The Crisis of the Non-Profit Sector

Abstract

The non-profit sector of U.S. cultural and social life is facing a crisis of major proportions, as we enter the inflation-ridden 1980s and a reactionary political climate. Blacks are especially affected by the crisis in the non-profit movement. The non-profit sector is overwhelmingly composed of social welfare, educational and humanitarian organizations. The NAACP and other civil rights organizations are non-profit; the ACLU, AMNESTY INTERNATIONAL and related human rights groups are non-profit, as are countless community organizations such as The National Black United Fund that focus on matters such as rent control, programs for the elderly, welfare rights, educational and tutorial programs, food and nutrition programs and legal rights. At the beginning of the 20th century, the non-profit, tax-exempt designation was intended primarily to protect the interests of enormous capitalist enterprises such as those developed by the Carnegie, Mellon, Rockefeller, Morgan and Vanderbilt families, against new tax laws and restrictions. Corporations were permitted to transfer their surplus capital into non-profit, tax exempt corporations (often bearing the same name). Thus transferred these monies could not be taxed, nor could they be used to generate profit. Instead, a portion of the endowment had to be used for philanthropic and humane activities. Finally, non-profit tax exempt organizations were banned from specific action of effect passage of particular legislation, or election of specific candidates. In exchange for this behavior, non-profit corporations were permitted lower postage rates, freedom from state and federal taxes. Donors to said organizations would receive tax exemption for their gifts. Many mainstream 20th century organizations are non-profit, such as the Boy Scouts, YMCA, United Way and charity groups. Because of their intimate linkage with the resources and values of monopoly capitalism in the U.S., their funds are not in significant peril. However, in addition to such groups, there has emerged in the last 30 years a network of non-profit activity that is devoted to various causes often imperiled by the inequalities and improprieties structured into capitalist society: minorities, women, consumers, the elderly, tenants, artists, conservation, birth control, abortion and similar groups and issues. There are two halves to the non-profit sector, one half representing and prospering from the status quo, and the other half, of a corrective nature, addressing itself to rights and issues that are too controversial and too unpopular for consideration by legislators, executives and political parties of an establishment characterized by white supremacy and male chauvinism. What has emerged is a kind of people’s democracy in which education and advoSource: The Black Scholar, Vol. 13, No. 1, The Black Elderly (January/February 1982).