Andrew Carnegie established his foundation with the objective of building libraries and providing churches with organs. Today the foundation is involved in funding many progressive causes, none of which are related to church organs or libraries in the United States. The foundation still does a small amount of library work in Africa.
One hundred years after most of the Carnegie libraries were constructed 1554 of the original 1681 buildings still exist and 911 are still used as libraries.
Would Carnegie approve of the activities of his foundation today? Do the activities of today’s foundation have the lasting positive impact on the society and culture as Carnegie’s library construction program? Would communities today, particularly small communities, benefit more from the construction or refurbishment of community libraries than the corporation’s current endeavors supporting liberal activist groups.
There is a long history in the US of foundations set up by wealthy philanthropists being taken over by progressive intellectuals who change goals of the organization to support the political and social objectives of the managers instead of the causes for which the philanthropist created the organization. Reform of large non-profits is long overdue. I suggest:
1) A 20 year horizon for non-profit status. At the end of 20 years the organization either liquidates or becomes fully taxable.
2) Income on the sale of merchandise and services by non-profits should be taxed. Goodwill, for example, competes with local merchants by selling donated merchandise. Its non-profit status allows it to avoid taxes on the goods it sells, while its private sector competitors pay for the goods they sell and pay taxes on the income.
3) Non-profits should pay property taxes on real estate and land owned by the non-profit but not used for the organization’s activities. Many large non-profits invest in property to generate streams of tax free rental income. By not having to pay property taxes, these non-profits have an advantage over the private sector landlords with whom they compete.
4) Non-profit status should be conditional on a limit to the amount of funds the organization can spend on overhead (say 5%) to insure the organization’s funds are being employed in the non-profit activity and not being used to pay high salaries.
A thoughtful response thank you. I benefited from a Carnegie funded library when I was young and growing up i the San Joaquin Valley of California. It really did make a difference in my intellectual development. That said, I’m going to differ from you just a bit in that my experience suggests to me that rules will be worked around and we just need to end the practice of having non-profits. This may seem a big step (closing the monasteries in England by Henry VIII is comparable I think) but I’m not sure that the species can be “saved.” I do see many good points in what you suggest if we chose to let these institutions survive.