Taking a stand

By Todd Cohen

A panel advising the Senate Finance Committee has a rare chance to help charity retool itself.

In its initial recommendations on nonprofit openness and governance, and government oversight, the panel has played it safe, calling for long-overdue rules, for example, on conflicts of interest and on donor-advised funds.

Now, turning to tougher issues like the need for charities to disclose performance results, and for rules on compensation, administrative expenses and disclosure of investments, the panel must move beyond philanthropic correctness and political timidity and predictability.

To help charities be as ethical, effective and innovative as possible, the panel must be bold and push Congress to:

* Set strict rules, enforced with stiff penalties, on staff and board conduct, compensation and connections.

* Require charities to measure, report on and share data about their performance and investments.

* Increase the share of assets foundations must pay in grants.

* Give charities more room to shape public policy and pursue social enterprise.

* Give volunteers tax breaks for time they contribute.

If it fights for true change and more effective regulation, the panel can help charities justify their tax-exempt status, remain independent, restore trust, secure resources and do a better job.

Todd Cohen is the Editor and Publisher of the Philanthropy Journal.

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