[Congressional Record Volume 141, Number 31 (Thursday, February 16, 1995)]
[Extensions of Remarks]
[Pages E361-E362]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    FACTS CONGRESS SHOULD NOT IGNORE

                                 ______


                        HON. ANDREW JACOBS, JR.

                               of indiana

                    in the house of representatives

                      Wednesday, February 15, 1995
  Mr. JACOBS. Mr. Speaker, when the Congress acts on factual 
information, it usually does a pretty good job.
  Here are some facts which Congress would be ill-advised to ignore.
Charities Cannot Fill the Gap That Substantial Cuts in Federal Funding 
                    of Social Programs Would Create

       We, the 116 undersigned organizations, urge you to consider 
     the following facts carefully and fully before taking any 
     actions that would make charitable organizations responsible 
     for filling the gap that substantial cuts in federal funding 
     of social programs would inevitably cause.
       Independent Sector is a national coalition founded 15 years 
     ago, comprised of over 800 voluntary organizations, 
     foundations, and corporate-giving offices with national 
     interest and impact in philanthropy and voluntary action.
       We are deeply concerned about suggestions, originating in 
     Congress, that charities fund a substantial share of some of 
     the social programs now financed by the Federal government.
       While we would welcome additional tax incentives to 
     stimulate private giving, the increase in gifts they would 
     generate--even by the rosiest projections--would do precious 
     little to offset huge cuts being suggested in the funding of 
     social programs.


    spending by charities on social programs is only a fraction of 
                          government spending

       Government spending on social welfare programs at the 
     federal, state, and local levels totals about $950 billion a 
     year. Charities as a whole--excluding only churches--spend 
     approximately three-eighths the sum of government outlays: 
     about $360 billion.
       Since the 1960s, charities and government agencies have 
     often worked as partners in addressing critical social needs. 
     In fact, charities receive roughly 30 percent of their 
     revenues--about $105 billion--from government sources.
       If governments were suddenly to stop their funding of 
     social programs through nonprofit charities, the $105 billion 
     cutback would amount to less than one-eighth of total 
     government spending of $950 billion. But if the charities as 
     a result were forced to cut their budgets by $105 billion, it 
     would amount to a drastic nearly one-third reduction in their 
     spending.
       Alongside the 30 percent of total revenues that charities 
     receive from government, they receive only 22 percent--about 
     $80 billion--from private contributions. To offset the loss 
     of all their government funding, the charities would have to 
     increase private gifts to 230 percent of present levels. To 
     offset the loss of half their government funding--$52 
     billion--they would have to increase giving to 165 percent of 
     present levels.
       Assuming that government agencies slashed their budgets for 
     direct funding of social programs as well as their $105 
     billion of indirect funding through charities, the charities 
     would be further burdened in trying to aid former recipients 
     of those direct government services.


charities will not be able to replace lost federal revenue and meet new 
                                 needs

       As for increasing private giving through tax incentives, 
     one major proposal--to restore the charitable deduction for 
     non-itemizing taxpayers--is expected to increase individuals 
     giving by only about $3 billion a year, or less than 5 
     percent.
       Recent trends in charitable giving offer little basis for 
     optimism. Government reports tell us that individual giving 
     from 1963 to 1993 rose an average 2.4 percent, or $2.6 
     billion, a year after inflation. But between 1988 and 1993 
     the average annual increase was only 1.2 percent. Including 
     contributions by foundations and corporations and individual 
     bequests as well as gifts of living individuals, the average 
     increase between 1988 and 1993 was still only 1.2 percent.
       While the percentage of American households giving to 
     charity has remained steady over the years at close to 75 
     percent, average household contributions dropped between 1989 
     and 1993 by a disturbing 23 percent after inflation. Likely 
     reasons were worries about the national economy and personal 
     financial security.
       Private foundations, which mostly make grants from their 
     endowment incomes, provide about $10 billion a year to 
     charitable purposes--a relatively small portion of total 
     charity revenues. Moreover, foundations tend to use grants as 
     risk capital to underwrite innovations rather than for 
     general operating purposes. Many must limit their funding to 
     special types of projects.


 higher fees and dues will put charitable services beyond the reach of 
                    those they are supposed to serve

       Charities receive about 40 percent of their revenues--
     double what they get from private giving and one-third more 
     than they get from government--through dues, fees, and other 
     charges. Relentlessly rising costs and dwindling government 
     revenues have forced many charities to charge more for 
     services, or start charging for formerly free services.

[[Page E362]]

       Charities cannot increase their charges above certain 
     levels, however, without putting their services beyond reach 
     of the very people whose needs they serve. Moreover, in some 
     sectors at least, efforts to begin or expand the sale of 
     related goods and services may encounter complaints from for-
     profit suppliers claiming unfair competition.


                               In Summary

       Certainly, charities and their donors will do whatever they 
     possibly can to increase gift revenues and services to 
     compensate for reduced government spending.
       But we can only do so much. We cannot begin to do it all.
       These are facts of life. We, the undersigned organizations, 
     urge you to take these facts carefully and fully into account 
     in your deliberations, decisions, and votes.
       American Arts Alliance, American Association of Museums, 
     American Cancer Society, American Foundation for Vision 
     Awareness, The American Indian College Fund, American Jewish 
     Congress, American Lung Association, American Social Health 
     Association, American Symphony Orchestra League, American 
     Tinnitus Association.
       Arrow, Incorporated, Arthritis Foundation, Association for 
     Healthcare Philanthropy, Association of Jesuit Colleges and 
     Universities, Battle Creek Community Foundation, The Boston 
     Foundation, Otto Bremer Foundation, California Association of 
     Nonprofits, Camp Berea, Inc., Camp Fire Boys and Girls.
       Cancer Care, Inc., CARIE (Coalition of Advocates for the 
     Rights of the Infirm Elderly), Catholic Health Association, 
     Catholic Social Serivce--Kansas City, KS, Center for Applied 
     Linguistics, Center for Community Change, Chesapeake Bay 
     Foundation, Children's Aid International, Church Women 
     United, The Community Foundation Serving Coastal, S.C.
       Compeer Inc., Compton Foundation, Council for Advancement 
     and Support of Education, Dance/USA, Direction Center, Grand 
     Rapids, MI, Donors Forum of Chicago, Epilepsy Foundation of 
     America, Eureka Communities, Evangelical Lutheran Church in 
     America, Maurice Falk Medical Fund.
       Families International, General Conference of Seventh Day 
     Adventists, General Federation of Women's Clubs, General 
     Services Foundation, Girls Scouts of the USA, Greater 
     Worcester Community Foundation, Alan Guttmacher Institute, 
     Holland Home, Grand Rapids, MI, Hudson--Webber Foundation, 
     Illinois Association of Non-Profit Organizations.
       Illinois Literacy Resource Development Center, InterAction,
        International Primate Protection League, Jewish Community 
     Centers Association of North America, Jewish Federation of 
     Metropolitan Chicago, Harris and Eliza Kempner Fund, 
     Albert Kundstadter Family Foundation, Lakeshore Lung 
     Society, Laubach Literacy, Leukemia Society of America.
       March of Dimes, Maryland Association of Nonprofit 
     Organizations, Mental Health Association in Texas, Mercy 
     Medical Airlift, Metropolitan Association for Philanthropy, 
     Minnesota Community College System, Nagle & Associates, 
     National AIDS Fund, National Asian Pacific American Legal 
     Consortium, National Association for Visually Handicapped.
       National Association of Homes and Services For Children, 
     National Association of Service and Conservation Corps, 
     National Benevolent Association, National Committee for 
     Responsive Philanthropy, National Committee to Prevent Child 
     Abuse, National Council of Catholic Women, National Council 
     of Churches of Christ in USA, National Council of Jewish 
     Women, National Council of Nonprofit Associations, National 
     Easter Seal Society.
       National Humanities Alliance, National Multiple Sclerosis 
     Society, National Neighborhood Coalition, National Resource 
     Defense Council, National Society of Fund Raising Executives, 
     National Wildlife Federation, National Women's Law Center, 
     Native American Rights Fund, NC Center for Nonprofits, New 
     York Regional Association of Grantmakers.
       Noble Centers, Inc., Nokomis Foundation, OMB Watch, OPERA 
     America, Options for Independence, The Park Ridge Center for 
     the Study of Health, Faith, and Ethics, People's Place--
     Milford, DE, The Pittsburgh Foundation, Recording for the 
     Blind, Inc., Research! America.
       School for Field Studies, Second Harvest, Stepping Stones-
     Morgantown, WV, Theatre Communications Group, The Union 
     Institute, United Church of Christ, Office for Church in 
     Society, United Way of Michigan, Warren Village, The Wesleyan 
     Church, Wichita Industries and Services for the Blind.
       Women's College Coalition, World Emergency Relief, YMCA of 
     the USA, YWCA of Chemung County, Elmira, NY, YWCA of the USA.
     

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