Even in the midst of the nation’s financial sector meltdown prompting a societal march toward a long and deep economic recession, far too many people who should know better have decided to blame the Community Reinvestment Act for the subprime foreclosure crisis and the implosion of commercial banks and mortgage brokers.
The nonprofit sector knows better—and had better get on the stick to advocate against efforts to weaken this absolutely vital component of national policy. Enacted in 1977 “to encourage depository institutions to meet the credit needs of lower-income communities” (emphasis added),[i] CRA became a crucial tool for reversing the prevalent banking practice of racial and geographic “redlining.”
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A bailout package is ready to be voted on by Congress, but that doesn’t obviate the concerns of Nonprofit Quarterly readers who by and large believe that the bailout and the conditions that led to it reveal something fundamentally wrong about our society. The so-called Troubled Assets Relief Program (TARP) may even be necessary to jumpstart liquidity and credit in the financial sector, but it is for many a bitter pill to swallow.
We asked NPQ readers to “sound off” on the bailout, and boy did they ever. Rather than moaning about the loss of potential philanthropic grants from now semi-comatose or dead Wall Street behemoths, NPQ’s commentators went to the heart of the issue. They know that no amount of charitable grantmaking from Fannie Mae, Freddie Mac, Bear Stearns, or Lehman Brothers makes up for the shortfalls nonprofits face everyday as a result of long-term disinvestment in the systems on which the least well off Americans depend.
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In the wake of the federal government’s intervention in the financial markets this past week—unprecedented since the Depression era banking legislation put through by Franklin Delano Roosevelt—nonprofits should not look to philanthropy from commercial banks and investment firms to soften the blow of the ailing economy and the inevitable impact on the nonprofit sector.
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CR should take a vacation, announcing that gratifying and rare activity like so many other online publications, but that somehow never happens here. Our substitute version is a “where’s Rick” round-up of our writings for other publications plus some notes regarding CR-topics getting coverage in the nonprofit and mainstream press.
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Imagine the postcards that delegates to the Democratic and Republication conventions will send to their families back home the next couple of weeks:
Attended lots of fundraisers for charity at the convention, got to hobnob with our favorite lawmakers, met lots of people who I think might have been lobbyists, but they didn’t really have to say so, grabbed lots of corporate knickknacks, do-hickeys, and whatnot that they handed out, a good time was had by all, see you soon!
Yes, happy days are here again, for the special interests that get to use the national parties’ conventions as venues where they can coagulate around lawmakers and delegates to ply their trade without the formalities of bothersome practices like much transparency and disclosure. They can thank the Congressional leadership of both parties for having loosened the reins on how lobbyists and special interests might use charities as venues for cozying up to national legislators.
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