I can't really see you but you may be seated.
The charge today is
philanthropy has not lived up to its mission
to advance the common good.
Now we'll first hear from the prosecution for opening statements Mr.
LaMarche, you may begin.
Thank you judge,
counter-intuitive as it is to speak to a thousand people with my back to them uh...
I got a pretty good idea of how I rate with Steve Gunderson our council president when
he called me up a few months ago he said a big spot lined up for me at the Council's
annual meeting in Philadelphia
happy to help in any way I can Steve I told him secretly thinking I'd been selected
for the Distinguished Grantmaker Award and beginning the jot mental notes for my acceptance
speech
that's when steve told me he wanted me to take the role of a prosecutor trying to convict
philanthropy and take away its tax exemption
for a jury of a thousand of the leading foundation staff and board members no less
Steve, did I do something to piss you off I asked?
Was it that time we took the Rasmussen Foundation funders tour of Alaska
and Sarah Palin helped me hook a twenty- pound salmon while you accidentally landed
your hook in Judy Rodin's Gucci wading boots , I mean get over it man.
No, no
no Gara, Steve said
I just think you'd be the best person to make the case by which I’m pretty sure he meant
someone reckless enough to get up before the crowd at the annual meeting a few years ago
and denounce the Texas foundation community for failing to address gross racial disparities in
imprisonment and execution
did I mention the council meeting was in Dallas that year ?
In a state where I think you're legally required to carry a handgun even to yoga class ?
Uh... maybe the maybe the council staff had done research and found that when I was sixteen
and a catholic high school student I argued a bill in nineteen seventy before the model
congress in Springfield
to decriminalize homosexuality
my bill went down in flames and for those of you who are Glee fans are Gleeks as we like
to call ourselves
my courageous advocacy won me at least a year of slushy treatment.
I know I'm likely to go down in flames today but I'm going to give this a valiant try and hope you don't
have time to run out the seven-eleven across the street.
By the way please don't be influenced by the fact that if I win the case today I'm
devoting
three months of my salary to tsunami relief
so ladies and gentlemen of the jury
I'm going to argue to you today that philanthropy is a privilege not a right
and the favored tax status it enjoys in the United States makes sense only when it serves an
unalloyed public good and only when it does so with integrity, transparency, fairness, inclusion
and effectiveness.
Philanthropy is a noble calling and has accomplished many good things for society in the last one
hundred years
I’m sure that my good friend the distinguished counsel for the defense Ralph Smith
will make a strong case in that regard so I will just stipulate that for the record
but the standard in the case before you is not whether many good things are accomplished
by philanthropy
but whether the
money excluded from taxation in philanthropy is justified
whether the foregone tax revenues in our current dire fiscal state
could be used to keep senior centers and libraries and after school programs open
hold tuition within reach at public colleges and universities
expand access to internet
in rural communities and so on
time doesn't permit an exhaustive list of the ways in which we in philanthropy however
well-intentioned
have failed in our mission
but in my brief opening remarks I want to offer three arguments.
First our sector has eroded its moral authority by an excessive focus on self-interest
let me use a recent example
the fight over comprehensive health care reform and how to pay for it
last year in the biggest political fight of a generation the President sought to greatly
expand the social safety net
by extending health care to tens of millions of uninsured Americans; they sought to do it
in a cost effective way partly through savings in other areas
when the targets were wasteful Pentagon spending
unnecessary agricultural subsidies or monopolies enjoyed by firms that offer student loans
there were loud wails and armies of lobbyists mobilized
We expect a predictable outcry from special interests
but we expect more from philanthropy.
The President sought to pay for his health care plan in part
by capping the charitable deduction where it was under Ronald Reagan who was not a big
fan of taxes.
The Council on Foundations then chaired by counsel for the defense Ralph Smith
J’accuse sir!
opposed the charge
Independent Sector was more measured uh... asserting that it would reduce charitable giving while
acknowledging that charities sagging under the weight of health care costs would benefit
the evidence about impact on charitable giving is mixed
the Council on Philanthropy and Indiana University asserted that tax changes by themselves would
have little direct negative impact
and I agree.
Although to listen to big philanthropy you could be forgiven for thinking otherwise. The
precise level of the charitable deduction like the fact of the deduction itself did
not come down on tablets from Mount Sinai
it is a choice
that a democratic society makes
weighing competing interests and values
one of these is donor independence and philanthropic pluralism
these are not fleeting values
but neither is the responsibility of citizens in a democracy acting together through government
to strengthen social protections.
To argue against a critical funding mechanism for something as fundamental as health care
which aim to narrow the yawning gap of inequality that's steadily grown in America in the last
thirty years seems
to put it plainly, wrong to me.
It amounts to asserting that democratically determined public needs, particularly for the
most marginalized, should be trumped by an interest in having wealthy people
keep more control of how they direct their funds.
There were plenty of other interests
arrayed against the President's changes for those who itemize tax deductions
like the mortgage lending industry
but their job was made considerably easier by the outcry from the philanthropic and non-profit
sector
0 we were shortsighted
and heedless to the social imperative
to provide a much stronger safety net in the United States
I wish this short-sightedness was atypical but sadly it's not
philanthropy as a whole has ferociously resisted any stirrings of legislative interest
in raising the payout rates
they weren’t handed down from Mount Sinai either by the way,
to open the flow of foundation dollars for urgent social needs
and during the Bush years
when wealth was redistributed upwards through massive tax cuts
for the rich
coupled with staggering costs of the war in Iraq was hard to find a voice in American
philanthropy raised in protest
and yet there is no question
that those most in need of philanthropy
the poor, the sick
minorities, the old
bore the brunt of those costs
we're failing the people we most need to stand behind.
This leads to my second argument
that our sector remains too focused on charity and lacks a strategic focus on systemic change
Here I had a very powerful quote from the Reverend Doctor Martin Luther King
thank you Carly
shortening my time here today
we like to say
that one of the things that are privileged status makes possible is the ability for philanthropy
to take big risks
we don't have to run for office or satisfy shareholders or track customers
or win any popularity contests
we can take the long view
and undertake bold initiatives that make it safer for government and other private capital
to come in later on
but you and I know that the powerful institutional conservatism of philanthropy
means those risks are few and far between
even when we do take risks and we stumble we share our failures
in self-serving ways
like
like Eddie Haskell-like job applicants
who when asked to cite a weakness or an area for improvement manage to tell you
they really ought to get more sleep and leisure and not spend eighty hours a week at the office.
Too much of what philanthropy does is a side show to the most pressing issues
of our time.
Global warming threatens the planet
and pseudo-scientific denialism of it threatens democracy
yet the handful of foundations engaged in climate change are vastly outgunned
and even they hoard their foundation assets as if there was no tomorrow which in fact there
won't be before long if we don't reverse the warming of the planet.
The National Committee for Responsive Philanthropy of which I am a proud board member
has determined that only seven percent of foundations
spend as much as twenty five percent on social justice grantmaking.
The Foundation Center taking a broad and generous view
estimates it at fifteen percent.
That leaves the vast bulk of American philanthropy focused on safer things that
do little to affect the titanic issues of inequality, poverty, human rights and environmental
degradation.
Few of the large ostensibly progressive foundations in America make any significant
grants for lesbian and gay people
forty years after stonewalling in a country where now over half the populous now favors
same sex
marriage
for native people still reeling from the ravages of American expansionism the percentage is even
lower
When will this change?
How long is too long?
Finally to continue in this vein,
our sector is not sufficiently reflective of the rich diversity of this country and globe
and in particular, does not reflect the voices of the most marginalized.
As Emmett Carson tells us, charitable dollars are quasi-public dollars
but eighty five percent of foundation board members are white
only four percent of them Hispanic
in a country where ninety-two percent of the population growth in the last decade according to The Economist,
came from people of color
Nearly three-quarters of foundations have no written policy on diversity and fewer than
ten percent of board members are under forty despite the rich vein of talent
over two hundred people
who came to Philadelphia early for the AAPIP Conference this weekend.
Methodist Bishop Hugh Price Hughes, a critic of Andrew Carnegie in his day, succinctly
put the argument against the privileged treatment of philanthropy,
Millionaires at one end of the scale involve paupers at the other end,
even so excellent a man as Mr. Carnegie
is too dear at that price.
Almost a hundred years later can we say any better of ourselves?
Thank you