The Role of National Standards in Public Policy

By Andrew Schulz, Vice President of Legal and Governmental Relations, Council on Foundations

With Foundations on the Hill taking place this week in our nation’s capital, I started thinking about how much fun it is to visit members of Congress as part of a contingent that is so well-respected and appreciated. While this good will applies to all of our philanthropic colleagues, it is especially true about community foundation participants. Community foundations are universally well regarded in the halls of Congress, and they should be. By adopting National Standards nearly 15 years ago, community foundations led the way by proving that rigorously designed and well-executed self-regulation can be far more effective than more legal rules and regulations. It wasn’t easy, and a tremendous amount of work was involved, but the dividends are evident and are paid out over and over again. In the arena of public policy alone, there are numerous examples of reaping the rewards of the field’s hard work:

• Even early on, when standards were relatively new, community foundations were largely immune from the criticism being levied on other charitable organizations. In 2004, Sen. Charles Grassley (R-Iowa) now famously quipped that the sector had become a “cesspool” of “unchecked abuse.” Yet even then, community foundations were widely exempt from such criticism, serving instead as models of charity done right. This reputation was in part because of National Standards

• In 2006, when reforms were enacted to address the abuses Congress was concerned about, community foundations were again well-served by standards. While other organizations floundered or failed trying to grapple with the changes, community foundations were well ahead of the curve, having already done most of the hard work to comply with standards.

• The IRS has been auditing community foundations for more than a year now. With more than 30 completed (and possibly many more), the IRS has found no major problems—proving that community foundations are well-run institutions dedicated solely to serving their communities.

• In December, the Treasury Department published a comprehensive report on supporting organizations and donor-advised funds. The findings of that report were overwhelmingly positive. Although the scope was broader than community foundations, there is no doubt that the standard of excellence established by community foundations and documented through the standards process contributed to the positive outcome of that study.

While each of these outcomes is not entirely the product of National Standards, it is indisputable that the foresight of the field in anticipating, adapting, and taking action to create standards paved the way for these successes. By choosing to both create and comply with National Standards, community foundations have not only served themselves well. They also have served their communities, the field, and the nation—and will continue to do so for many years to come. It is with this history, pride, and well-deserved reputation that we head to Congress this week. As always, I look forward to the opportunity to accompany such a well-regarded group and to remind our lawmakers about the important work we do and that we do so well.