Not Just The Clintons: Why Elected Officials Should Not Lead Foundations
The revelations that major donors to the Clinton Foundation may have had reasons other than altruism to make their gifts raises an issue that goes beyond Bill and Hillary. It extends broadly to the question of whether non-profit, charitable funds should ever be led elected officials while in office. It's not a question limited to the Clinton Foundation; nor is it hypothetical. It's suggested by funds tied to the administrations of two leading progressive mayors, Eric Garcetti of Los Angeles and Bill de Blasio of New York.
In both cases, these foundations—the Mayor's Fund to Advance New York City , and the Mayor's Fund for Los Angeles—seek private support for what can only be described as good causes. In New York, the Mayor's Fund—which, it must be noted, de Blasio inherited from predecessor mayors Bloomberg and Giuliani, and is led by de Blasio's wife, Charlene McRay, focuses on “mental health, youth workforce development, immigration and citizenship, domestic violence, financial empowerment and support for young men and women of color.” In Los Angeles, the Mayor's Fund, established through the California Community Foundation in June, 2014, similarly seeks to forge a “public-private” vehicle to enable “economic prosperity, community resiliency, quality of life and government efficiency”. It describes itself as “uniquely positioned at the crossroads of local government, business, philanthropy, and non-profits, the Fund enables communication and collaboration that will solve some of Los Angeles' most complex challenges.”
Why might any charitable organizations doing such good work be cause for concern?
Investigative reporting by the Los Angeles Times provides a good answer in the case of that city. It notes that the Fund—“modeled on similar funds in New York and other cities”—looks very much to be a vehicle through which private interests can be advanced in the name of serving the public good. The Times highlighted the story of an engineering firm, legally barred from making donations to a mayoral campaign by a city law, because it held contracts with the city worth more than $100,000, may have seen the Fund as a way to support causes, such as Los Angeles River restoration, favored by the Mayor. “We can't support his campaign,” the head of the firm tells the Times. “So this is something we could support.”
“The contribution,” continues the Times, “ is one of dozens the Mayor's Fund has received, from companies with a stake in City Hall decisions. . .”
In other words, just as with the donations to the Clinton Foundation from organizations or individuals with a stake in State Department decisions while Hillary Clinton served as Secretary of State, so it is with the Mayor's Fund for Los Angeles: the risk ia that an ostensibly charitable organization will appear to be a way to curry favor with an elected official—and raise public concern that some quid pro quo might be implied.
There's been no similar reporting about the Mayor's Fund in New York—but a review of the Fund's advisory board suggests a similar concern. It includes, for instance, a wide variety of the titans of New York's real estate industry—a sector which must often look to city government for any number of tax breaks and zoning approvals. (The de Blasio era board also includes a number of celebrity liberals, including actor Steve Buscemi and hip-hop mogul Russell Simmons.) There is no reason to believe that those involved and those making contributions are anything other than civic-minded—but how much is it worth to any New York firm to be in a position to work with the Mayor's wife on projects she cares about?
In its own way, even the Obama Administration's initiatives to help young black males, My Brother's Keeper—for which it's difficult not to applaud the White House—nonetheless, raises similar concerns. It's attracted a great deal of philanthropic support but so, too, has it received corporate support—from AT&T T +0.03%, Deloitte , and the Citibank Foundation. Such firms today are subject to more and tighter federal regulation–even small changes in which are highly valuable.
Of course, just asking for support is no guarantee of getting it: policy does matter. In New York, for instance, another city-led non-profit, the Fund for Public Schools—founded by the Bloomberg Administration but now led by de Blasio schools Chancellor Carmen Farina—has, reports the New York Times, seen a major drop-off in financial support, perhaps because of the Mayor's antipathy toward the charter school movement supported by many wealthy New Yorkers.
Still, the larger point here is this: there are good reasons for government, philanthropy and private businesses to remain distinct. The types of civic and social causes supported by the New York and Los Angeles Mayors' funds have long been supported by local charitable organizations—especially community foundations. For instance, in my work evaluating social entrepreneurs for the Manhattan Institute's 2015 Richard Cornuelle prizes, I've just returned from visits to two impressive organizations, both of which received key support from local community foundations. The Sarrell Dental Center of Anniston, Alabama, is, with branches through that state, provides desperately-needed dental care for children on Medicaid who have historically not had access to dentists. It was launched by the Community Foundation of Norrtheast Alabama. In Cleveland, EDWINS Leadership and Restaurant Institute training ex-offenders for jobs in the restaurant business through hands-on experience at a top-flight, non-profit French restaurant. Its wide range of local, private philanthropic support included that of the nation's oldest community foundation, the Cleveland Foundation. In other words, good work by capable, independent charitable organizations can be supported without creating the appearance that such giving may compromise the integrity of government decision-making. America's independent sector–its civil society–should remain just that: independent.
This piece originally appeared in Forbes
This piece originally appeared in Forbes