Current Events and Philanthropy / Oral History/Testimonies

The Beginnings of Independent Sector and Why They Matter

Editors’ Note: Last Week, Pablo Eisenberg, for decades one of the nation’s leading progressive critics of foundations, wrote an important op-ed in the Chronicle of Philanthropy calling for six reforms necessary to strengthen the nonprofit sector in the Trump era. One of those involved changes to Independent Sector, transforming it into “a new powerful coalition solely of charities.” In making his case, Eisenberg referenced the early history of the Independent Sector. Our appetite whetted, HistPhil asked him to elaborate on that history for us.

The beginnings of Independent Sector date back to the report of the Filer Commission on Private Philanthropy and Public Needs, issued in late 1975. The report, Giving in America, recommended the creation of a permanent quasi-government organization “necessary for the growth, perhaps even the survival, of the sector as an effective instrument of individual initiative and social progress.”

After consultations with John Filer, some members of the Filer Commission and a few Treasury officials, the Treasury Department established a new quasi-public, independent commission. Half of the new commission’s membership would be named by the President and the other half by the Presidential appointees themselves. Funding for the Commission would come half from government and half from private sources. At its first and only meeting, the members were welcomed by Secretary of the Treasury, Michael Blumenthal.

I, Bob Bothwell, head of the National Committee for Responsive Philanthropy, and several other representatives from nonprofit groups found ourselves sitting on the new commission, pleased that the membership was diverse and more representative of the sector than might have been expected. Several days later Secretary Blumenthal announced the Commission’s dissolution.

No one is quite sure why this happened or exactly who put pressure on the Secretary to disband the group.

But some of us suspected that prominent nonprofit leaders such as the heads of the United Way and the American Red Cross, and even John Gardner (former Secretary of Health, Education and Welfare and former director of the Carnegie Corporation), were worried that an independent commission with a sprinkling of community and grassroots representatives, as well as activists like Bothwell and me, would be too progressive, and therefore detrimental to the established nonprofit sector. We could never prove this suspicion, but we do know that throughout the immediate post-Filer period these individuals and a few others were holding private policy meetings regarding the future structure of the sector.

After the short-lived Treasury commission’s abrupt termination, the sector’ two largest infrastructure organizations, the National Council on Philanthropy and the Coalition on Voluntary Organizations, hired Brian O’Connell, former head of the American Mental Health Association, to look at the future direction of the two organizations and the potential for improving the sector.

Brian ‘s report recommended that the two organizations establish an organizing committee that would meld the two into a larger, more inclusive organization chaired by John Gardner. Brian became the executive director of the organizing committee and subsequently of Independent Sector. The committee had a top down feel to it, a development that led some of us to critique Gardner or oppose Independent Sector’s creation.

Gardner believed that an organization composed of both nonprofits and donor institutions would soon be dominated by foundation and corporate members. Because of his respect for and appreciation of the work Brian had done to develop Independent Sector (IS), however, Gardner agreed to Brian’s insistence that IS become a mixed group.

As I mentioned in my recent piece in the Chronicle of Philanthropy, Gardner’s prescience proved to be right. IS quickly morphed into an organization controlled by its donor members. Only O’Connell’s forcefulness and integrity kept the group balanced.

Under his leadership, IS expanded into an organization with slightly over 1000 members, and, although it never accepted local members during his tenure, he repeatedly tried to reach out to local communities and their organizations. And, unlike his successors, he and his board became involved in budget battles to save safety net programs and took a broad view of IS’s social mission, much beyond the narrower nonprofit concerns. After his retirement, IS lost many of its members, its commitment to social justice a broad view of its mission.

That history is why in my Chronicle article I called for transformative reforms of IS, making it a more powerful force for nonprofits with an agenda that goes beyond narrow nonprofit self-interests.

-Pablo Eisenberg

Pablo Eisenberg is a senior fellow at the Center for Public & Nonprofit Leadership at Georgetown University’s McCourt School of Public Policy.

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