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Spring 2005

"Starving the Beast": Foundations Have a Stake

by Mark Lindberg

The phrase "starving the beast," first whispered by neo-conservative intellectuals behind the closed doors of Washington think tanks, has gained just enough currency to be found within mainstream media and at venues such as Independent Sector’s recent conference. The notion embodies both a means and an end for those who prefer a reduced size and role of our government.

In short, the strategy is to cut taxes, then use the resulting deficits as an excuse for cuts in social spending. On the national level, social insurance programs such as Social Security, Medicare and Medicaid, established in the 1930s to reduce the extreme economic insecurity felt before the New Deal, appear to be the ultimate targets. Along the way, restricted federal budgets are affecting funding for programs ranging from affordable housing, environmental protection and the arts, to name a few.

One way to implement this strategy is through spending caps. For example, the President’s budget calls for a cap on federal discretionary spending, which would result in a loss of $996 million to Minnesota’s state and local governments from 2006 to 2010. Cuts of this size, combined with increased security-related spending and permanent tax cuts, reflect a structural change in government not seen since 1932.

This dynamic is compounded in Minnesota by the Governor’s determination to hold the line on taxes. Regardless of whether the Pawlenty Administration subscribes to the "starving" philosophy, the Governor’s approach has the same effect: a reduction, and in some cases, outright elimination, of government services for the state’s most vulnerable residents.

Why Should Foundations Care?

Some believe that the budgeting process reflects the moral values of a community. While individual acts of charity may meet some of the immediate needs of the poor, homelessness and lack of insurance can only be dealt with through federal and state budgets, which can provide funding to meet the needs of everyone in our community.

Self-preservation may be another reason for foundations to become more engaged in budget matters. In 2003, the total giving of all foundations in Minnesota (approximately $880 million a year) was nothing close to the $2.25 billion deficit then faced by the state. This year’s deficit of $700 million, which doubles to $1.4 billion in real expenses if inflation is included, similarly outweighs the capacity of private giving. Thus, even if all foundations were inclined to try to meet public deficits—which they aren’t—they couldn’t.

More fundamentally, it may be neither economical nor wise, in the long run, to tear down government and nonprofit infrastructure. Deep and persistent cuts are not the same as "reform." No one can object to efficiency, or improving the quality of services with current spending. The problem is that just cutting, without keeping the objective of the spending in mind, results in a reduction of important services that people need. If federal and state cuts persist on their current trajectory, foundations will be pressured to direct funds to help sustain operations and rebuild "public" infrastructure, rather than fund new ideas or genuine public-private partnerships.

If they didn’t do it in 2003, foundations would be wise to consider the implications of these shifts. Many foundations have adopted policies, informally or formally, that essentially declare that they will not try to step in or make up where public funding is short. At the Otto Bremer Foundation, we continue to review each proposal on its own merits, but our trustees have indicated a preference for not providing funding merely to meet shortages arising from budget cuts. Other foundations have decided to limit their immediate focus to particular areas because of the budget cuts.

While these approaches are somewhat useful to potential applicants in the short run — at least they know what we don’t fund — they provide only a partial response to the larger issues currently in play. Indeed, focusing on the impact of cuts on individual areas of interest misses the point. The gravity and structural nature of these budget debates, on a federal and state level, arguably demands that foundations be civically engaged like never before.

What Are the Options?

First, we need to get informed. The Center on Budget and Policy Priorities, and OMB Watch, are examples of highly respected nonprofits that generate nonpartisan information about the federal budget and related proposals affecting infrastructure and programs.

Locally, Jay Kiedrowski and John Gunyou, former State Finance Commissioners under various Minnesota governors, have developed excellent presentations on state spending and how to effectively target public subsidies. Alternatively, many local advocates maintain listserves that provide regular updates on various sectors or issues. The Minnesota Budget Project, which also has a listserve, is churning out timely and authoritative information state and federal budget information.

Second, develop and articulate a "world view" that reflects the values and priorities of the foundation. While unanimity among trustees may be difficult, consensus shouldn’t be. Do cuts equal "reform"? Is prevention more cost-effective than treating symptoms? Where does advocacy fit with supportive services? How do such questions relate to your foundation’s mission?

Third, get engaged. If you’re unsure where to start, or what is legal, obtain a copy of the Alliance for Justice’s new publication "Investing in Change: A Funder’s Guide to Supporting Advocacy." It is full of information about how foundations themselves can advocate, as well as build the advocacy capacity of grantees. Foundations on the Hill, an event managed locally by the Minnesota Council on Foundations, and its counterparts across the country, is another way for both trustees and foundation officers to get involved.

Fourth, foundations can embrace a broad and constant message that engaging in public policy is desirable. Of course, a foundation’s loudest voice is through its grantmaking. Expressly identifying advocacy and civic engagement as focus areas can highlight this message. Bringing groups of people together, at the public policy table, is another way foundations can do their part to connect with government directly and indirectly. Supporting research and analysis, and communication and dissemination efforts, are also important tools for foundations interested in sound public policy.

Even a casual review of headlines these days indicates that foundation work has public policy implications and that, in turn, public policy affects the work of foundations. Martin Luther King once said that "[o]ur lives begin to end the day we become silent about things that matter." Providing a constructive alternative to an idea such as "starving the beast" is something that should matter to foundations.

Mark Lindberg is senior program officer
for the Otto Bremer Foundation.

Copyright 2005 Minnesota Council on Foundations
Reproduction in any form without the written permission of the publisher is prohibited.


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