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, much of charity is aristocratic and elitist, and built on a raw deal.
To spur civic progress, lawmakers give tax breaks to donors.
Donors create foundations, take their tax breaks up front, and leave philanthropic dynasties for their heirs.
Treating as their own wealth they did not create, 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 embrace as holy writ the idea that they must exist forever, and treat the 5 percent payout as a sacred “third rail” fatal to those who try to alter it.
If forced to pay more, they warn, 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.