Eating From the Hand That Bites You

This week, the president signed into law the Edward M. Kennedy Serve America Act, which authorizes a huge expansion of the Americorps program, potentially tripling the number of its government-paid "volunteers." The legislation -- which also promises federal funds for "effective solutions developed by social entrepreneurs" -- was heralded as a victory for patriotism and public service. It was enough to draw Jimmy Carter to share the podium with Ted Kennedy -- both on hand for the signing ceremony at a charter school in a poor section of Washington, D.C. But is it truly good news? Those who cherish the independence of American philanthropy and the nonprofits it supports actually have reason for worry.

The past two decades have seen an explosion of new, inventive nonprofits established and operated with little or no government support. They stand in notable contrast to established, large organizations -- from Catholic Charities to the Salvation Army -- which, in many cases, have come to rely on government contracts. The new wave seemed different. Many of the "social entrepreneurs" to which the new national service bill refers were themselves frustrated with ineffective government social-service programs.

The founder of Upwardly Global, an immigrant-assistance program based in San Francisco, had seen government programs steering skilled immigrants to menial jobs and worked instead to find positions that would make use of their qualifications. The founders of the Boston-based Year Up sought to replace outdated government job-training programs with technical education and corporate apprenticeships for urban young adults. The founders of such nonprofits have been disciplined by the challenge of finding funds -- mixing philanthropic support with fees from businesses and clients -- and learning that a good cause is not enough; results matter. Some in this new wave of social entrepreneurs even took personal risks. The founders of the SEED Charter School, for example, where the president signed the bill, took out personal loans and went without salaries in order to fund the renovation of the school's building.

But the Kennedy Act threatens to thwart this creative movement. It will throw so much money at nascent programs that these otherwise independent efforts will lurch after federal dollars and bend toward government directives.

Take the Americorps expansion. Its name notwithstanding, the program is nothing like the Roosevelt-era Works Progress Administration or the Civilian Conservation Corps -- government-run operations with recruits in uniform, building trails and bridges. Americorps is a grant program in which people are the prize. Organizations that want its federally subsidized free labor must apply to "service commissions" established, by statute, in all 50 states and whose members are appointed by governors. Inevitably, these commissions risk choosing winners and losers based on politics, not just merit.

Then there's the legislation's new "social innovation fund," which promises to bring with it big money: five-year grants, renewable for another five, of between $1 million and $10 million. The funds will come, however, with tight strings -- government will specify what most needs doing. Organizations must be "focused on improving measurable outcomes in such matters as education for economically disadvantaged students, child and youth development, reductions in poverty or increases in economic opportunity."

In language reminiscent of the War on Poverty's infamous "maximum feasible participation" requirement for community input, nonprofits on the receiving end of the fund's dollars will have to "consult with a diverse cross-section of community representatives." In short, the legislative language seeks to codify the goals of those, like California Rep. Xavier Becerra, who have been telling the nonprofit world to focus its work on low-income and minority communities in approved ways -- or risk losing their tax deductibility.

Sadly, social entrepreneurs -- who have often started organizations to help us cope with the failure of government programs -- may well be tempted by the big money. But that won't be the best way to serve America.

This piece originally appeared in Wall Street Journal

This piece originally appeared in The Wall Street Journal