President's Faith Based Office - Raising the profile of the Corporation of National and Community Service will increase national service with the goal of making a year of service available for every American young person who wants to serve. Moving the Faith Based Office will depoliticize the office and better connect faith based programs with the rest of the sector.
  • Create a Government-Sponsored Foundation - Similar to the National Science Foundation, a significant pool of resources would be available to develop and dissemination social innovation. Grants would be aligned to national priorities and would be made available to both national scale organizations and smaller local organizations.
  • National Technical Assistance and Best Practices Center - A national center for nonprofit best practices would attempt to aggregate existing knowledge in the sector. The Center would serve as a think tank for the sector and regularly would bring together thought leaders, academics and visionary leaders in order to disseminate research and share learning. The Center would establish a wikipedia of nonprofit best practices to which leaders from throughout the sector could participate.
  • Establish a Bureau of Nonprofit Statistics - The Bureau would be similar to the Bureau of Labor Statistics and would aggregate program outcomes from across foundations and organizations to determine to what degree the sector has moved the needle on national priorities. The bureau could conduct longitifudinal cross-organization studies that the nation so desperately needs to actually measure the efficacy of the collective effort of the sector.

Add new comment

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
By submitting this form, you accept the Mollom privacy policy.