By Todd Cohen
Charity is cruising for trouble.
Fed up with its excess and arrogance, lawmakers and regulators are cracking down.
Charity can help shape regulatory change that is coming, but first it should take a long look in the mirror.
Fancying itself democratic and populist, charity is aristocratic and elitist, and built on a raw deal.
To spur civic change, lawmakers give tax breaks to donors.
Donors create foundations, take their tax breaks up front, and leave philanthropic dynasties for their heirs.
Treating wealth they did not create as their own, and confusing it with wisdom, foundations exercise virtually unchecked privilege and power.
Taxpayers get little in return for footing the bill for those up-front tax breaks and self-perpetuating philanthropies.
Foundations must pay only 5 percent of their assets in grants each year, and invest the remainder.
Many foundations also hold as holy writ the idea that they must exist forever, and treat the 5 percent payout as a sacred “third rail” that cannot be touched.
If forced to pay more, they argue, they will go out of business.
With lawmakers and regulators on the warpath, foundations should honor the social bargain they enjoy by investing a lot more to make change happen now.