Let's Not Forget Voluntarism

The Minneapolis Star Ledger passed on this, which is submitted BEFORE the IRS scandal broke. A  substantially different version appeared on Bloomberg Echoes last week.

Washington's budget impasse could be ameliorated if the government would allow the ancient  American tradition of voluntarism to again thrive.

Voluntarism means relying on voluntary action to achieve goals. It can be evoked and coordinated by non-profit organizations, mutual businesses, or for-profit stock corporations. When early Americans faced a problem requiring coordinated action they did not automatically run to Washington for aid. Instead, they studied the problem and attempted to solve it rationally.

Early Americans occasionally concluded that some level of government (rarely federal, sometimes state, usually local) was best suited to combat the problem. Typically, however, they believed that voluntarism was a better option. That sometimes meant forming a for-profit corporation but in specific areas of concern, especially insurance and banking, they sometimes found mutualism more conducive to solving their problems. Surprisingly often, they formed non-profit organizations (NGOs) ranging from charities to fraternal orders to health clinics to “encouragement” associations.

The overwhelming preference for voluntary over government problem solving is why early America has been called a corporation nation and a nation of joiners. By relying heavily on non-profit voluntarism, Americans essentially taxed themselves to combat social problems. They did so at a relatively high level because they closely controlled their own efforts and could focus on outcomes rather than inputs. If an initiative fell short of its goal, they had strong incentives to discern why and respond accordingly.

Beginning with the New Deal, however, voluntarism began to wane, shrinking to the point that Americans even started to bowl alone. It survives in pockets, of course, but today many Americans confronting challenges automatically turn to Washington for solutions.

I didn't understand why Americans today largely neglect voluntarism until I joined an innovative start up NGO called Historians Against Slavery (HAS). The organization exists to help the public to understand that although the Civil War and Thirteenth Amendment ended chattel slavery, they did not end labor coercion, which persists to this day in the form of trafficked sex workers, under or even unpaid immigrant domestic and farm workers and prison laborers, and other forms.

Given the importance of its cause, HAS found it easy to attract pledges sufficient to revamp its website, establish a scholarly book series, hold board meetings, and even plan a large conference for K-12 teachers, antislavery activists, and slavery scholars in Cincinnati this fall. But all that effort may go for naught because the Internal Revenue Service could take up to a year to grant it non-profit tax status and it has proven difficult to turn pledges into actual donations without assurances of tax deductibility.

An attorney we contacted about the matter said that such delays are commonplace. Such a long delay is of course unjustifiable technologically: a competent graduate student could create a program that would be sufficiently astute to grant immediate non-profit status for simple organizations like HAS. It is also unjustifiable on policy grounds: the government should encourage voluntarism, not squelch start up NGOs by denying them tax exempt status in their first, crucial year.

Whether the delay is a function of general government incompetence, a la the Veterans Affairs  disability claims backlog, or a sinister attempt to prevent a revival of voluntarism I cannot pretend to know. I do know, however, that the nation's budget situation would look much better if the government would allow voluntary efforts to crowd it out instead of the other way around.