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It’s Time To Bail Out The Non-Profits |
As the nation continues to muddle through the bailout mess, a new idea is emerging for how to channel government funds directly to those in need: a bailout of the non-profit charitable organizations. A non-profit rescue plan avoids many of the pitfalls of the corporate bailouts:
(1) No greedy executives demanding $10 million bonuses or flying around on luxury private jets even as their companies go bankrupt.
(2) No outlays of $450 million of taxpayer money to name baseball stadiums after failed corporations.
(3) No questions of whether the bailout money is actually being used or is just being set aside as an investment.
As one non-profit expert puts it, let’s give the money to people that deserve it and that we know will do good things with it:
Nonprofits are now not only facing financial shortfalls … they are trying to deal with the increased demand for services in communities across the country. These nonprofits are not in this financial position due to greed, bad management or poor investments. Rather, they are part of the fallout of the current economic situation we all are suffering from today.
It was reported in the Chronicle of Philanthropy that “Independent Sector, a coalition of charities and foundations, is working on a proposal for a government revolving-loan fund to help cash-strapped nonprofit groups respond to growing caseloads as the economic crisis takes its toll.”
But as it appears that the economic crisis will get a lot worse before it gets any better, it seems that a bridge loan program will be insufficient. Without direct cash handouts like the ones that have been made to the financial sector, many if not most non-profits will be looking at extinction in the coming months and years - especially the small, local charities that don’t have much in the way of endowments or cash reserves.
There are approximately 300,000 operating public charities in the United States. $700 billion (the amount of the original bank bailout) divided among these would mean $2.3 million each. More realistically, just $10 billion dedicated to a non-profit bailout could give a million dollars each to the 10,000 charities that need help the most - with a priority on those that meet basic needs such as food, shelter, healthcare, and clothing. As the estimates of the total bailout figure reach $7 or 8 trillion, what could possibly be the objection to giving a very small fraction of that amount to help those who are suffering most from this crisis?
(cross-posted at Discipline for Justice)








