Safety Net Must Be Kept In Place

Once again, charity stands as the proposed replacement for federal safety net programs and the nation’s rapidly eroding commitment to modest redistribution of income through the federal tax code.

But can private charity fill the funding gap that will be left if Congress implements its drastic seven-year plan to eliminate the federal budget deficit?

Charities throughout the country are saying, “No, we can’t.”

And yet, House Speaker Newt Gingrich, R-Ga., keeps saying, “Yes, they can,” again and again.

What is ironic, if not symbolic, is that Gingrich doesn’t put his money where his mouth is.

Every fall, the government conducts the Combined Federal Campaign among its employees to collect contributions for tens of thousands of charities nationwide.

The regular governmental units initiated their campaigns this September, as usual, and the Senate has completed its campaign. However, the House of Representatives, led by Gingrich, has yet to even start its charity drive.

Under the budget plan passed by Congress and sent to the White House in late November, federal spending for grants to state and local governments, as well as for Medicare, would be reduced by $622 billion between 1995 and 2002 compared with funding levels under current law, according to the Center for Budget Priorities and Families USA Foundation. In California, the cuts would amount to $64 billion.

Non-profit charities are active in helping governments carry out many of these programs, such as education, community development, housing, job training, social services, Medicaid, child nutrition, foster care, adoption and disaster assistance.

Looking at what charitable giving must total to make up for these government funding losses gives one a migraine headache.

Over the past seven years, charitable giving has grown from $98 billion in 1988 to an estimated $137 billion this year, a 39 percent increase. Similar growth over the next seven years would produce a figure of roughly $190 billion in 2002, the year the federal budget is supposed to be balanced.

Cumulative growth over those seven years amounts to $170 billion, little more than a quarter of the $622 billion in federal budget cuts discussed above.

And we haven’t even considered reductions in food stamps and some other direct federal spending programs, which aren’t funneled through state and local governments.

Put another way: To make up for the proposed congressional cuts, charities would have to expand their contributions from $137 billion in 1995 to $759 billion in 2002, a 454 percent increase in just seven years.

This would be equal to annual increases of 65 percent, an utterly outrageous proposition. The biggest yearly increase registered over the past 30 years was 14.7 percent in 1986; the average is 7.8 percent.

Some people might expect private and community foundations and corporations to take up the slack. But this is even more of an impossibility.

These entities gave out a grand total of only $16 billion in 1994. They, too, grew only 40 percent between 1987 and 1994, the most recent period for which data are available.

Even with a bullish stock market expanding foundations’ and corporations’ donation capacities, we couldn’t expect them to grant but an additional $25 billion to $40 billion over the next seven years.

Corporations are not an answer unless they become far, far more strategic in their grant-making.

In the ‘80s, it was Ronald Reagan who popularized the notion of “public-private partnerships.” For the past 30 years, we have had just that - a partnership between government and charities in providing vital services for our citizens.

The charities are running hard to keep up with their end of the partnership. To prevent a catastrophe, the government must keep up its end as well.

But, apparently, Gingrich and his radical conservatives don’t even believe in Reagan’s “partnership theory.”

And they probably don’t really expect charities to fill the gap left by federal program cuts. They simply want to cut the budget and use whatever fig leaf they can find to cover their exposed parts.

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