PND - 2006: Preview of the Year Ahead

Posted on December 30, 2005

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2006: Preview of the Year Ahead

PND Special Issue: 2005: Year in Review - 2006: A Preview of the Year Ahead

Long before the one-year anniversaries of this year's devastating hurricanes (Katrina, Rita, and Wilma) arrive (amid the fifth anniversary of the 9/11 attacks), stories about the rebuilding of New Orleans and the Gulf Coast and what has or hasn't been accomplished will be commonplace. The contribution of organized philanthropy to the effort will be part of the story. As George Penick, the founding president of the Foundation for the Mid South, told PND in October, "Katrina and Rita have forced a lot of national funders who had never invested down here to realize that this is more than a regional problem...[I]f only one positive thing comes out of this situation, I hope it will be that people around the country understand that issues of racial and social inequality are still alive in our society and that, especially in the mid-South, we need to make sure that efforts to address inequality are built in to everything we do going forward."

It's a message that seems to have been heard by America's corporations, which pledged or contributed more than $540 million in cash and in-kind gifts to hurricane relief and recovery efforts. More than ever, experts say, com- panies see their philanthropic activities as both a key component of their brand strategies and as an important aspect of good corporate citizenship. Look for a continu- ation of the trend in 2006.

Ironically, the disasters of the past twelve months may result in an anomalous "golden year" of philanthropy — something that should become clearer when the Giving USA Foundation issues its annual report in June. Although the more than $1.5 billion raised in the early part of the year for tsunami relief, the nearly $3 billion contributed after hurricanes Katrina and Rita wrecked much of the Gulf Coast, and the $50 million raised for victims of the October earthquake in Pakistan represent a small percentage of total charitable giving in 2005, don't be surprised to see the final total set a new record, boosted in part by Congress's passage of the Katrina Emergency Tax Relief Act, which some predict could generate upward of $10 billion in additional giving by year's end.

Education reform will remain an area of great concern and interest to organized philanthropy in the new year. Already the fastest growth area, in terms of giving, within the nonprofit sector, funding for education should retain that distinction as foundations and individual philanthropists continue to shift resources to elementary and secondary school reform. As Richard Lee Colvin, director of the Hechinger Institute at Teachers College at Columbia University, notes, "A lot of the old philanthropy was devoted to helping schools do what they were already doing. The new group�Bill Gates, Eli Broad, the Waltons, [Michael and Susan] Dell, [Michael] Milken — [want] to change the schools, [and] use their money to support specific school reforms."

Last but not least, look for changes on the regulatory front in 2006, as the Senate Finance and House Ways and Means committees work to move stalled legislation affecting the sector out of their respective chambers and into conference. Debates over the need for more regulation of donor-advised funds and the tax-exempt status of large nonprofit hospitals and universities are likely to be particularly contentious; the recommendations contained in the final report of the Panel on the Nonprofit Sector less so. As for whether nonprofit sector reform becomes an issue in the mid-term elections in November, only time will tell.

In the meantime, Happy New Year to all!

— The Editors

Donors Continue to Give as Year Comes to a Close (12/19/05)

Campaigns at Atlanta's United Way, Woodruff Center Competing for Scarce Dollars (12/16/05)

Nonprofits, Foundations Still Bracing for Tax Legislation (12/15/05)

Robert Wood Johnson Foundation Announces Long-Term Recovery Grants for Gulf Coast (11/02/05)

Nonprofit Consolidation Predicted for 2006 (11/16/05)

As Donations to Fight Poverty Lag, Congress Questions Definition of Charity (11/15/05)

Corporations Leery of Supporting Controversial Causes (11/09/05)

Katrina Tax Provision Could Provide Windfall for Charities (10/28/05)

IRS Offers Leave Donation Program for Katrina Relief (10/07/05)

Congress Passes Amended Katrina Tax Relief Package (9/23/05)