Abstract
AbstractThe Civil Society War involved powerful interests clashing over fundraising policies for 25 years. The United Funds coerced leading health agencies to join their federated campaigns. These health agencies insisted on independent fundraising campaigns to maintain awareness of their causes, volunteers, and funds raised. Through the 1950s and 1960s, the United Funds expanded their focus from social services by entering the health field. An important tactic in this conflict was the development of fundraising permitting regulations across the country. These regulations often included fundraising efficiency ratios, limiting the percentage spent on fundraising divided by the donations received. These fundraising efficiency ratios, along with permitting regulations giving preferential treatment to United Funds resulted in numerous lawsuits. Ultimately, the fundraising regulations were declared unconstitutional by the U.S. Supreme Court based on freedom of speech under the First Amendment and equal representation under the Fourteenth Amendment. While the courts struck down the use of financial ratios, these metrics continue to be used in rating charities. One positive outcome of the conflict was the development of widely used uniform accounting standards. The health agencies drove development of these standards as a way to address a legitimate concern among a barrage of criticisms of their practices influenced by the conflict with the United Funds. The Civil Society War had lasting impacts on three main areas affecting nonprofit policy: fundraising regulation, use of financial ratios in charity evaluation, and uniform accounting standards.
Highlights
Internal policies of organizations can inspire changes in public policies, especially when powerful, competing interests are involved
This paper examines how competing policies about charitable fundraising led to a protracted conflict, creating consequential impacts in fundraising regulation, use of financial ratios, and uniform accounting standards for charities
While other authors noted the Big Six agencies clashed with United Funds, this account details the cooperation of seven voluntary health agencies (VHAs) meeting as the ad hoc Seven Agencies Committee (Brilliant 1990; Seeley et al 1957; United Way of America 1977)
Summary
Internal policies of organizations can inspire changes in public policies, especially when powerful, competing interests are involved. The largest voluntary health agencies (VHAs) insisted on independent fundraising campaigns conducted by individual organizations. These competitive campaigns educated the public about their causes, attracted volunteers, and generated donations. The Civil Society War generated lasting impacts far beyond the organizations involved in the conflict Both the United Funds and the group of VHAs meeting as the Seven Agencies Committee played instrumental roles influencing public policy and shaping public opinion about their causes. The Civil Society War was an important conflict shaping fundraising regulation, popularizing the use of financial ratios in the evaluation of charities, and developing uniform accounting standards for charities
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