Philanthropy has lost its way.

• Author: Dennis, Kimberly O.

"Why spend $100,000 on a soup kitchen to feed the hungry when you can spend the same amount to produce a study that will influence legislators to increase Federal spending on food stamps for all?"

The nonprofit or independent sector is growing at a tremendous pace in America. It is becoming an increasingly significant part of public and private life. Total giving by individuals, corporations, and foundations has risen more than 250% - from less than $10,000,000,000 in the mid 1950s to well over $100,000,000,000 today. Another index of growth is the fact that there are nearly 1,000,000 nonprofit organizations operating across the country. As members of the baby boom generation age and inherit from their parents, roughly eight trillion dollars in wealth will pass from one generation to the next. This is bound to bring another enormous infusion of funds into the independent sector.

As the nonprofit sector expands, its relationship with the for-profit and public sectors will become even more important. Unless Americans have a philosophical perspective about what the proper role of this sector generally ought to be, they won't be able to judge whether it is performing as it should. It is my contention that philanthropy and the independent sector are most effective when they promote independence rather than dependence, economic growth over redistribution, and private initiative as opposed to public undertakings. These may not sound like terribly profound or controversial ideas, but they are considered quite radical by much of the philanthropic community. This is because the independent sector still is deeply entrenched in the redistributionist, interventionist rhetoric that characterized the 1960s and 1970s.

Leaders of the independent sector would do well to remember that philanthropy does not exist in unfree societies. There is no evidence of private philanthropy in Cuba, nor was there in the former Soviet Union. In fact, it is not even seen much in Europe, where social services largely are provided by the state and contributions to nonprofit organizations typically are controlled by political parties. It is no coincidence, then, that America, one of the freest countries in the world, has by far the most active and generous independent sector.

I have met with many reformers interested in developing independent sectors in their countries. Those from formerly communist regimes in Eastern Europe and the Commonwealth of Independent States describe decades of economic and social deterioration and the terrible hardships they are enduring in the difficult struggle to become free. They have seen and read about the way Americans respond to people in need and want to create...