Private philanthropy is one of the most powerful tools in times of crisis. Peter Lipsett, vice president of Donors Trust, joins the podcast to explain why big government programs and bailouts often have unintended negative consequences.  

Lipsett explains how we can help our communities economically during the coronavirus pandemic and challenges Americans to think about crisis situations with the future in mind.

It is up to the American people to maintain a free and prosperous nation for our children and our grandchildren. Handing over excessive power to the government now can have long-term negative effects. Listen to the podcast below or read the lightly edited transcript.

We also cover these stories:

  • Coronavirus deaths hit 1,000 in U.S. as global death toll passes 20,000.
  • The House is set to vote on the CARES Act Friday, per House Speaker Nancy Pelosi, who’s also already looking at another new bill to tackle it.
  • Unemployment claims surge to 3.3 million as coronavirus devastates economy.

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Virginia Allen: I am joined by Peter Lipsett, vice president of Donors Trust, a donor adviser fund committed to protecting our nation’s constitutional liberties and strengthening civil society through private institutions, rather than government programs. Peter, thank you so much for being here.

Peter Lipsett: Thank you for having me, Virginia.

Allen: To begin, can you just explain a little bit about what a donor adviser fund is?

Lipsett: Sure. A donor advise fund is, you can think of a little bit like a charitable savings account. So donors put dollars in, immediately get their tax deduction for that, and then they’ve got this little pot of money set aside explicitly for charitable grant-making. Once it’s in the fund, that’s what it has to go for. It has to go to 501(c)(3) charities.

There’s a lot of reasons that people use donor-advised funds, from just the fact that it simplifies their giving, just have it all in one place. We do the back-end work, so we write the checks from the donor-advised fund and the donor just gets to focus on the fun part, which is figuring out what causes they really want to advance.

There’s good tax reasons to do it. It’s a lot simpler than say, setting up a private foundation. It can be a little more private for donors who value their privacy and their giving, and the ability to give without having their name attached, which is important to some people. So, a lot of reasons.

There’s a lot of providers out there. And our unique niche is the fact that we’re focused on that liberty-minded donor who really wants to use their philanthropy to advance the ideas of limited government, personal responsibility, and free enterprise.

Allen: Yeah. Well, let’s talk a little bit more about that because, like you said, one of those pillars of conservatism is this idea of personal responsibility. And that really extends to our communities at large, whether that’s our churches and our families in the towns that we live in.

Can you explain how Donors Trust is a part of actually serving the needs of individuals and communities apart from government programs on just a really practical level?

Lipsett: No, that’s a great question. We really do see ourselves as a community foundation, similar to the geographic community foundations that you see in your city or county or regional area. Those are bound by geography, we are bound by ideas.

We care about advancing these principles of liberty, and that means we spend a lot of time with the donors who care about that sort of thing. But we also spend a lot of time with the grantees, organizations like The Heritage Foundation and so many others in the think tank community, the student organizations out there that are helping to take these ideas, all those types of organizations.

We spend a lot of time really trying to know what people are doing, understand their priorities so we can go back to the donors and help them with their giving and help to say, “Hey, there’s this new project going on with this organization. It’s right in the wheelhouse of what you care about.”

And hopefully through all of that we see more money going into these sorts of causes, more philanthropic dollars moving, not just to the liberty organizations, but also to those civil society organizations that really form the backbone of the country and are so important to everything. The churches, the Boy Scouts, the Salvation Army, the local arts group, all of those things matter, too.

Allen: Yeah. Obviously, right now with the coronavirus, we’re seeing that civil society is being drastically affected very, very quickly, and a lot of people are finding themselves in really difficult financial situations. But for those out there that maybe have a little bit of money that they can use to bless others or a lot of money that they can use, what advice would you give to them?

Lipsett: Yeah, there’s so much need right now, as you say, and for a lot of reasons.

Obviously, there’s a public health crisis, and we’ve seen some of the major donors, you have the Chan Zuckerberg Initiative, the Gates Foundation, the ones that can throw eight and nine figures worth of dollars at a situation, really jumping in on the health piece. And that’s probably a great place for them.

I think your typical donor, the donor who doesn’t get to spend eight or nine figures worth of cash, I think there’s a few other places, particularly in those harmed by the economic effects and the fallout of the disruption that’s happening as a result of all of this.

Organizations that care for the elderly, for example, so many of them are really getting isolated and not even able to see their families in some cases.

Organizations like Meals on Wheels become even more important in times like this. Obviously, those dealing with the economic effects, the food banks and local organizations that can help people ride the storm out are really important.

Frankly, actually, being charitable doesn’t always mean giving to charity. In order to advance our ideas and help those feeling those economic effects, it’s also getting a gift card from the restaurant that can’t open, but will reopen in a few months, and things like that. Thinking to make sure that businesses and the economy that we believe in so strongly can continue to thrive.

And then the last pillar, and we can talk about this in a little more detail, is really making sure our ideas don’t get lost in all of this.

Allen: Yeah. And how do we do that? Because, obviously, the government is moving forward and has just passed the CARES Act, and we’re seeing literally trillions of dollars being pumped into the economy for big business and small business.

So, what is that balance of finding the value of really that grassroots involvement in pumping citizens’ money into the economy versus government?

Lipsett: Yeah. I think there’s obviously a real risk that a lot of the liberties that we care about, the freedoms that we care about, just the economic strength and resilience that we care about can get themselves pushed out the door in this rush for government to do something, right?

The bill that you’re talking about is a great case in point. Who knows what’s in there, frankly. But it’s probably not going to have a lot of good things for those of us who really believe that the government should be smaller, not bigger, that people should be more free, not more restricted.

And the great network of state think tanks and national think tanks and advocacy groups, citizen education groups that are really starting to realize, “Hey, this is an issue, and we can actually do something about it.”

These think tanks in particular are really leveraged to quickly come back and say, “Hey, we need more nurses in the state. You, the legislature, has set up all of these restrictions that don’t allow people from the next state over to come and help in our hospitals. Let’s get rid of those barriers.”

And in some states we’re seeing that take place. We’re seeing things like plastic bag restrictions getting stripped away in Colorado and New Mexico and elsewhere from a hygiene standpoint, that all of a sudden bringing these reusable bags may not be the right thing to do. They’ve good reasons to do it, but sometimes we need a little more flexibility.

So, I think it’s exciting to think that the freedom movement is able to push back on some of these places where government is overstepping or has overstepped in the past and really raise a flag to say more freedom could actually get us through this crisis a little bit better.

Allen: … When you really get down to the nitty-gritty of it, if someone comes to you and asks, “Well, why not have the government give millions and billions of dollars in a day, they ‘have it,’? Why is it better to have citizens and that smaller grassroots-level engagement?” [What would you say?]

Lipsett: It’s a great question, and I think people on our side take for granted the fact that we know philanthropy is a good thing and reflectively understand it, but it’s good to re-articulate why that’s so important, particularly in civil society.

One of the reasons is it just moves faster. Take for example, we’ve mentioned the stimulus bill, it hasn’t even passed the House yet. It’s passed the Senate, [the] president hasn’t signed it. In theory, there’s going to be money coming out of the government into people’s pocketbooks, but that is weeks away, maybe months away.

Who knows how long it’s going to take them to get that money out. Whereas churches and elder care groups and the food banks, etc., are already there.

They’re already knitted into the fabric of these communities. They’re already on the ground helping people get through some of these things, even giving them checks in some cases for organizations that are equipped to do that. And more importantly, those same organizations are going to be there after the government steps back.

The government money is a blip. The government intervention hopefully will be a blip, but the Meals on Wheels is still going to be serving the elderly population in two years and in five years and hopefully in 20 years.

And then third, you get that human connection. Government is a big, faceless bureaucracy. That’s what it’s built to be. That’s not an insult. That is what it is. But the person running the local soup kitchen knows the people coming in there and knows when they may look a little sick and they need a little intervention.

That human connection matters so, so much in actually giving, caring.

The Senate calls their bill the CARES Act. Care really comes through human connection, human philanthropy, and human involvement.

Allen: That’s so good. That makes so much sense. Can you give us maybe some practical examples of times when we really have seen philanthropy have that positive effect and that positive impact, whether that was after a natural disaster of some sort or another challenging situation that we as a nation have faced?

Lipsett: One of the more recent major examples of that I think has really been after Hurricane Harvey, when it just devastated Texas and Houston in particular. And you saw a lot of really great nonprofit groups rise up. …

[Team] Rubicon is one that was … just these off-duty military guys who came in and just dug people out, moved people around. FEMA [Federal Emergency Management Agency] wasn’t there yet. And when FEMA was gone, [Team] Rubicon was still there and there’s a lot of organizations that can move quickly.

Red Cross gets pummeled, rightfully so, every once in awhile, but they are quick to be able to move. They’re built for times like that where they can come in quickly and inject some help, have they have cots at the ready.

What’s different here, what’s so weird here is we are, I think, better equipped to deal with the earthquake and the hurricane and the tornado, and here we have this situation where … it’s beautiful outside, we have this extended snow day with no snow, but there’s a real crisis.

I think that’s making people a little slower to act. Nobody quite knows how to act. And the fact that you can’t per se put hands on somebody to help them in this situation makes it a little trickier because that’s what philanthropy is so good at. And I think that that poses a challenge for philanthropy and requires organizations in this current crisis to really think creatively.

Allen: Yeah. So with the organizations and the individuals that you work with, what is the advice that you’re giving to them? Because it is a really tricky situation where you say, we’re not able to necessarily all gather to help our neighbors who are sick. We’re being told to stay home and stay away.

Lipsett: Yeah. So much of what we do is in that think tank community. So, I’ll focus it on that and how do we make sure that the economy gets going again and our liberty and rights get protected in all of this.

The challenge that we’re giving to the organizations that we work with and a lot of our donors care about is to be creative. To look at the situation and say, “The work you do is important and it matters and it still matters in this current situation because we’re going to come out of this and we need to be a strong, resilient country again.”

So we’re trying to figure out, how can we help those organizations get catalyzed toward action?

We’ve actually begun a new fund to help donors who know they want to help but don’t necessarily have the wherewithal to figure out all the different projects out there.

We’re helping to kind of corral some of that support into a growth and resilience fund, with Donors Trust playing that community foundation role that we do to help some of these nonprofits take advantage of these opportunities, to push back against some of the regulations that are standing in the way of peoples lives—both in this crisis and normally—and rules that are blocking the health or the education or the workforce recovery that we really need.

And so, we’re excited about that and excited to be a part of, hopefully, catalyzing some new action that will not just get us through this crisis, but will have a long-term positive effect for the country.

Allen: Yeah. And I really want to thank you for your work with that because that’s something that here at The Heritage Foundation we are so passionate about, that we want to be really a pillar of freedom and of civil society for America.

That when we do come out of these difficult challenges and situations, and even all through it, that we can be messaging, OK, this is how you can move forward in a way that furthers our freedom and that allows our generation to enjoy the freedoms that we have instead of waking up on the other side of these travesties thinking, “Wow, we sacrificed a lot in order to get through that.”

So, thank you.

Lipsett: Right. That’s so true. You can be excused for a knee-jerk reaction that says, “Well, think tanks and policy groups and citizen education groups, those don’t really matter in a crisis like this. Those are not the compassionate way to give.”

But I want to push back on that thinking for exactly the points that you were just making because it is compassionate to think about the long-term welfare for people and for liberty and for their freedom.

Because by stripping away these regulations, by making it more easy for businesses to form, [for] people to get back to work, [for] people to get the education and job training they need, that’s good for prosperity, that’s good for everybody.

And so yes, it’s a longer-term play. Yes, it doesn’t per se put a meal on someone’s table today, but it makes sure they can eat tomorrow, and that is, frankly, as compassionate as I think you can be.

Allen: Yeah, I agree. So, how can our listeners find out more about the work that you’re doing and that Donors Trust is up to?

Lipsett: Sure. Donorstrust.org is our website. If you’re under 40 and listening to this, we have a special program called the Novus Society, novussociety.org, focused on engaging donors under 40 and building those philanthropic muscles for them because the great donors that we have today need to one day be replaced by great donors that aren’t giving as much yet. We believe in that continuum of giver.

So, [you] can go to either of those websites, learn more about us. I’m always happy to chat about how folks can think about giving to these ideas, supporting these ideas, and also just leveraging the power of a donor-advised fund as a vehicle for simplifying, protecting, and giving in a more tax-advantage way.

Allen: Great. Peter, we really appreciate your time today. Thank you.

Lipsett: We appreciate all that you do and all Heritage does and appreciate you having me. Thanks.