A charitable assessment

In the fall of 2003, Ken Stern received the kind of news that one would remember quite vividly. Stern, then chief operating officer of National Public Radio, was at his desk when he learned that the nonprofit broadcasting company would be the beneficiary of more than $200 million from the recently deceased Joan Kroc, wealthy widow of McDonald’s founder Ray Kroc.

Stern and everyone else at NPR were shocked by this enormous good fortune, but it also left him bemused. A year earlier, although they had no previous relationship with Mrs. Kroc, NPR officials were approached to share their vision with the generous philanthropist. It didn’t take Stern and his colleagues long to hop on a plane to California to meet the hamburger heiress.


As he recounts in his provocative book, “With Charity for All,” soon into that fateful meeting Stern realized that Kroc wasn’t a particularly big radio listener and, like many people, she was a bit foggy on the distinction between NPR, PBS and even the BBC. The NPR team left the meeting hopeful for some Kroc largesse but not expecting any major gift.

Stern eventually served as NPR’s CEO and experiences like the Kroc affair while at the helm of the vast nonprofit organization informed his critical appraisal of the often serendipitous decisions behind charitable giving.

“Americans’ investments in charities are impulsive, driven by anecdote, and… occasionally even destructive,” Stern writes.

Stern, a friend and business associate, told me his purpose in writing the book “was to challenge … unquestioned assumptions about how we give, who we give to and how we should think about the charitable world. There are many extraordinary charities out there, as well as many bad ones, but our system and our donors don’t properly sort out the good from the bad in any useful way.”

Nonprofits are everywhere around us, deeply embedded in the fabric of American life. There are 1.5 million nonprofit entities in the US; the sector employs millions, annually takes in over a trillion and a half dollars in revenue, receives $500 billion in government grants and accounts for 10 percent of the US economy.

Beyond examining donor psychology and its impact on the direction and decision making of charities, Stern lends particular focus to the absence of any objective authority to guide donors on the performance of nonprofits. And he reminds us that nonprofit doesn’t necessarily mean charity, even if our tax system makes no such distinctions.

Most fee-charging hospitals, universities, and museums are nonprofit. So are religious organizations and the NCAA and their bowl games. Research institutions and foundations – a separate Kroc donation of $1.5 billion to the Salvation Army notwithstanding – tend to attract the largest gifts.

As for giving, Stern shows that the poorest among us donate a higher percentage of their income than the richest.

According to a report commissioned by the Delaware Alliance for Nonprofit Advancement (DANA), in 2010 nonprofits generated $5.3 billion in revenues and provided more than 60,000 jobs in Delaware – 14% of all jobs in the state (the largest non-government employer in Delaware is the nonprofit Christiana Care). The paramount importance of nonprofits in Delaware – providing critical social services to those in need, doing things government or private companies can’t or won’t – is recognized by many local businesses who see win-win opportunities in partnering with them. BBC Tavern & Grill, for example, hosts multiple, tremendously successful “guest bartending” events each week, annually raising hundreds of thousands for nonprofit causes. TownSquareDelaware.com was founded with a core purpose of amplifying the work of Delaware nonprofits, covering the events, issues and people of more than a hundred and fifty organizations since its inception.

The irreplaceable role of nonprofits has a unique heritage in the US. Nearly 200 years ago, one of the first and greatest observers of American life, Alexis de Tocqueville, noted our proclivity to look to non-governmental “associations” to advance the public interest. He wrote, “Americans use associations to give fêtes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools.”

There’s no one in American life that carries the de Tocquevillian torch more effectively than David Rubenstein, a founder of the Carlyle Group private equity firm, and his giving is anything but “destructive.”  The billionaire Rubenstein has made his philanthropy an exercise in patriotic expression, directing significant amounts of his wealth to support historic treasures that all Americans can enjoy. This includes funding repairs of the Washington Monument, lending a rare copy of the Magna Carta to the National Archives and actively championing civic education by, among other efforts, supporting an exhibit featuring an original print of the Bill of Rights now on display at the National Constitution Center in Philadelphia.

This is an inspiring site to behold, presented aside early copies of the Declaration of Independence and the Constitution, and it is worth the trip up I95.

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1 Comment

  • In fact Christiana and most Hospitals that claim to be non-profit are very much in the business of making money and compensating top employees very comfortably. I find the number 60,000 non-profit jobs in Delaware quite possibly an exaggeration. We only wish non-profits operated in reality as charitable institutions.