The crisis of the non-profit sector.
The non-profit sector is overwhelmingly composed of social welfare, educational and humanitarian organizations. The NAACP and other civil rights organizations are non-profit; the ACLU, AMNESTY INTERNATIONAL and related human rights groups are non-profit, as are countless community organizations such as The National Black United Fund that focus on matters such as rent control, programs for the elderly, welfare rights, educational and tutorial programs, food and nutrition programs and legal rights.
At the beginning of the 20th century, the non-profit, tax-exempt designation was intended primarily to protect the interests of enormous capitalist enterprises such as those developed by the Carnegie, Mellon, Rockefeller, Morgan and Vanderbilt families, against new tax laws and restrictions. Corporations were permitted to transfer their surplus capital into non-profit, tax exempt corporations (often bearing the same name). Thus transferred these monies could not be taxed, nor could they be used to generate profit.
Instead, a portion of the endowment had to be used for philanthropic and humane activities. Finally, non-profit tax exempt organizations were banned from specific action of effect passage of particular legislation, or election of specific candidates. In exchange for this behavior, non-profit corporations were permitted lower postage rates, freedom from state and federal taxes. Donors to said organizations would receive tax exemption for their gifts.
Many mainstream 20th century organizations are non-profit, such as the Boy Scouts, YMCA, United Way and charity groups. Because of their intimate linkage with the resources and values of monopoly capitalism in the U.S., their funds are not in significant peril.
However, in addition to such groups, there has emerged in the last 30 years a network of non-profit activity that is devoted to various causes often imperiled by the inequalities and improprieties structured into capitalist society: minorities, women, consumers, the elderly, tenants, artists, conservation, birth control, abortion and similar groups and issues.
There are two halves to the non-profit sector, one half representing and prospering from the status quo, and the other half, of a corrective nature, addressing itself to rights and issues that are too controversial and too unpopular for consideration by legislators, executives and political parties of an establishment characterized by white supremacy and male chauvinism.
What has emerged is a kind of people's democracy in which education and advocacy concerning essential but unpopular causes can be made legitimately through the instruments of the non-profit sector.
Unlike their establishment-oriented counterparts, these issue-oriented non-profit groups must struggle constantly for minimal funds--to pay postage, to pay wages, to meet office overhead and related expenses, not to mention garnering the funds necessary to carry on programs. It is a constant struggle.
Recently, such organizations have been under systematic attack from conservative politicians and the interface of reactionary politics with government policy.
There has been the systematic rise in nonprofit postage rates, with the expressed motive of the Post Office to phase out the nonprofit postage rates by 1987. Rates for bulk mailing--the life blood of non-profit fundraising--have increased in the last 10 years from $18 per thousand pieces to $58 per thousand pieces. The most recent jump was from $38 per thousand to $58 per thousand, effective this year, an increase of 35%. Robert Blum, board chairman of the National Society of Fund Raising Executives, predicts the increases will force nearly 10,000 of the 70,000 non-profit organizations to close. Further, it will increase overall costs, and the resulting squeeze will force blacks and other minorities out of the non-profit sector to find work in the profit sector, with the consequences of diluting the input of oppressed minorities in non-profit organizations.
It is important to note here that the astronomical increases in postage derive from the U.S. Post Office's being transformed into a private, profit-making organization. Accomplished in 1970 under the administration of Richard Nixon, the transformation of the Post Office into a private, capitalist enterprise has been a goal of the John Birch Society since the 1950s. According to Ralph Nader, first class postage alone has risen from six cents to 20 cents in the last 11 years. Now run by a Board of Governors with the power to override the Postal Rate Commission, the U.S. Post Office has become a private monopoly, immune to anti-trust prosecution and oriented to profit not public service.
Recent Internal Revenue Service attacks on non-profit magazines such as Big Mama Rag for the sexual content of its articles and muckraking Mother lories suggest, in fact, a political motive, since most of these magazines' articles criticize the status quo of capitalist U.S.A.
Further corruption of the tax-exempt, non-profit ethos is revealed by President Reagan's recent decision to permit schools practicing racial discrimination to obtain tax-exempt privileges. Despite President Reagan's assertion that there is "no basis in law" for refusing exemption to such schools, the Constitution itself forbids such discrimination. Further, there is a body of Supreme Court decisions and the previous policy of three Presidents that deny non-profit standing to racist schools practicing segregation.
As we prepare for the struggle of the 1980s, we must recognize that many of our most basic human and economic rights are, and will continue to be, subject to challenge by a Presidency that would repeal the social advancement of the past 50 years. The nonprofit sector is subject to such attack, and this instrument, along with the enlargement of human possibility its proper use offers, must be defended and advanced.
Source: The Black Scholar, Vol. 13, No. 1, The Black Elderly (January/February 1982).
ROBERT CHRISMAN, PUBLISHER