In the wake of the Bill Schambra conversation at Tactical Philanthropy, perhaps we all have a teachable moment. With Holden and Sean particularly in mind, and also Jeremy Gregg, Albert Ruesaga, and Nonprofiteer, let's take some real and hypothetical facts.
Holden, you are interested in helping the poor, and you are actively evaluating organizations to which you can give. May I recommend to your attention Central Dallas Ministries, whose fundraiser is a reader here, Jeremy Gregg. I have done a site visit a CDM, met with their extraordinary leader, Larry James, and have volunteered to help them think about donor centered philanthropy. Now, here is the CDM Budget for last year. Glance at it quickly. What surprises you? Does it surprise you that the biggest revenue source for CDM, almost $3 million of a total of $7 million is actually public money, i.e., money from local, state, and federal sources? Not unusual. Nonprofits often act as the intermediaries between those who receive social programs and the government.
OK, now let's imagine, Holden, that you step forward with $1 million of your personal money. You are honored. You get to cut a ribbon, let's say, on a new building. You are pleased, proud and excited. Now, you get the 2008 budget. You notice that revenues reflect a big gift, from you, of $1 million. You also note to your consternation that government funds have dropped by that same $1 million. You ask Jeremey how that happened. He says, "Well, Bill Schambra came through with some legislators and the wealthy board members at Hudson. He told them that civic engagement means that ordinary citizens like Holden will step foward and provide very efficiently what government provides inefficiently to the poor. Since Holden stood up, government can stand down. This, multiplied by a thousand points of light like Holden all over the US, will mean lower taxes for the Hudson Board Members. " Going back to the limousine, Bill hita up the Hudson board for a gift, not to CDM but to Hudson for all the good work Hudson is doing shifting the burden of helping the poor from wealthy smart, selfish, people to well-meaning suckers like Holden.
Now, Sean and Holden, can you see why Albert and I said you were being played? The game here is not around civic engagement, or the morals and self sufficiency of the poor, which is what Bill retails to the gullible, but around taxation, the topic of interest to those who pay and manage him for results. The driving force at Hudson is burden shifting from taxes to philanthropy, from Conrad Black and the Kravis family to Holden and to the funders like him that Sean might work with at Ensemble Capital Management.