How will the new administration and its policies impact the Nonprofit sector?

I recently attended the ARNOVA Conference, the annual conference of ARNOVA, a leading organization that is dedicated to research of the Voluntary and Nonprofit sector. As one of the most important convenings of its kind; this conference brings together both scholars and practitioners from around the world.

This year, there were close to 1000 attendees, from around the world. As someone who pays attention to this sector, I was interested in documenting some of the key changes that one can expect in the coming year, with a Trump administration. What would the sector look like, in the coming year and what factors would contribute towards that? Here are some key points, based on a conversation that took place between three leading practitioners/ observers of the sector :

  • The changes in the Affordable Care Act – or Obamacare – as it is popularly known will impact all levels of government, both local and federal. As the Council on Nonprofit’s Tim Delaney pointed out, this is one of the biggest shocks that may hit the system. Depending on how the Obamacare is rolled back, this may mean that states have to pay up more of the Medicare funds etc. and any moves at the federal level can trickle down to the state and local governments
  • The second key point is that ‘repealing the estate tax and capping itemized deductions at $100,000 for individuals and $200,000 for couples.’ This, according to one analysis, ‘would cause charitable giving to decline by between 4.5 percent and 9 percent, or as much as $26.1 billion per year.’ This is a significant change, if it occurs.
  • Nonprofit Electioneering Ban : As the NCNP argues, the ‘Johnson Amendment’ that prohibits 501 c 3s from engaging in political campaigning may be lifted, as that is one of the promises made by the Trump administration.

As Stacey Palmer of the Chronicle of Philanthropy pointed out, there may be more introspection on part of nonprofits and scholars, in terms of what nonprofits can do and their limitations. The public may get swayed by rhetoric that nonprofits can fix all problems, but that is simply not true, she warned; pointing out the severe resource constraints that many nonprofits work under.

So, what will the new administration bring, that will shake up the sector?  potentially quite a few changes, but one can hope that these are not deleterious to the sector or the people that it serves.

Is the ‘American mythos’ in need of revision?

I am writing this on the second day of election results, that have shaken the country; rather badly. With the election of Donald Trump, Washington D.C., is in mourning. It looks and feels like almost all of the country is at the precipice of something. Mainstream media are still coming to terms with what this means. While the pundits speculate and those who have won celebrate, the question that seems to be at the back of everyone’s mind – and this is a very serious one – is whether the U.S. will stop being a ‘land of opportunities.’ By this, most people mean an inclusive society, where everyone stands a fair chance of succeeding, despite one’s origins, social status or religious beliefs.

At first glance, it looks like everything that the progressives fought for is at stake. There is enough empirical proof for this fear. Consider this : In his memo, Mr. Trump has indicated that he will scrap all ‘unconstitutional Executive Orders’ of President Obama in his first 100 days. In addition, he has also indicated that he will ‘remove criminal illegal immigrants’ and ‘suspend immigration from terror prone regions’ meaning putting an end to the refugee resettlement plans. Also, significantly, he has promised to cancel payments to the UN Climate Change plans.

Statue of Liberty seen from the Circle Line ferry, Manhattan, New York
source : https://upload.wikimedia.org/wikipedia/commons/d/d3/Statue_of_Liberty,_NY.jpg

While each of these will impact an area of American public life, what is at stake is ultimately how Americans define who they are and the ‘myths’ that uphold their sense of identity. As Robert Wuthnow points out in his book  American Mythos, the myths of American being a ‘land of opportunity’ that gives everyone a fair chance is true only because a lot of people ( if not all) believe in it, and work to make it possible. If there is a seismic shift in this attitude, and there is great skepticism and nationalism – combined with isolationism – as we are seeing globally, with Brexit and the recent reaction in the US Elections, then this myth may well be no longer believed.

In this interview, Wuthnow offers an insight into materialism and immigration. Using the perspective of materialism among immigrants, he suggests that the sense of hardship and sacrifice were part of their narratives.  These narratives helped shape their immigrant identity. There seems to be a clash of narratives taking place now. With the rise of a nativist narratives, that are defining America being only a place for caucasians?  The blatant racism that was on play during the election seems to be playing out, with increased incidents of racist attacks, as several media are reporting – across the country.

The narratives of migration, opportunity and freedom have defined America. If these shift in a major way, then everything that the country stands for will also change. We are already witnessing isolationism, nativism and protectionism in Europe and other parts of the world. Is this a trend that will catch up in the U.S., as well?

While it is too early to say how the next four years will shape up and what it would mean, for immigrants and others; who see the U.S. as their home; one can see that the meta-narratives about what the U.S. is, and what it stands for, is changing.

While there is no need to panic, I do believe it is time for right-thinking people to reexamine how the current political scenario will impact all Americans – whether they are Republicans or Democrats.

There is certainly need for more dialogue, tolerance and open mindedness on part of everyone. But the ball is certainly in the Republicans court. Given that the administration is going to be run by Mr.Trump’s side, and much of the rhetoric that has caused division has come from that camp, it falls on them to reach out and heal the wounds. It falls upon Mr. Trump to also be Presidential and stand up for what makes America a great nation – tolerance, openness, inclusiveness and creativity. To ignore this and to remain silent while his supporters create fear and intolerance would be betraying the very values that made his success possible.

 

 

If not for profit, for what?

nonprofit

I sat next to an older gentleman on my flight from D.C. to Atlanta, GA. While he was quite in the beginning and was absorbed in his newspapers, a quick smile and conversation started him talking. And despite his strong southern accent – he was from Alabama – we managed to discuss a lot of ideas on this short trip.

One of the first things he said when I pointed out that I was working in the nonprofit sector was that it’s all a sham. “It is all about tax write-offs, ultimately, someone has to pay for all that service.” He argued.

While I do meet the occasional Libertarian, who brushes off all feel-good work of nonprofits as just instances of market catallaxy, or the ‘entrepreneur’, who quite genuinely scoffs at the idea of the nonprofit being a sector, the truth is that about 10 percent of Americans are employed in this sector and it is one of the most enduring parts of American work-force and cultural landscape. Nonprofits today are growing and thriving, if anything. There is no denying that this sector is important and worthy of our attention, even if we don’t believe in how it operates or its assumptions.

This conversation brought to mind the famous book by Dennis Young, ‘If not for profit, for what’?  In this book, he has argued for a behavioral theory of studying the nonprofit sector.  In terms of framing the study or discourse of nonprofits, young suggests that the demand side of nonprofits has been studied quite extensively, i.e, how nonprofits provide public goods as studied by Burton Weisbrod and as providers of ‘trust goods’ as offered by Henry Hansmann – where nonprofits ‘asymmetric information led consumers to prefer nonprofits over less trustworthy for-profit providers.’ What this means is that there is a market-gap in most areas, where consumers/ citizens don’t have access to the best information and in the absence of that, for-profits would – given their motivation to make as much money as possible- make use of this gap. On the other hand, a non-profit, which has a service motive is not likely to indulge in this sort of behavior.

Young offers an explanation that the ‘supply’ side of nonprofit behavior has not been extensively analyzed and this can help understand the motivations for why people work in this sector and why it even exists. He uses entrepreneurship as a motivating factor to understand the sector. His framing of the nonprofit sector leadership and motivations as ‘entrepreneurship’ is key to our discussion. Most nonprofit leaders and organizations are trying to solve some social problems for which there is no market solution. Or if there is, it is too expensive or exclusionary.

As Peter Frumkin, writing in this book suggests “The value of his (Young’s) early contribution was and continues to be his focus on the way the values, personal traits, and skill sets of individual entrepreneurs are a useful starting point in understanding where nonprofit ideas and organizations originate.”  By this means that the focus of most scholarship and discourse has been on why market failure has been responsible for the rise of nonprofits, while there hasn’t been much focus on the supply side – meaning why individuals do what they do, in the context of social organizations and institutions. The study of values, motivations and drives is key as well. This also explains the rise of the civil society sector in the U.S., which Alexis De Tocqueville wrote about, in Democracy in America.

Back to the question: if not for profit, then for what? The answer to this lies in both normative and philosophical dimensions. Sometimes profit is not the key motive. It could be service or the desire to make a difference. The motive to serve public and do ‘good’ is inherent in the social sector, of which nonprofits are a part. This also means that we need to take into account other motives, other than pure profit motive, that drives individuals to serve and work in these forms of organizations. The market and government cannot provide all answers to questions before us, hence the need for nonprofits.

The Anatomy of Arrogance: How to understand the Donald Trump phenomenon

Pride is one of the cardinal sins, but in today’s America it seems to have  become a virtue. If Donald Trump’s rhetoric is anything to go by, and the reaction he is getting from his ‘fans,’ then this ‘sin,’ seems to be the way to win elections. In the language of culture studies, this absolute belief in oneself and one’s values, to the exclusion of others has been called ‘expressive individualism,’ by Robert Bellah, the great American Sociologist.          Expressive individualism means that the primary value that needs to be satisfied or fulfilled is the ‘creative self within.’ This means that all other obligations to others need to be subordinated to this urge. One can easily see how this can run into problems, with others – the family, community – which one is part of.trump

The paradox is : How is such vitriol gaining followers and traction? Are the American voters so unsure of themselves that they will fall for the slightest show of confidence – even if it is based on arrogance of power and wealth – and no real substance?

Trump’s self-declared values – in hard work, entrepreneurship, leading from the front, winning at all costs etc. – make him believe in his own individualism much more than any obligation or duty to anyone else. This extreme manifestation of his personal values in the public space is causing a lot of angst. Combined with extreme arrogance and racism (some have called it xenophobia) we have a deadly cocktail, which seems to be gaining traction.

We may actually have to rely on some scholarship, a bit of conjecture and ultimately, the actions of Mr.Trump to understand the phenomenon that is manifest before us. It is shocking, to many Americans that he is leading the polls, according to this article on CNN. The article points out that “Trump secured 17% support, according to the Suffolk University/USA Today survey. Former Florida Gov. Jeb Bush garnered 14%, while the rest of the 2016 field remained in single digits.” This puts him ahead of many veteran politicians. During the interview, he argues that no one is listening to Republican leaders such as Lindsey Graham and it is reported that the top Republican brass is already concerned that Trump is causing damage to the party.

But the question still remains: Why is this mode of expression so vastly popular – if Donald Trump’s popularity is any indication that it is so? I would hazard a guess that this reflects the current mood in the U.S. – the country is very slowly recovering from a recession. The world is chaotic – each time one turns on the T.V. or social media – one is bombarded with bad news and gloom and doom scenarios- both domestically and internationally. The fact that lobbies are pushing their own agendas, to twist news to their advantage, is another issue. Very few people have the ability to sift through all the noise in media and make sense of what is actually ‘true.’ Besides, we live in an age where ‘truth’ is contested, and rightly so. But we seem to be living in an age, where there is so less certainty about anything. And amidst all this chaos, the American population is shown promise of a better future, stability and ‘security,’ the great myth that has come to dominate American public imagination.

Who wouldn’t want some more security, a better job and a president who seems to want to make America the ‘greatest country in the world.’ Trump is tapping into not just the insecurities that Americans face, but also the core of American exceptionalism, a fact that he openly embraces. He is also someone who represents corporate America and its suspicion of ‘big government.’ This goes well with the Tea Party, Libertarian and other constituents. So, in that sense, Mr.Trump is offering hope, but with a lot of ‘vitriol,’ as Jeb Bush characterized his rhetoric.

My own analysis of what will happen with Mr.Trump’s campaign: As much as he seems sure of himself and his campaign, I think the Trump campaign will burn out, before he reaches the final round of primaries. He is pissing off too many people in the party, to earn any credibility, even to be nominated as a candidate; much less become the President of the United States.