Monday, January 3, 2011

Tax Policy & Nonprofits

An article—Talking About Taxes, (pp.18-23)—in the current issue of the Nonprofit Quarterly tries to make the case that taxes should be raised to support nonprofits dependent on government, which instead makes the case of why government dependent nonprofits, especially those in the human service area, continue to fail.

Government does have a role in the nonprofit sector—encouraging and initial funding in some cases—but it needs to be a limited role rather than a permanent one.

The nonprofit sector works best when it remains true to its faith-based roots, expressed by Count Alexis De Tocqueville, who came to America in the early 1800’s, met with many of the founders and wrote one of the most perceptive books ever written about America. Here is but a small part of what he said about voluntary associations—nonprofits.

“Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small; Americans use associations to give fetes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools. Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France and a great lord in England, count on it that you will perceive an association in the United States.

“I have since traveled through England, from which the Americans took some of their laws and many of their usages, and it appeared to me that there they were very far from making as constant and as skilled a use of association.

“It often happens that the English execute very great things in isolation, whereas there is scarcely an undertaking so small that Americans do not unite for it. It is evident that the former consider association as a powerful means of action; but the latter seem to see in it the sole means they have of acting.

“Thus the most democratic country on earth is found to be, above all, the one where men in our day have most perfected the art of pursuing the object of their common desires in common and have applied this new science to the most objects. Does this result from an accident or could it be that there in fact exists a necessary relation between associations and equality?”

(Alexis de Tocqueville, Democracy in America, 2000 translation by H. C. Mansfield and D. Winthrop. pp. 489-490)