STEVEN MALANGA: Charities on the Dole


.. Like many charities, FEGS’s mission began to change more dramatically with the rise of government-funded social services, starting with President Lyndon Johnson’s War on Poverty.

… Today, FEGS is essentially a government contractor—in some ways, virtually indistinguishable from government agencies. The organization’s 2013 IRS filing, for instance, lists $227 million in total revenues—including $93 million in government grants and $119 million in program revenues, much of it from providing services funded by public-sector programs like Medicaid. By contrast, fund-raising events and nongovernment grants and contributions brought in just $1 million and $4.3 million, respectively.

… During the late 1990s, Catholic Charities USA opposed congressional efforts to slow federal welfare spending by instituting work requirements for recipients. At the time, the Catholic philanthropy was receiving almost two-thirds of its revenues from government to run social-services programs, prompting Senator Rick Santorum to observe that the organization “can do little that is uniquely Catholic. They have to do what the government dictates.”

… Groups such as FEGS and Catholic Charities wind up chasing public contracts for programs designed by government bureaucrats, rather than responding to charitable directives generated by their community.

… About two-thirds of FEGS employees were members of a government union—the American Federation of State, County and Municipal Employees (AFSCME)—and some of the nonprofit’s pay practices reflect the kinds of questionable arrangements often found in the public sector.

… The communities that once supported these groups now have less of a stake in their performance.

… For religious-affiliated nonprofits, the problem goes beyond the question of oversight. To what extent does government money ultimately undermine their mission?

… And increasingly, aggressive politicians use government money to bully groups into adopting policies contrary to their beliefs.

… The courts have already forced the Salvation Army to alter its hiring practice for programs that receive government funds—the organization can no longer give employment preference to evangelical Christians for such programs.

… Tired of the pressure, some groups, like Catholic Charities in Tulsa, Oklahoma, have withdrawn completely from accepting public funding.
(Note: Might be good to interview this group)

… Sooner or later, charities will have to choose between the lure of government money and fidelity to their stated mission. But FEGS won’t be around when that day of reckoning comes.