Separation of Faith and State

Now that the Senate has rejected Obama’s proposal to limit the deductibility of charitable contributions, an even greater aid to charities would be the abolition of the White House Office of Faith-based and Neighborhood Partnerships.

Ever since at least 362, when the Emperor Julian tried to establish pagan charities by decree in an attempt to counter the growing popularity of Christianity, rulers have recognized that faith-based providers are by far the most effective in helping people in need. Yet there is good reason why our Founders stipulated a separation of Church and State: contrary to common belief, it has far more to do with protecting the Church from the corrupting influence of the State than vice versa.

Here’s why Christians especially should lead the cry to get government out of charity:

It’s ethically wrong to accept money not voluntarily directed to a charity
Even those not ready to join the libertarians in viewing taxation as theft can understand the moral repugnance of having your money used for a cause anathema to you: from right-to-lifers opposing government funding of abortions; to peace lovers protesting their taxes going to fund wars.

Government funding of charities alienates charities from donors
As Arthur Brooks’s excellent book Who Really Cares has shown conclusively, when government largesse flows in, charities lose touch with the private donors they had previously relied on. Studies show that charitable organizations receiving public funding spend less effort fundraising: staff focuses on managing and spending the government funding, and spends less time and effort on cultivating and maintaining relations with private donors.

The ramifications of this are enormous: private donors serve as a very effective check that the services being offered are those most needed in the community. Most donors require frequent and persuasive demonstrations that their money is being used effectively and efficiently. Competition for private funding thus keeps the non-profit constantly on the alert to make sure its programs are the best for today’s needs.

Government funding can corrupt mission and skew programming
While government funding might have first been obtained by a charity for a program closely allied to its mission, the usually extended continuation of that funding can tie the charity to providing services that are no longer the most effective or even the most needed. Government funding also carries with it narrow restrictions that often have nothing to do with who actually needs services: as an example, the federally-funded Meals on Wheels program has a mandated age 60 minimum. When the San Francisco Salvation Army was cut off from receiving government funding, which included its contract for providing Meals on Wheels, it reinvented it as “Meals That Heal.” The privately-funded Meals That Heal not only provides nutritious meals to seniors, but also delivers to low-income younger people homebound by diseases such as HIV/AIDS.

Government funding of social service programs operated by faith-based organizations also stipulate that the money cannot be used for religious activities. Yet experience shows that programming with a religious component often achieves far higher success rates than those without, especially, for example, with substance dependency.

Government funding creates dependency
Public funding is more volatile than private, and increases and decreases more than changes in the economy. When the political winds change and the funding gets redirected elsewhere, a charity that has become dependent on its public largesse can find its very existence in danger. In contrast, those of us with a broad base of private support can meet economic vississitudes appropriately. Independence from any one donor also allows us to adhere to principle, not kowtow to the holder of the purse strings.

Government funding crowds out private giving, and separates the “haves” from the “have-nots”
When government gets involved in a formerly private charitable activity, money going to charity drops. As I detailed here, the government’s new AidMatrix Foundation channeled massive amounts of funds to FEMA and state governments in the aftermath of last year’s hurricanes, and private giving to the Salvation Army and Red Cross plummeted. In a worst-case scenario, such government activity will drive private alternatives out completely, as with the hugely inclusive mutual-aid societies that traditionally provided welfare, unemployment and health care coverage before government programs made them untenable.

As people perceive that government is taking care of a need, their giving and volunteering for that purpose dries up. But inserting government between the “donor” (taxpayer) and recipient severs the personal relationship that used to be common between them. As Alexis de Tocqueville observed in his marvelous book Democracy in America, Americans’ proclivity for forming innumerable privately-funded charitable and civic projects was a direct and vitally-important component in what he termed our “democracy,” but we would more commonly call “equality.” Those of us who volunteer with charitable organizations quickly discover that there is very little difference between ourselves and those we are volunteering to help (“There but for the Grace of God, go I”). But when your money is separated from your personal involvement, it becomes far easier and more common to think of the recipients as a faceless “them.”

If lawmakers really want to help the poor and suffering, they should go beyond last week’s refusal to cut tax breaks on charitable contributions, and let taxpayers keep more of their own money in the first place: experience shows that when tax rates are lowered, contributions to charity increase.

Mary L. G. Theroux is Senior Vice President of the Independent Institute. Having received her A.B. in economics from Stanford University, she is Managing Director of Lightning Ventures, L.P., a San Francisco Bay Area investment firm, former Chairman of the Board of Advisors for the Salvation Army of both San Francisco and Alameda County, and Vice President of the C.S. Lewis Society of California.
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