Monday, March 01, 2010

The Third Wave: The Survival of the Philanthropists or The Hidden History of the Non-Money Economy in the USA


First of all, let us take a look at the statistics approximately more than 8 million of paid employees were in 2006 working for a nonprofit organization [AKA not-for-profit or NPO], i.e., the 8.11% of all paid employees of U.S. In addition, more than 21 million people worked for the Government in 1996. Volunteers are not included in these figures; by the way, the number of volunteers has dramatically increased over the last years, especially during this economic crisis. Our volunteers now represent one of the major sources of labor in USA because between September 2007 and September 2008, approximately 26.4% of Americans over the age of 16 volunteered, in one way or other, through or for a Nonprofit organization. This percentage has been almost the same at least since 2003. (Source: Current Population Survey, September 2008) . For example, in a thirteen years period, from 1977 to 1990 the number of nonprofit and government entities grew 21.2 percent. Now according to the National Center for Charitable Statistics [NCCS], it is estimated that there are almost 2 million of nonprofit organizations in USA if we add together the public charities, the private foundations, trade unions, public arts institutions, fraternal organizations, chambers of commerce, civil leagues, clubs, congregations and churches [governments and government agencies are not included in these figures, in spite of their similarities with the NPOs, because they are considered a different type of organizations altogether]. All these types of organizations have grown, and they are continually growing at a approximated rate of 7% per year.

The Non-Money Economy
A Nonprofit Development in USA

The voluntary-Civic Model or “Today For You, Tomorrow For Me”

The importance of the non-for-profit development is reflected by the decision of the former Mayor of New York, Dinkins, to set up a building on wall street dedicate exclusively to the nonprofit sector; with this action the former Mayor recognized how crucial the non-profits have become for the city of New York. Anyway, how all these "non-money" or non-profit organizations have become so important for the economy of USA? How these ideas, or concepts have become so ingrained into a supposed [USA] all the way capitalist-centered system? Their evolution has been divided, by many experts, in four different and major stages or periods; therefore, let me introduce them in here, from the earliest to the latest. Once upon a time there was a young English colony which in one point would become the strongest country in the world. Do you remember the pilgrims? or Daniel Boom, the folk hero from Kentucky? Even before all this, why not mention the Native Americans? Yes, in those times there were not factories, this was the time when people knew how to help one another, live according to mother nature and, care from one another. Although, they did not have other choice either, because the government was not there for attending those needs that circumvent the individual means. Neighbors understood each other issues and did something to support one another, as Kropotkin mentioned, there was more mutual aid and cooperation that competitiveness and struggle, less "capitalism" or whatever, and more humanism. It can be inferred that everyone would have received "services", or aid, from his or her “proxy” samaritan neighbor. As following those lines, “today for you, tomorrow for me.” This was the time when you see people protecting others. Nope! This is not a fairy tale, but once upon a time, in a land that it was known as the "New World", this is America people not only believe in freedom, they also believe in helping each other. This period, this era, which can be incomprehensible for some people nowadays, it is called: {1st} The voluntary-Civic Model. This model comprises all those years from 1620 to 1890; yes!, just almost kissing the already consumed 20th century. Yet, life must go on, be changed and be transformed; and the American dream somehow needed to be awake . Therefore a new, as altered, era started when America was getting industrialized, and it was converting itself, perhaps without knowing it, into the world’s “juicy Lucy” o "Prima Donna".

America: The Beauty and the Beast - The Era of Philanthropic Patronage

In a time in which America was, both, the beauty and the beast of the Industrial revolution, we are told by historians, and other sort of writers, that there were all these people, with great and gigantic as ambitious ideas, who would create, at the time, the biggest monopolies known in the history of our western civilization. Thus, the Fords, the Rockefellers, the Morgans, The Fricks, The Carnegies, these families, and more of their type, developed a "helping crusade" for the arts, sciences, and technology, which appear to have helped to boost America’s educational system and economy in the infancy of the agonized last century. In reference to this era and, in his "Memoirs of a Revolutionist”(Paroles d’un Revolté) the Russian philosopher Prince Petr Alekseevich Kropotkin, then 43, declared, something that should be familiar for most of Americans today; he stated that the “Golden Age of the small farmer is over . . . He is in debt to the cattle-dealer, the land speculator, the usurer. Mortgages ruin whole communities, even more than taxes" (1861—1905) [Well, today the mortgages have almost ruin the whole world's economy]. So, “tara-lin and tara-lan", the foundations, mysteriously, started to flourished and showed-up for all over the American soil, and this was called {2nd} The Era of Philanthropic Patronage. If we like to put this era into a time frame and within context; it consisted from 1900 to 1920, coinciding precisely with almost all the inventions that are being utilized to wash our brains or create unnecessary needs, till today, i.e., the Radio, the Automobiles, the television (1927). Nevertheless, the almighty "Great Depression" soon would come, and so would come Roosevelt, with both of them a new era with a new deal for the American people would reach the USA.

The New Deal for The American People Their Rights or Entitlements

The government dramatically learned to support its people with Social relief programs and institutions. This period is called {3rd) The Rights or Entitlements. Starting on 1930’s and finishing in 1960’s. Franklin Delano Roosevelt (AKA FDR), who was elected in 1929, as Governor of New York, also was elected President; he took office in 1933; and up to this day, he is the only US president who has been reelected for tree terms,[in 1932, 1936, and 1940] because he was very popular. In the history of USA he is considered one of the best US Presidents of all times. He would die in office at the early age of 63 year-old. During his brilliant presidency, he would practically overcome two of the most problematic crisis in the history of United States: The "Great Depression" and, the WWII. During the most difficult times, FDR would say to the Americans and to the people of the world, "There is nothing to fear but the fear itself”, and I believed with his "New Deal" he never forgot the minorities, the workers, the people of United States, spite of the tremendous economical distress and the dangers and hard choices and demands of facing one the most cruel evil axis in the Second War world, and thus his mind, heart and spirit were able to identify and remember “the man at the bottom of the economic pyramid.” FDR, as a visionary, was envisioning a new turning point for the American society, a period that would change once more the dynamics within the evolution of non-profit sector, i.e., {4th} The Competition or Competitive/Market.

The Nonprofit Competition or The Survival in a Philanthropic Market

This final stage comprehend the years, from 1970 to 1990. Under this period it was not easy to get an education; the democrats had changed, perhaps because they did not control the congress anymore, it was a "Do-it-by-yourself” attitude. Non-profits started to suffer plenty of competition, many institutions were pungently doing the same thing, they were trying to attract monies from scarce sources; even though there were resources out there, they were not likely to be easily access.

All of this suggested that there were urgent needs to utilize proven strategic marketing mechanisms, with which the non-profit managers could address their sources of income, as their constituencies, more directly, efficiently and effectively. Although the nonprofit Sector still needs to relay on the individual willingness to share, the generosity of the wealthy, and on the federal, state or local governments funding to survive.


To illustrate the importance of the non-profits, let us focus on the present conditions in one social arena of United States: Its children. US has an average of 2.3 children per household, this fact indicates that these children are in need of human services Furthermore, it is a call for a proactive response. It is also one of the reasons why the non-profit sector has grown, and should continue growing, rapidly. The idea behind is that, no matter what the economic conditions, many people, equally, would not "make it". Some people just would have not the income, nor the skills or else, that could cover the cost of their living; thus the non-profit sector represents a way to provide services that some people could not have if this sector simply would not exist. The need for human services, the need for medical services or health insurance coverage, for the children and for their parents, conform only one facet of ours today’s social-fabric reality. There is the need of housing, schooling, jobs, training and, so forth. Now everybody knows that a country without children has not future. Today, even the almost erased middle class is struggling, and in fact they are being the main recipients of the most important social programs, even the rich have enjoyed, and still perusing, the remains of the welfare state, as Dr. Parenti would emphatically used to say. So with 632,000 (43%) Tax-exempt organizations reporting to the IRS among other non-government or non-business, churches, and the Government itself; we could state that new transformations should appear for the years ahead in the non-profit universe. I just hope that these changes do not come to signify an involution, if not a happy middle and harmonic term between, or if the reader wishes, among extremes but as we are sadly watching lately, the "extremes and the extremists" are becoming more, and more, unstable, not only in USA but elsewhere in the world.

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