Ethics vital to effective charity

By Todd Cohen

The monopoly that controls philanthropy is betraying its ethical roots.

Touting its good intentions, the philanthropic-industrial complex is fighting moves to toughen charitable regulation and enforcement.

With few obstacles, donors now can park their wealth in charitable foundations, take big up-front tax breaks, and dribble out grants each year while hoarding most of their assets.

The wealth that foundations and donors control gives them power, letting them shape the operations and focus of charities needing support.

Reinforcing that power are consultants and trade groups feeding at the cartel’s trough.

Tougher rules and policing are needed to free the charitable marketplace from manipulation, and to prevent bad behavior by charities that treat other people’s money as their own.

Organized philanthropy claims it can and should police itself, but what it really wants is weak oversight that leaves the charitable marketplace in its grip.

So who you know, and how well you pander, replace merit and promise as the basis for funding.

A competitive marketplace governed by rules that are fair, tough and enforced with an even hand is far more likely than unchecked philanthropic power to produce charities that are ethical and effective in taking on serious social problems.

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

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