[lbo-talk] The Second Looting of New Orleans

Wojtek Sokolowski sokol at jhu.edu
Mon Dec 18 16:22:57 PST 2006


Steven:

Well, in this country social assistance has been in recent years and decades handled by private charities or by government funded non profits. This is not somethng that can be blamed, exclusively, or even primarily, on the current US administration as the practice goes back decades, at least to the 1980s and even earlier.

[WS:] This is mixing apples and oranges. Government funded nonprofits and private foundations are two different things. Foundations are merely a funding source, and a minor one. Total private giving in the US, most of which is not foundations grants but individual giving to religion, is barely above 1% of the GDP in total, which is a drop in a bucket of what government spends on education and social programs (about 15% on social programs and 5.7% on education, which is over 20 % of the GDP.)

So foundation giving is really tiny comparing to combining operating budgets of service delivery organizations, a great share of which are indeed nonprofit. What is more, foundations generally do not cover operating expenses of social programs (which are funded either by government, sales or program service charges) - they tend to fund pilot programs, innovations, arts, research etc, as well a great deal of programs in the developing countries - which is a much more effective use of their tiny (comparing to the need) resources. What is more, they fund those programs from their *investment income* i.e. returns they receive from investing their assets, rather than by distributing the assets themselves. Therefore, I found the remark citing $500 in assets in the context of reproach for not distributing it to the needy laughable, Dwayne. Foundations do not distribute their assets! This would be like GM selling their plants and machinery to cover their operating expenses.

In short, the main player in social service provision is government not private philanthropy. The latter is mainly a conservative myth, and I find it ironic that the self-styled radicals swallow that myth wholesale. OTOH, I do not find it surprising. This society needs demons to function, and finds its demons according to the ideological orientation: the right finds it abroad, in the UN and the liberal establishment, the left finds it in the middle class and the liberal establishment, and most find in the government.

Wojtek

PS. Can I ask you guys a favor NOT to post HTML formatted text to this list? MS Outlook by default assumes the same format for the reply as in the original message, and it is difficult to remove.

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