Pablo Eisenberg Responds

Pablo Eisenberg, who Stacy Palmer, editor of the Chronicle of Philanthropy, has described as "one of the most influential and outspoken voices in philanthropy," sent an email response to my posting of Bill Schambra’s email on Friday. If you’ve missed the Egger vs. Eisenberg debate, you can catch up via my review of the debate. I added the hyperlinks in Pablo’s response to direct readers to relevant background info.



I believe your reading of our respective positions misses what I believe to be the essence of the nonprofit sector.

The sector, composed of operating nonprofits and foundations, is an independent body of organizations which serve the public interest and public needs, are exempt from taxes and many, if not most, receive tax deductible funds, are self-governing, do not make profits and, by law, are permitted to do a limited amount of legislative activity. Through common law and the social compact, they are given their special tax status in order to provide services, education, charity and research and advocacy that, for the most part, government can’t or shouldn’t do. They serve as counterweights and safeguards in our civil society. They are permitted to run profit-making businesses as long as the latter are germane to their missions and the profits are ploughed back into their nonprofit activities. here the businesses are not tied directly to their missions, they are required to pay taxes.

The Congress has endorsed the right of nonprofits to do a limited amount of lobbying, but has prohibited any partisan political activity or direct involvement in political campaigns. I agree with these stipulations that say clearly that nonprofits are not to be involved in politics. I would go beyond this to endorse the elimination of 527 organizations that have, in my view, no business in being part of the tax code and I have some doubts about nonprofits helping to fund PAC’s. I also believe that many of the nonprofits that make profits from some of their businesses –notably museums, other art institutions, etc. — should be taxed.

This view, I believe, is far different from Bob’s. He wants all political restrictions on nonprofits dropped, so that they have the leeway that unions, corporations and others have in becoming an integral part of the American political game, including political contributions. I don’t want that to happen. Nor do I want the lines between businesses and nonprofits blurred. There should be a clearly defined line between business related and non-business related activities, something which neither IRS nor the Congress has yet seriously tackled.

But I do believe, as the Congress has, that nonprofits have the right to advocate on issues important to their constituencies and the public interest. My quarrel with nonprofits is that have not had either the interest, the leadership or courage to do so.

Within the limits of the lobbying law, they have failed to exercise their potential capacity. Foundations have lied about nonprofits’ rights to lobby, putting restrictions on lobbying in general support grants. Unlike the few conservative foundations, mainstream foundations have generally avoided activism.

I want nonprofits far more engaged in legislative activity, bringing issues before politicians, generating voter registration, but not getting directly involved politically. As I have said, taxpayers don’t want it, Congress doesn’t want it and people like me don’t want to corrupt nonprofits by dealing in politics. The public trust is all nonprofits have going for it. Without it, they won’t be able to raise the money they need to conduct their nonprofit business.

Hybrid organizations and social venture projects are a negligible part of the nonprofit community. They should remain so. The more we see of them, the more failures we see (eg. see the SEEDCO study). Bob would like most nonprofits to become hybrids. He fails to note that once a nonprofit becomes business oriented, it invariably become less of an advocate and activist.

There is a large gulf between our perspectives, I think. While I would like to see more advocacy and activism, it should take place within a framework that excludes partisan political activity and campaigns and stresses transparency and public accountability, elements not yet found in much of our political system.