Senator Encourages Foundations to 'Step Up and Help' Charities

From The Chronicle of Philanthropy, January 29, 2009 — As Independent Sector and other nonprofit associations in Washington push Congress to help cash-strapped charities, at least one key member of the Senate is resisting the move.

In a statement to the news media, Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, said that charities should seek support from foundations and other donors before asking for financial aid from the government.

“I don’t like to see any segment of our economy, including the nonprofit sector, have a hard time getting credit. Private foundations, donor-advised funds, and other grant-making charities are already set up to make payouts and even loans, if they want to, with an oversight structure already in place,” he said.

“They have to do oversight of their grantees when they give grants to make sure the grants are being used for their intended purpose. Instead of reinventing the wheel with a new layer of government loans, I’d like to see these charities step up and help their fellow tax-exempt groups. That would be more efficient and without more government involvement, which charities usually dislike.”

Independent Sector, which represents about 600 nonprofit organizations, wanted Congress to include a $15-billion bridge-loan fund for charities in the economic-stimulus proposal. (See a Chronicle article about the credit challenge facing many charities.) So far, the Senate and the House of Representatives have not included such a fund in their legislation to bolster the economy.

An aide to Mr. Grassley told The Chronicle that another Independent Sector proposal — to make the foundation excise tax a flat rate of 1 percent — is unlikely to be in the stimulus bill as well.

— Ian Wilhelm