Five Threats to Philanthropic Freedom in These Recessionary Times

by Jeffrey Cain

THE GENEROSITY OF INDIVIDUAL AMERICANS is the envy of the world. No developed country even comes close to the amount of time that Americans volunteer or the amount of money Americans give to charity. Within eight days of Hurricane Katrina, Americans had donated over $580 million to relief efforts, and within 15 days of the earthquake in Haiti, Americans had donated $528 million, according to the Chronicle of Philanthropy. Collectively, Americans gave over $308 billion to charity in the recessionary year of 2008. We are uniquely, even congenitally, generous. When it comes to philanthropy, something has gone gloriously right in the United States.

Yet one would hardly know this from the litany of grievances and regulatory proposals now emanating from activists, politicians, and philanthropic bureaucrats. Recent years have yielded bumper crops of reports, legislative efforts, and pleas calling for greater oversight, transparency, and governance of America’s independent charitable sector. In different times, these complaints might be brushed aside as the perennial chatter of self-proclaimed and self-serving advocacy groups. However, as the effects of the recession linger—widespread unemployment, soaring deficits, budget shortfalls, and popular dissatisfaction with elite institutions—long-held grievances against private philanthropy may find a more receptive ear, especially given Washington’s reform-minded political ethos.

From the proposed decrease in the charitable tax deduction to greater government intrusion into the operation of private foundations, there are numerous ways in which philanthropic freedom is now in jeopardy. In particular, five ideas and trends threaten to undermine America’s status as the most generous country in the world.

1. Regulating Philanthropy Through Identity Politics

Last March, the National Committee for Responsive Philanthropy (NCRP), a national advocacy group, issued a report with benchmarks for assessing private foundation performance. The report counsels foundations to provide, among other things, “at least 50 percent of its grant dollars to benefit lower-income communities, communities of color and other marginalized groups.” A foundation should also give “25 percent of its grant dollars for advocacy, organizing and civic engagement to promote equity, opportunity and justice within our society.” While the NCRP prescriptions are voluntary, the report warns that more government regulation will come if foundations “don’t do a better job of regulating themselves … and if more grantmakers don’t demonstrate their relevance to nonprofits and marginalized communities by meeting the benchmarks set forth in” the report.

The NCRP report came on the heels of a much-publicized effort by a California advocacy group named The Greenlining Institute to use the threat of legislation to dictate the activities of private foundations. Greenlining sought to pass state legislation that would have required foundations to report the percentage of their grants that go to minority-led groups. The proposed legislation (AB 624) also mandated that foundations report the percentage of their boards and staffs made up of racial and ethnic minorities. When a handful of the state’s largest foundations agreed to support Greenlining-backed charitable organizations with $30 million in grants, the legislation was dropped and Greenlining backed down … sort of. The organization’s director, Orson Aguilar, quipped after the settlement: “That’s a good start, but the money isn’t a substitute for legislation.”

Using the threat of legislation to bend private foundations to activists’ wills may turn out to be more successful than actual legislation in the present economic and political climate. That is because the court of public opinion may provide a better venue for radicals’ grievances than the legislatures or courts—especially since the two principal claims of NCRP and Greenlining are so obviously false and contrary to law.

NCRP and Greenlining both claim that minority interests are better served by philanthropy when giving is directed and received by minorities, as though the benefits of privately funded cancer research, disaster relief, or higher education accrue only to Caucasians. Everyone, regardless of race or ethnicity, derives public goods from grants made by private foundations to America’s civil society institutions. Indeed, The Philanthropic Collaborative recently found that more than “two out of every three dollars of all health grants made by foundations benefit low-income and minority communities.” Private philanthropy is one area of American society that, without heavy-handed government mandates directing grants, can make a reasonable claim to being colorblind.

NCRP and Greenlining also falsely claim that because gifts to foundations are tax-advantaged, the government and the public ought to have a say in directing where the money goes. According to this argument, the government should also decide how individuals spend their tax-advantaged retirement savings. Or perhaps the mortgage-interest deduction entitles the government to dictate what a person does inside his or her home?

The notion that individual donors and foundations, not government, legitimately determine the scope and nature of their giving is well-established law. As Evelyn Brody and John Tyler conclude in their excellent monograph How Public Is Private Philanthropy?, “based on four centuries of law and policy, foundations and other charities are not inherently public bodies and their assets are not ‘public money.’” The excellence of American philanthropy derives precisely from the fact that individuals can choose freely for themselves the causes, ideas, and organizations they wish to support or not to support. As Naomi Schaefer Riley has put it, “The distinctive characteristic of American philanthropy is freedom.” NCRP and Greenlining would turn this on its head by dictating the terms of private giving.

With research support from NCRP, Greenlining is now turning to other states—including Florida, New York, and Pennsylvania—to push their notion that private foundations should conduct their business based upon narrow racial and ethnic criteria, and that state governments ought to pass laws to enforce this idea. Will a prolonged economic downturn provide more fertile ground for their arguments? Aaron Dorfman, executive director of NCRP, is counting on it. Referring to the present economic malaise, Dorfman writes: “A crisis of this level compels us to consider new, sometimes radical, solutions.”

2. Reducing or Eliminating Tax-Advantaged Giving to Private Foundations

With the estate tax having expired at the end of 2009 and with the prospect of it automatically renewing at the end of 2010 at 55 percent with a $1 million exemption, Congress may look to private philanthropy to find offsets. CongressDaily reported in February 2010 that “Senate aides are quietly exploring ways to tax the massive wealth tucked away in charitable foundations, which backers say could serve the twin goals of raising revenue for an estate tax solution and triggering overdue reforms in the nonprofit sector.” Reducing or eliminating altogether the deduction on assets placed into private foundations could provide part of the solution. Family foundations administered by their founders’ heirs and funded by contributions that avoid the estate tax may also be a target. Likewise, eliminating the deduction on donations to “charities that are created by wills or trusts at death” may be an attractive estate-tax alternative.

From an economic point of view, penalizing individuals for contributing to foundations by assessing new taxes on their giving is exceptionally shortsighted. The Philanthropic Collaborative released a report in 2008 by former Clinton administration economic official Robert Shapiro showing that for every $1 foundations spend, $8 is generated in local and national economic benefits. Yet reducing the deduction on contributions to private foundations has been a perennial aspiration for those who view private foundation assets as a source of public lucre. The populist political climate, soaring deficits, and a continued economic slump could cast tax-advantaged philanthropic contributions as elitist and self-serving, giving mainstream appeal to what has been a fringe view of private philanthropy.

3. Reducing the Charitable Deduction

President Obama’s proposal to reduce the charitable tax deduction on upper incomes in his fiscal year 2011 budget may be viewed in a similar way: a historically marginal idea that could garner popular appeal given the present mood. After first proposing the reduction in 2009 to help fund his anticipated health care reform package, the President’s plan died under withering criticism. Many complained that the President’s proposal was tantamount to kicking the charitable sector when it was already down, thanks to a reeling economy. United Jewish Communities called the proposal a “disaster.” The Indiana University Center on Philanthropy estimated that the proposed reduction would have resulted in a loss of $3.9 billion in charitable donations.

While some commentators called the President’s latest proposal “dead on arrival,” it could gain broad appeal—in part because it would fund federal deficit reduction rather than health care. Furthermore, it is included in a package of upper-income tax provisions that target high-income earners and is broadly viewed as repealing the Reagan tax cuts. Cast in this light, the President’s proposal will likely be promoted as one step in correcting widely perceived “inequalities between the rich and poor.” “What it would do is it would equalize,” the President retorted during a news conference in 2009. “Equalizing” may strike a popular chord as the effects of the recession linger and the federal deficit soars. Yet reducing the charitable deduction would likely shrink private contributions to the nonprofit sector.

4. Searching for Cash in the States

The federal government is not the only entity that may be looking to philanthropy and the nonprofit sector as a potential source of found revenue during this economic downturn. State governments also pose a threat to philanthropic freedom. The depth of the fiscal crisis in some states is exemplified in a recent independent study that shows hidden shortfalls of more than half a trillion dollars in California’s three principal pension funds. Other cities and states are facing similar pension issues, in addition to dramatic budgetary shortfalls, and they have been dealing with them in creative ways. In Pittsburgh, for example, an ordinance was introduced by the mayor to tax tuition at colleges and universities located within the city to help pay public employee retirement benefits. Withdrawing the property tax exemption that most nonprofit organizations receive is under review in other cities and states around the country. Will the search for cash at the state level extend to private philanthropy?

That may seem unlikely. Yet some states have already shown a willingness to raid and redirect philanthropic dollars under their control. In Arizona, the state legislature recently voted in special session to redirect a $250,000 bequest from a private citizen to help cut the state’s $140 million deficit. The gift, given by a Danish immigrant who “fell in love with Arizona,” was intended to support the state’s parks and was given to the Arizona State Parks Board upon her death. The donor’s intention in making the gift was of little concern to the legislature in reallocating the money, as the bequest had not been slated for a specific purpose within the parks department. Nevertheless, “she would have never given the money,” a close friend said, “if she had known the state was going to take it away from the parks board.” In Colorado, state representative Ken Lambert made a similar play for a $125,000 gift to the state’s Department of Natural Resources to help erase a $1.3 billion budget deficit, arguing that “in a budget emergency, [the state] should use every dollar it can find to balance the budget.”

Will states refrain from redirecting private philanthropic dollars to right their budgetary woes? Or will they look to private foundation assets as tax revenues continue to decline and as their expenses increase?

5. Empowering Regulators with Greater Organizational Management Oversight

The 2008 tax year marked the first year in which nonprofit organizations filed the revised form 990 with the Internal Revenue Service. The new form has three goals according to the IRS: enhancing transparency, promoting tax compliance, and minimizing the burden on the filing organization. For some, however, the new form is an example of the federal agency overstepping its authority by requesting, under the threat of civil and criminal penalties, information related to an organization’s management and governance that goes beyond the agency’s legal authority under the Internal Revenue Code.

In Tax Notes, Marcus Owens writes that the IRS is clearly “assuming a new role in charity governance, and perhaps more broadly, with other types of tax-exempt organizations. In doing so, it has publicly acknowledged that it is moving beyond the requirements of the code.” Indeed, in a 2007 speech, the commissioner of the IRS Tax Exempt and Government Entities Division said: “IRS involvement with good governance is not new. We have been quietly but steadily promoting good governance for a long time … . To more clearly put our weight behind good governance may represent a small step beyond our traditional sphere of influence, but we believe the subject is well within our core responsibilities.”

Few would object to the notion that charitable organizations and private foundations ought to be governed and managed well. In the wake of the collapse of Wall Street’s financial institutions, there may even be broad popular support for greater regulatory oversight and increased transparency in the nonprofit sector. The issue, however, is about whether the IRS should be assessing the governance and management of the nation’s independent sector, and whether it has the legal authority to do so. Is the IRS slowly assuming the role of the nation’s charity evaluator, rather than doing its job of strictly enforcing adherence to the law? Greater organizational transparency may sound good, but it could have a chilling effect on private philanthropy—and it could drive talent away from nonprofit management and governance.

Furthermore, making the IRS into a charity watchdog would invariably lead to a deadening standardization of the sector, stifling innovation, flattening local differences, and favoring organizations that adhere to the IRS’s narrowly construed and subjective notions of what constitutes best management practices. In becoming the nation’s nonprofit watchdog, the IRS, in other words, would not merely affect how organizations report; it will influence how they behave, molding America’s independent charitable sector to the preferred shape of big government.

Conclusion: A Dependent Sector

The economic downturn and reform-minded political climate in Washington is already creating an atmosphere favorable to greater government meddling in the independent sector. These efforts to regulate, administer, and direct private philanthropy will ultimately lead to charities becoming more dependent on government—and, not incidentally, to a less generous America. And the poorest and most vulnerable among us will be the ones who suffer most.

Mr. Cain is president of the Arthur N. Rupe Foundation in Santa Barbara, California, and co-founder of American Philanthropic, LLC, a nonprofit and philanthropic consulting firm, and Philanthropy Daily (, a news and views Web site for the charitable sector. This article was originally published by the Washington Legal Foundation as a WLF Legal Backgrounder and is reprinted here with permission.

Time for the FCC to Respect the First Amendment

by Randolph J. May

IN THE BYGONE ANALOG ERA of mass media and telecommunications, government officials seized power to regulate speech in ways one might have thought violated the First Amendment. For instance, by proclaiming the radio spectrum a scarce public resource requiring regulation to prevent broadcast signals interfering with each other, the Federal Communications Commission justified promulgation of a variety of content regulations, including the notorious “Fairness Doctrine.”

The Fairness Doctrine required broadcasters to present “balanced” coverage of issues of public importance. Of course, FCC bureaucrats exercised broad discretion in deciding whether programming was balanced. The Supreme Court upheld the Fairness Doctrine against First Amendment challenge in 1969 in Red Lion Broadcasting Co. v. FCC. The Court invoked the scarcity of broadcast frequencies as the rationale for approving the regulation of broadcast content: “Where there are substantially more individuals who want to broadcast than there are frequencies to allocate, it is idle to posit an unbridgeable First Amendment right to broadcast that is comparable to the right of every individual to speak, write, or publish.”

Nearly two decades after Red Lion, the Reagan-era FCC jettisoned the Fairness Doctrine in light of the proliferation of new forms of media, especially cable and satellite television. The FCC’s 1987 decision also rested on the agency’s recognition that the regulation had the effect of chilling speech on topics of public importance. Now, more than two decades since the Fairness Doctrine’s demise, there are even more media platforms available for conveying information. For example, in addition to over-the-air-broadcasting, newspapers, and magazines, most consumers have access to cable and satellite television, satellite radio, a variety of wireless services, and, of course, the Internet.

With the transition from the analog to the digital age, and the proliferation of new media outlets, you might expect that the FCC would eliminate many of its outdated forms of regulation, including those that threaten free speech rights. You would be wrong. Indeed, in several respects, the FCC is acting, or proposing to act, in ways that would enhance its regulatory oversight of speech. The agency wants, for instance, to impose net neutrality restrictions on Internet providers—sort of like a digital must-carry mandate. Meanwhile, the agency’s “Future of Media” project appears ready to provide justification for more government control of private media and more government funding for public media. And don’t forget the agency’s maintenance of outmoded speech regulations such as cable must-carry rules.

Net Neutrality Regulations

The FCC wants to impose new regulations on the Internet that would force broadband Internet service providers (ISPs), such as Time Warner and Verizon, to adhere to “net neutrality” mandates. These mandates would require ISPs to post, send, or allow access to any content of the subscriber’s choosing, without any differential treatment of the content whatsoever. While President Obama’s FCC Chairman Julius Genachowski and other net neutrality advocates claim the regulations would promote free speech values, in fact they turn the free speech guarantee of the First Amendment on its head. Government-enforced neutrality mandates likely violate the Internet providers’ First Amendment rights.

Like newspapers, magazines, movie and CD producers, or the man speaking on a soapbox, Internet service providers possess First Amendment rights. According to traditional First Amendment jurisprudence, it is just as much a free speech infringement to compel a speaker to convey messages the speaker does not wish to convey as it is to prevent a speaker from conveying messages it wishes to convey. For instance, the Supreme Court proclaimed in Pacific Gas & Electric Company v. Public Utility Commission (1986) that “[c]ompelled access … both penalizes the expression of particular points of view and forces speakers to alter their speech to conform with an agenda they do not set.” Similarly, in Miami Herald v. Tornillo (1974), the Supreme Court held that a state law requiring newspapers that criticize a political candidate to also publish the candidate’s reply violated the First Amendment.

Even though the proposed net neutrality regulations may not literally restrict an ISP from publishing content of its own choosing, they compel the ISP to convey or make available content it otherwise, for whatever reason, might choose not to convey or make available. And they prohibit an ISP from in any way, and for any reason, prioritizing or preferring some content over other content, even if this is done in response to perceived new consumer demands or as an effort to differentiate its service from its competitors’ services.

The FCC apparently hopes to circumvent the First Amendment problem raised by net neutrality regulations by claiming that any burdens on speech would be outweighed by new speech opportunities created by the open access mandates. But the First Amendment isn’t intended to work this way. It restricts the actions of government entities, not private actors. It does not grant the FCC the power to balance infringement of ISPs’ speech rights by enabling the speech rights of others.

In effect, the compelled speech requirements inherent in the FCC’s proposed net neutrality regulations are akin to the discarded Fairness Doctrine. It is somewhat doubtful that today’s Supreme Court would reach the same decision concerning broadcasters’ First Amendment rights as it did in Red Lion. Regardless, the Supreme Court has refused to extend the same scarcity-based reasoning to other media. If anything, the Court’s ruling earlier this year in Citizens United v. FEC, the campaign finance reform case, signaled its reluctance to continue applying varying First Amendment standards to different media technologies. The Court stated that courts “must decline to draw, and then redraw, constitutional lines based on particular media or technology used to disseminate political speech from a particular speaker.”

Nevertheless, despite these free speech concerns and a recent ruling by a federal appeals court in Comcast v. FCC (2010) that undermined the agency’s claimed jurisdictional basis for Internet regulation, the FCC’s Democrat majority appears bent on charging ahead with net neutrality regulations. The majority’s latest gambit is to propose classifying broadband Internet services as so-called Title II services under the Communications Act and regulating them as common carriage under the same provisions that were applied to Ma Bell in the 20th century when the telephone company operated in a monopolistic environment. At the heart of the Title II common carrier regime is a nondiscrimination obligation that the agency would employ to enforce its notion of net neutrality.

The Future of Media Project

The FCC’s Future of Media project raises First Amendment concerns as well. The agency says the objective of this inquiry, which it began in March 2010, “is to assess whether all Americans have access to vibrant, diverse sources of news and information that will enable them to enrich their lives, their communities and our democracy.” The public notice initiating the inquiry asks 42 wide-ranging questions, ranging from whether there should be an expansion of public media such as public broadcasting, to whether public-interest obligations relating to program content that traditionally have applied to broadcasters should be applied to a broader range of media or technology companies, to whether newspapers can remain sufficiently financially healthy to perform their traditional journalism role, to whether schools and libraries are playing a role in supporting community “information flow.” And on and on.

Of course, the FCC doesn’t have jurisdiction over many of the entities it is studying—such as newspapers, schools, and libraries. And there certainly are questions concerning its institutional competence to do so. But there is another very fundamental concern. Despite its protestations that it will be sensitive to First Amendment concerns, the agency’s history suggests otherwise. Many observers think that the FCC will conclude, despite today’s media abundance, that there are certain “public interest” information needs that are not being met. Indeed, some advocates of greater government support and control of the media acknowledge that we now live in an age of media abundance. But turning the previous scarcity rationale on its head, they point to such information abundance to urge that government-supported media should act as a “filter” to reduce information overload and to be a “megaphone” to amplify the voices of the unheard.

In today’s environment, we do not need, and should not want, government-supported or government-controlled media acting as a “filter” or a “megaphone,” or deciding what programming is in the “public interest.” Such “filtering” or “megaphoning” necessarily involves the government in making decisions based on content. How else to decide what information should be filtered or amplified to meet some “public interest” objective? This government involvement in content selection runs against the grain of our First Amendment values.

Cable Must-Carry Regulation

Under the FCC’s cable must-carry regulation, certain over-the-air TV broadcasters can compel carriage of their programming on cable networks. Must-carry mandates dating back to the Cable Act of 1992 were premised on the existence of supposed cable operator bottlenecks and the need to protect local over-the-air broadcasting. The video marketplace of 2010, however, is characterized by competition. Satellite television operators and, increasingly, telecommunications companies engage in head-to-head competition with cable operators. And video programming is routinely delivered over the Internet. Nevertheless, in the face of such alternatives, the FCC continues to enforce legacy must-carry regulations premised on a lack of competition in the video marketplace.

The Supreme Court recently rejected a petition by Cablevision, a cable operator, that challenged the constitutionality of must-carry regulation on First Amendment grounds. Cablevision’s petition pointed to last summer’s decision by the D.C. Circuit in Comcast v. FCC (2009), in which the court concluded that cable operators no longer have the dominance in the video market that concerned Congress in 1992. Perhaps the most significant argument raised by Cablevision is that the Supreme Court’s 1994 Turner Broadcasting System, Inc. v FCC decision upholding the must-carry statute should no longer be controlling in light of the vastly changed marketplace circumstances.

Unfortunately, the FCC’s briefs to the Supreme Court argued doggedly for continued regulation on the basis that the decreasing number of over-the-air viewers makes carriage on cable systems even more critical to further the congressional interest in ensuring that local broadcasters are financially able to provide an alternative source of programming. But this line of argument seeks to make a virtue out of must-carry’s mismatch with the current video marketplace realities. Aside from the competition offered by satellite and telephone company providers, increasing numbers of broadcasters now make content available via broadband using services and applications such as iTunes and Hulu. Acceptance of the FCC’s logic entrenches compelled access mandates that do not fit today’s marketplace reality.

Time for the FCC to Respect the First Amendment

In early 2009, after fits and starts, over-the-air television finally transitioned from the analog to the digital world. But the flurry of activity by President Obama’s new FCC chairman—including proposed net neutrality mandates, potential expansion of government-supported media, more “public interest” regulation of private media, and staunch defense of legacy cable must-carry regulations—indicates that the Commission itself has yet to make the analog-to-digital transition. The FCC’s regulatory initiatives fit far more comfortably with a 20th century analog-age mindset fixated on scarcity and bottleneck phantoms than on the 21st century digital realities that characterize today’s abundant media marketplace.

In sum, the FCC’s analog-age mindset leads it to adopt or maintain unsound regulations and policies unsuited to the digital age. Apart from the harm to consumers and the nation’s economy caused by these outdated policies, there is an additional, more fundamental harm—a violation of free speech rights, or if not outright First Amendment violations, the chilling of free speech by threatened violations. From the beginning of the agency’s existence in 1927 as the Federal Radio Commission, there has always been a tension between the FCC’s actions affecting content decisions and First Amendment rights. But in this age of information abundance, this tension is substantially heightened. It is time—past time, really—for the FCC to begin acting in a way that conforms to a constitutional culture that respects the First Amendment.

Mr. May is President of the Free State Foundation, a free market-oriented think tank located in Rockville, Maryland. He is the editor of the new book New Directions in Communications Policy.

Climate Policy by Judicial Fiat: How Global Warming Lawsuits Subvert the Democratic Process

by Hans A. von Spakovsky

EVEN IF EVERYONE WERE to agree on the scientific questions pertaining to global warming, there would still remain many difficult questions of public policy: Are the benefits of trying to prevent a rise in global temperatures worth the costs? What policies and/or technologies would best forestall that warming? Who should bear the costs of those policies?

These are inherently political questions that can be answered properly only through the democratic political process—by the two branches of our government entrusted with making policy. The judicial branch is manifestly not one of those branches. Yet global warming activists, impatient with the political process, have called on the courts to step in and fashion a global warming policy through the process of litigation. Unfortunately, some courts now appear willing to oblige: In two separate cases, federal courts of appeals have allowed lawsuits to proceed against various utility, oil and gas, and chemical companies. These cases, filed under public nuisance laws, claim injuries from global warming due to the release of carbon dioxide by the defendant industries.

These decisions violate separation of powers principles, usurping the responsibilities and prerogatives of the legislative and executive branches and striking at the democratic process in what amounts to a judicial coup d’état. They are based on questionable legal principles, disputed science, and unproven and flimsy claims of causation.

Making Policy Is Not the Judiciary’s Job

Under the governmental structure designed by the United States Constitution, there is a clear separation of powers between the legislative, executive, and judicial branches of the federal government. As James Madison explained in The Federalist No. 48, the framers of the Constitution feared that “the accumulation of all powers, legislative, executive, and judiciary, in the same hands” would lead to tyranny. In order to prevent such tyranny, they created three separate branches of government with distinctly different functions. While the judiciary is tasked with interpreting the law, it is the elected members of Congress who are responsible for determining what the public policy of the United States should be on many different issues and implementing that policy by passing laws that are then enforced by the executive branch.

However, there are many liberals who advocate using the judicial branch to bypass the legislative branch. When they are unable to convince legislators to pass the laws they want on specific public policy problems, they see the courts as an alternate forum for implementing, by judicial fiat, public policy that the democratic majority opposes. This practice violates the core principles of adherence to the rule of law and the democratic process that are the basis of our constitutional system.

That is what is happening in the area of climate change policy. Although Congress has passed various laws in the past three decades dealing with climate change, it has very pointedly not passed any legislation aimed at regulating it. Statutes such as the National Climate Program Act of 1978, the Global Climate Protection Act of 1987, and the Energy Policy Act of 1992 all provide only for research and planning to “expand the nation’s understanding of natural and man-induced climate processes.” President Bill Clinton signed the Kyoto Protocol, which would have required substantial carbon dioxide reductions by the United States, but that treaty was never ratified by the U.S. Senate. In fact, Congress passed a series of bills that barred the Environmental Protection Agency from implementing the treaty.

There is also a certain element of greed pushing the latest climate change litigation. The plaintiffs’ bar earned billions of dollars in attorneys’ fees in the court fight against tobacco companies, and the latest generation of plantiffs’ attorneys sees the opportunity for another legal fee bonanza that could easily (and greatly) eclipse those p­­rior fees. As Victor Schwartz, general counsel for the American Tort Reform Association, has said, there is a reason that the personal injury bar is “focusing only on ‘deep pocket’ American energy and utility companies,” despite the fact that any producer of greenhouse gasses like carbon dioxide could be a target.

Two Bad Rulings

Two bad court decisions on global warming occurred within a month of each other. On September 21, 2009, in Connecticut v. American Electric Power Company, the Second Circuit Court of Appeals brought back to life lawsuits that had been filed by Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin, the City of New York, and a number of private land trusts against utility companies. Among the defendants are the Southern Company and the Tennessee Valley Authority, the agency started by President Franklin D. Roosevelt to bring electrical power to the Appalachian region of the United States. The states asserted that these utilities, as the five largest emitters of carbon dioxide in the country, constituting one-quarter of the U.S. electric power sector’s emissions, are a “public nuisance” that is causing global warming. Global warming, in turn, will supposedly cause irreparable harm to property in those states and threaten the health, safety, and well-being of their residents.

The claim was based in part on the dubious Intergovernmental Panel on Climate Change report that has been the subject of widespread criticism for its errors, gross exaggeration, and the possibility of outright fraud by a number of the scientists who contributed to the report. However, the states claimed that “official reports from American and international scientific bodies demonstrate the clear scientific consensus that global warming has begun, is altering the natural world, and will accelerate over the coming decades unless action is taken to reduce emissions of carbon dioxide.”

A New York federal district court actually dismissed these lawsuits initially, properly concluding that even if one assumed that all of the claims being made by the states were correct, what to do about global warming was a political question that was beyond the limits of the judiciary’s jurisdiction. (See sidebar on page 22.) According to the court, under our separation of powers, it is the elected branches of our government, Congress and the President, “to which our system commits such policy decisions.” Resolution of this issue “requires identification and balancing of economic, environmental, foreign policy, and national security interests,” which is the type of policy determination that is not intended for the courts.

However, this well-reasoned decision was overturned by a two-judge panel of the Second Circuit Court of Appeals. (The third judge on the panel, Sonia Sotomayor, took no part in the decision because of her elevation to the U.S. Supreme Court.) The panel held that the states and private organizations could bring a public nuisance claim under federal common law despite the fact that it would be virtually impossible for the plaintiffs to show any causal connection between the actions of the utility companies and any damages supposedly suffered by the plaintiffs, particularly given the questionable nature of the scientific theory underlying the claims. The political nature of this litigation was especially evident in the press release issued by Connecticut Attorney General Richard Blumenthal, who was a driving force behind the litigation. Blumenthal praised the Second Circuit’s decision as setting a precedent against “all who threaten our planet.” A petition requesting a review of the panel’s decision by the entire Second Circuit Court was denied.

Less than a month later, on October 16, 2009, a three-judge panel of the Fifth Circuit Court of Appeals also reinstated a lawsuit that a Mississippi federal district court had dismissed for the same reason the district court in New York had dismissed the American Electric Power Company case: because it was a nonjusticiable political question. In Comer v. Murphy Oil USA, plaintiffs’ lawyers filed a class action lawsuit against energy, fossil fuel, and chemical companies on behalf of residents of Mississippi who had suffered damage from Hurricane Katrina. They claimed that the defendants’ emissions of greenhouse gases contributed to global warming, which in turn caused a rise in sea levels, which then added to the ferocity of Hurricane Katrina, increasing the property damage suffered by the residents of the state. The lawsuit claims that the emissions constitute a public and private nuisance, as well as a trespass, negligence, unjust enrichment, fraudulent misrepresentation, and civil conspiracy. The plaintiffs claimed that Hurricane Katrina was a direct and proximate result of the defendants’ greenhouse gas emissions. The plaintiffs even admitted in their complaint that they were in court because there had been a “dearth of meaningful political action” to address global warming.

The district court correctly concluded that making a decision on this issue would exceed its constitutional authority and invade the roles of the legislative and executive branches. It observed that courts are “simply ill-equipped or unequipped” to deal with this issue. The debate over global warming “has no place in the court, until such time as Congress enacts legislation which sets appropriate standards by which the court can … adjudicate facts and apply the law.” It is not up to the court to set the standards. As in the Second Circuit, however, a three-judge panel of the Fifth Circuit Court of Appeals reversed the Mississippi court’s dismissal, misreading applicable Supreme Court precedent on political questions and holding that the plaintiffs’ nuisance, trespass, and negligence claims under state law could proceed in federal court. One of the most ridiculous aspects of the Fifth Circuit’s decision was its finding that the plaintiffs could satisfy the requirement that they show a connection between their injuries and the defendants’ actions.

A Nebulous Link

The claim that the defendants’ emissions of carbon dioxide either caused Hurricane Katrina in 2005 or enhanced its strength is scientifically dubious at best. There is no evidence that greenhouse emissions have caused an increase in the intensity or number of hurricanes; in fact, as Ben Lieberman of The Heritage Foundation has pointed out, “[t]he 2006 through 2008 hurricane seasons were at or below average, and the 2009 season went down as the weakest in more than a decade.” The Director of the National Hurricane Center told Congress that Katrina was “due to natural fluctuations/cycles of hurricane activity” and wrote in a paper that the connection between hurricanes and global warming is inconsequential compared to natural variability.

Even if such evidence existed, greenhouse emissions come from hundreds of millions of sources, man-made and natural. Contrary to the Fifth Circuit panel’s conclusion, it would be next to impossible for the plaintiffs to show a chain of causation between the defendants’ specific emissions and the specific climate event of Hurricane Katrina that supposedly caused the plaintiffs’ injuries. As noted attorney David Rivkin recently pointed out, “[g]iven the near-infinite number of emitters over the centuries, no court could find a substantial likelihood that any defendant, even a major [greenhouse gas]-emitting industry, caused the plaintiffs’ alleged global warming-related injuries to any quantifiable extent.” Fortunately, this decision by a three-judge panel was vacated and the case has been set for arguments before all of the judges of the Fifth Circuit. Hopefully, the Fifth Circuit as a whole will issue a decision reinstating the district court’s decision.

The Political Question Doctrine

It has been axiomatic throughout our constitutional history that there exist some questions beyond the proper reach of the judiciary. In fact, the political question doctrine originates in no less august a case than Marbury v. Madison, where Chief Justice Marshall stated that “[q]uestions in their nature political, or which are, by the constitution and laws, submitted to the executive, can never be made in this court.” Well over a century after that landmark ruling, the Supreme Court, in Baker v. Carr, famously announced six identifying characteristics of such nonjusticiable political questions, which, primarily as a “function of the separation of powers,” courts may not adjudicate. Of these six characteristics, the Court recently made clear that two are particularly important: (1) the presence of “a textually demonstrable constitutional commitment of the issue to a coordinate political department”; and (2) “a lack of judicially discoverable and manageable standards for resolving it.”

The spectrum of nonjusticiable political questions in a sense spans the poles formed by these two principles. At one pole, the Constitution’s specific textual commitments shield issues expressly reserved to the political branches from judicial interference. At the other pole lie matters not necessarily reserved in so many words to one of the political branches but nonetheless institutionally incapable of coherent and principled resolution by courts acting in a truly judicial capacity; such matters are protected from judicial meddling by the requirement that “judicial action must be governed by standard, by rule” and by the correlative axiom that “law pronounced by the courts must be principled, rational, and based upon reasoned distinctions.”

Excerpted from “Too Hot for Courts to Handle: Fuel Temperatures, Global Warming, and the Political Question Doctrine,” by Laurence H. Tribe, Joshua D. Branson, and Tristan L. Duncan, published by the Washington Legal Foundation, as a WLF Working Paper, January 2010.

The conclusion reached by the two federal district courts in Comer and American Electric Power Company that the climate issue is a political question was also reached by a federal district court in California in a third case that was decided on September 30, 2009. In Native Village of Kivalina v. ExxonMobil Corporation, the district court dismissed a public nuisance lawsuit by an Eskimo village against oil, energy, and utility companies claiming that the defendant’s emissions supposedly contributed to global warming, which eroded Arctic sea ice, which in turn flooded the village. As the court said, “there is no realistic possibility of tracing any particular alleged effect of global warming to any particular emissions by any specific person, entity, or group at any particular point in time. Plaintiffs essentially conceded that the genesis of global warming is attributable to numerous entities which individually and cumulatively over the span of centuries created the effects they now are experiencing.” To try to hold individual entities responsible for specific injuries under such circumstances makes no sense. This decision has been appealed to the Ninth Circuit Court of Appeals, the most liberal appeals court in the nation, which may reverse the district court. The Ninth Circuit consistently holds the record each year, however, for having the largest number of decisions overturned by the Supreme Court of any federal appeals court.

Judicial Tyranny Ahead

The nature of litigation does not lead to the effective development of regulatory policy based on considerations of science, economics, health, safety, and national security. Sympathy for the plight of those bringing suit can often lead to damage awards that are unjust and amount to bad regulation. Environmental regulation should be implemented through appropriate political action by Congress and the executive branch as required by our constitutional system. Tort law, selectively applied by individual judges or juries, is not equipped to make broad policy judgments and determinations on important issues facing our nation. Hopefully as these federal cases continue to work their way through the appeals process, the Supreme Court will eventually affirm that this issue must be left to the elected branches. If the appeals court decisions are upheld, then a tiny minority of unelected federal judges, as opposed to the elected representatives of the people, will be determining not only the environmental policy of the entire country, but the economic future of millions of Americans. Such regulation through litigation will lead to the equivalent of legal tyranny.

Mr. von Spakovsky is Senior Legal Fellow in the Center for Legal and Judicial Studies at The Heritage Foundation.

Who Is Saving Feminism?

by Cristina Goizueta and Rachel Kopec

OVER THE PAST 35 YEARS, women’s happiness has “declined both absolutely and relative to men,” according to a well-publicized Wharton business school study called “The Paradox of Declining Female Happiness.” The paradox, according to the authors, is that female happiness has declined while feminism has concurrently achieved great shifts of rights and bargaining power from men to women. How could that be?

The 2010 National Conference of the Network of enlightened Women (the group deliberately chooses not to capitalize the “e” in “enlightened”) offers the young women attending a provocative answer: Something has gone wrong with feminism. One of the keynote speakers at the conference is Christina Hoff Sommers, who 15 years ago famously tweaked the likes of Gloria Steinem and Betty Friedan with her book Who Stole Feminism?

The problem with the feminist movement, Sommers tells the conference, is that it subscribes to a radical egalitarian ideology that tries to deny there are important differences between men and women. That ideology is the result of trying to adapt the civil rights idea that separate but equal is racist. In this formula, explains Sommers, “separate but equal is sexist” which leads to the conclusion that “if more women are staying home with children, that’s sexist.”

Sommers is both an academic and a leading light in a movement that seeks to take back feminism from the radical egalitarians. She calls her alternative “equity feminism,” the aim of which is “equality of opportunity … not sameness.” Sommers explains: “We [shouldn’t] judge the world based on whether men and women are indistinguishable; that is fanaticism.”

Sommers’s host, the Network of enlightened Women (NeW), has carved out a place for this culturally conservative version of feminism on college campuses around the country. The group, founded by Karin Agness at the University of Virginia in 2004, now boasts chapters at 24 colleges and universities. The conference at which Sommers speaks is the group’s fifth national conference, and the group plans to hold another next year.

NeW Executive Director Holly Hall Carter says college women “are seeking an outlet to understand what their principles are, and the typical college women’s centers with feminist agendas are not providing the answers.” Carter says radical feminism focuses too much on women as minorities, “paralyzing women and enforcing a victim mentality.” That mindset “contradicts the conservative principle of individual responsibility,” she says.

The victim mindset, Sommers explains, can’t assimilate important facts about women’s prospects today. She notes that women now earn 60 percent of bachelor’s degrees. Feminists insist that sexual discrimination must be taking place because women are underrepresented in science, technology, engineering, and math. But women, notes Sommers, are also underrepresented in the prison system and are less likely to take jobs as garbage collectors. And they are overrepresented in teaching and nursing. It may be that some fields simply align better with feminine nature. Radical feminists reject this notion out of hand, preferring instead to believe in a grand patriarchal plot.

When Agness sought out an alternative to the radical feminist groups at the University of Virginia in 2004, she was astonished by the lack of intellectual diversity. Agness says: “All of the women’s groups at UVA were dedicated to promoting a liberal agenda.” After it became clear that Agness would have to start her own club, she asked one of the faculty members at the Women’s Center whether the Center would co-sponsor a club for conservative women. Agness recalls: “She looked at me like I was crazy, chuckled, and said: ‘Not here.’”

Disappointed by the lack of resources available for culturally conservative women, Agness founded NeW for those women who “embraced romance instead of the crude hookup culture, recognized sex differences, valued motherhood and families, and rejected the victim mentality that has come to dominate feminism.” Agness says: “Modern radical feminists don’t represent all women, a majority of women, or even a large minority. Although groups such as the National Organization for Women are organized and loudly project their voice, it is not a voice that resonates with many women.”

NeW was originally conceived as a book club. Members meet regularly to discuss books such as The Politically Incorrect Guide to Women, Sex, and Feminism, A Return to Modesty, and Letters to a Young Conservative. Their discussions usually lead to deeper conversations addressing more complex political and cultural issues.

Among NeW’s priorities is helping college women grapple with the “hook up” culture. On college campuses today, young men and women don’t date, they “hook up” for a good time without any sort of emotional commitment. Radical feminism, with its notion that women should behave like men, offers little to women turned off by the emotional and physical costs of the “hook up” culture.

These young women, explains Carter, say “that they have given into this culture, but this isn’t something they want; this isn’t fulfilling.” NeW provides a positive alternative to, and directly challenges, the “hook up” culture by promoting mutual respect between the sexes. A popular NeW event on many campuses is the Gentlemen’s Showcase, for which women nominate men of integrity. Agness explains: “Since the emergence of the sexual liberation movement in the 1970s, women have been told that self-sufficiency and independence should be a woman’s top goals. Meanwhile, men receive the message that chivalrous acts are demeaning toward women. Young men are too often the target of women’s groups, who cast men as oppressors and women as the victims.”

The NeW chapter at Arizona State University held the first Gentlemen’s Showcase. NeW leader Blayne Bennett had no idea how successful it would be. Bennett says: “When we were shooting the [promotional] video and asking if students thought chivalry was dead, we received a resounding ‘Yes!’ from the women, and the men seemed to be confused as to what even characterized chivalrous behavior.” By the end of the year’s Showcase, NeW had received more than 300 nominations of ASU gentlemen.

Another issue important to NeW women is the relationship between family and career. “I realized that I didn’t have to make a choice,” says Carter. “The neat thing about NeW is that every woman has a unique experience coming in and different goals. That’s a great thing that really unites women, no matter where they fall on the political spectrum.” While radical feminists undervalue the choice to be a mother, women increasingly want more options. NeW offers women a forum in which they can learn how to balance being a mother and having a successful career, so that they can ultimately define success on their own terms.

NeW’s message resonates with women past their college years, and the organization plans to expand its reach beyond campus grounds. Alumni groups are forming as the network widens and graduates become activists within their communities. Experienced women in the conservative movement are taking notice. Along with Sommers, former First Lady of Virginia Susan Allen attended the 2010 National Conference.

“Mainstream women are going to have to rescue feminism from the feminists,” says Sommers. The women of NeW are hard at work on that rescue mission and on the task of bringing intellectual diversity back to campus.

Ms. Goizueta and Ms. Kopec are members of the Young Leaders Program at The Heritage Foundation.

Be Compelling to Prospective Donors: How to Write a Case for Support

by Ann C. Fitzgerald

WHEN FUNDRAISERS EMBARK on a campaign to raise money for a new building or a major project, they often start by writing a case for support.

The case for support, or case statement, is a marketing and fundraising tool that explains in an urgent and compelling manner why someone should support the campaign. It answers the prospective donor’s questions about the nonprofit organization, the project, and the cost. And it does so in a way that connects the donor emotionally to a grander vision.

But a case for support should not be reserved just for a capital campaign. It has many more uses for a nonprofit organization. That is because a case statement does what all your fundraising communication should do: It gets the donor’s attention and spurs the donor to action by answering the questions: Why is this project or issue important? What must be done now? Why is your organization qualified to carry out the work?

For example, a case statement can be:

  • Incorporated into a presentation to motivate a major donor to fund a specific project;
  • Employed as the basis of a proposal to a grantmaking foundation;
  • Used for generating ideas for direct mail pieces;
  • Integrated into print and electronic communications to donors; or
  • Turned into an appeal for annual support.

Best of all, a basic case for support does not have to take long to complete. Many elements that will make up the case are readily available in the form of annual reports and donor communications.

In Seeing through a Donor’s Eyes, author Tom Ahern offers helpful advice for crafting different types of case statements. He also emphasizes the importance of conducting face-to-face interviews with the key stakeholders in a campaign. This step could include anyone from the board chairman to the constituent being served.

Outline of a Case Statement

In addition to interviews, the starting point for a case statement is your organization’s strategic plan. Michael Allison and Jude Kaye, authors of Strategic Planning for Nonprofit Organizations, define strategic planning as “a systematic process through which an organization agrees on—and builds commitment among key stakeholders to—priorities which are essential to its mission and responsive to the operating environment.” By basing your case statement on your strategic plan, you will ensure that your board of directors and management share the same objectives.

A case for support can be written as a narrative but should encompass these elements:

● Vision Statement. A vision describes what success would look like if an organization fulfills its mission or carries out the project defined in the case statement. The vision statement should be lofty but grounded in reality. For example, The Heritage Foundation’s vision is “to build an America where freedom, opportunity, prosperity and civil society flourish.”

● Mission Statement. All nonprofit organizations have mission statements, but make sure that yours clearly explains your purpose for existing, what you do, and the customers you serve.

● Outline of Problem(s). This is the heart of the case statement. If the problems are not clearly defined, then the solutions will not make sense. Consider the problems from an economic, political, social, and historical perspective. What makes them urgent and relevant today? Why should the donor care?

● Intended Solutions. Generally, what short- and long-term solutions will address the problem or problems described? For example, if a problem is a lack of quality education among low-income children, then a solution may be improved access to quality education through choice, competition, and accountability.

● Qualifications of the Organization. Explain why your organization is qualified to carry out this work. The explanation may include the group’s history; its growth over time; the knowledge, skills, and experience of key staff; or the people who serve on the board of directors.

● Plans. This element is where you describe the specific programs for which you require funding. You should outline your goals as well as tactical steps and timelines. Using the education example, one part of your plan may be to establish a policy center to research education reform options and advocate for public policy changes.

● Tangible and Intangible Benefits. Consider how the project will benefit the cause, the community, your organization, and the donor.

●Biographies of Key Staff and Board Members. Briefly describe the people who are affiliated with your organization and who will be involved in the implementation of various plans.

● Endorsements. Gather endorsements of your organization from influential stakeholders to demonstrate your impact.

● Detailed Budget. Once you have captured the donor’s attention on an emotional level, you will need to follow up with the more practical details of what the project will cost. A detailed budget demonstrates that you have a solid business plan in place to accomplish your goals.

● Call to Action. Explain the number of gifts you need and at which amounts.

● Ways to Give. Include all the ways that a donor may make a gift to this project. Options may include one-time cash gifts, multi-year pledges, or bequests.

● Recognition Opportunities. Capital campaigns often provide donors with naming opportunities for significant gifts. But even smaller projects can offer recognition to donors. For instance, a supporter at a certain level could be listed in your annual report.

Once these pieces are together, the case—or parts of it—can be employed for different uses from grant proposals to presentations to individual donors. In every instance, however, it should get the donor’s attention, tell a story that includes a problem and a solution, and then offer a call to action.

While there are many ways to approach writing a case for support, it does not have to be a daunting task reserved for a Pulitzer Prize-winning author. Most likely, you have the information, ideas, tools, and talent you need to start writing today. Good luck!

Ms. Fitzgerald is President of A.C. Fitzgerald & Associates LLC. A.C. Fitzgerald & Associates ( is a national consulting firm providing business solutions for nonprofit organizations.