Susan G. Komen vs. Planned Parenthood: The Takeaway

The media and the public are a-buzz this week after the news that Susan G. Komen for the Cure has pulled all its funding to Planned Parenthood.  As would be expected, the reasons for the funding pull varied, depending on which side is speaking. Putting aside any personal and political views, this controversy, and the end-results, presents an interesting study into the world of nonprofit organizations.  Seeing where this controvery begins can help us understand a bit more into what charities and the general public can take away from this intriguing situation.

The Background

On January 31, 2012 news broke that the Susan G. Komen for the Cure has decided to halt its partnership with Planned Parenthood affiliates. In the following days, Komen founder and CEO, Nancy Brinker held that the funding was pulled due to policy changes intended to improve how grantees were selected. Brinker went on to state that grant changes were a result of a new strategy that included more stringent eligibility and performance criteria; standards which include discontinuing funding to any organization which is under federal investigation.

This investigation commenced in September 2011 and was launched by Representative Cliff Stearns (R-Fla) to determine whether Planned Parenthood has used pubic money to fund abortions, against public policy. This policy specifically is the Hyde Amendment. This amendment, passed on September 30, 1976 by the House of Representatives, was introduced in response to the US Supreme Court’s decision in 1973 Roe’s Vs. Wade decision to legalize abortions. This provision, although not a permanent bill,  has been routinely attached as a rider to annual appropriations bills since 1976. Stearns has also stated the investigation was launched after allegations of financial abuse and repeated reports that Planned Parenthood has ignored state and local reporting requirements in addition.

Representatives from Planned Parenthood seem to have a different take on this story.  They held that the both the investigation and the  discontinuing of funding are political politically motivated, and resulted from both congress and Komen bowing to pressure from anti-abortionist activists. This perspective has been supported by the hiring of Karen Handel as the new Vice President of Susan G. Komen for the Cure. According to Huffington Post, Handel had a run for the Governor of Georgia in 2010 on an aggressive anti-abortion and anti-Planned Parenthood platform, even writing a blog post on the fact that she does not support the mission of Planned Parenthood.

The Takeaway

The first and most glaring issue is the melding of politics and charities. Charities are permitted to lobby for or against a cause. They are strictly prohibited from undertaking any political activities. In looking at this case, it seems like neither occurred. However, there is the more glaring issue of perception. It seems as though Komen made a politically motivated decision. The hiring of a former gubernatorial candidate did not seem to help this perception.  This perception caused a public outcry. And this public outcry was heard. Less than four days after the announcement, Komen decided to reverse its move to cut Planned Parenthood funding.

The “owners” of Susan G. Komen for the Cure’s voices were heard. The system worked.

Who are these owners, exactly? The response is so simple, yet so complex. Exempt organizations are considered to be owned by the public.  Taxpayer money funds exempt organizations in a variety of ways:

  • Direct Federal Funding – increases government expenditures because money is diverted directly from the government’s budget to a charity
  • Individual Contributions – reduce the tax revenue to the government due to the reduction of income tax an individual / corporation pays
  • Tax exemption – reduced the tax revenue to the government due to the fact that charities pay no tax on net income

As such, charities, which receiving the benefit of deductible contributions and tax exemption, do have the burden of increased reporting and transparency. Charities, like any taxable entity, have the duty to report to its owner(s)–the general public. The result of this is that everyone–the government, news agencies, bloggers–has oversight into the operations of an entity. The public nature of the ownership leads to (what some may consider) intrusive and detailed reporting requirements. The tax filing for an exempt organization (Forms 990, 990-EZ, or 990-PF) mirrors the reporting that publicly traded corporations have to undertake. This report is also easily available for public viewing in a variety of places, most notably guidestar.org.

We can exhibit as much oversight as we want to these charities. While the board of directors governs the day-to-day activity of an exempt organization, we are able to exhibit our oversight when we review the Form 990. On this form, we can find out the names of the board members. We can find out the compensation of the insiders–or those who are the “decision-makers” of the organization. We can see how grants are reported. We can review the requirement for grantees and how the grants are monitored.  And our opinion about these things does matter.

The congressional investigation into Planned Parenthood commenced because of a concerned public. And allegedly, so did the removal of funding of Susan G. Komen for the Cure. A stronger segment of the public rallied and spoke out against the decision. That louder and stronger opposition affected the change that so many had hoped to see.

We as a public need to stay informed and educated as to the charities and exempt organizations that are active in our communities. It is important to monitor that these entities use the public’s money for the purposes that we, as a whole, want. It is also important for charities, their board of directors, and their insiders to keep this in the back of their minds as well, and to always remember it is the public that they serve, and not private interests.