Alberto Gonzales is saying, "at least I don't work at the Smithsonian..."

It just keeps getting worse for America's national museum. Revulsion over the pay and spending of Smithsonian chief Lawrence M. Small has inspired the full U.S. Senate to freeze the institution's public funding and cap executive salaries at no more than the President's (which would mean a pay cut of more than 50% for Small). The former auditor of the place claimed Small pressured her to back off looking into his spending, and today Small finally did the obvious.

Of course that whole thing follows the general disgust over the Smithsonian's deal last year with Showtime, an issue which remains unresolved.

Meanwhile, and apparently unrelated to the above, a blue-ribbon panel appointed in 2005 by the Smithsonian has concluded that the institution's eight art museums are "failing on many levels." The panel's leaked report says, according to The Art Newspaper, that “The Smithsonian’s art collections, taken together, might be expected to be a kind of national encyclopedia of the world’s art, like those in New York, Boston, Philadelphia, or Chicago; but in reality they are not. [And] to the extent that their designation as ‘national’ museums implies qualitative superiority and leadership, they have seldom lived up to their names.”

Ouch and double ouch...the panel thinks at least two Smithsonian-related art museums should be flat-out closed, and is barely more kind about a couple of others. With the director of the National Museum of Natural History keeping Small's chair warm, the Smithsonian is conducting a national search for his permanent replacement. They're going to need somebody a lot sharper than they've had lately, from all appearances.

Updates: Red Cross, Robertson v. Princeton, symphonies

Quick updates tonight on some subjects previously covered here:

The American Red Cross, it turns out, has to get formal permission from the U.S. Congress in order to reorganize themselves into a normal non-profit structure. That's because of the organization's special disaster-response status granted by Congress decades ago. It sounds like the legislators are receptive to the basic premise that the organization's outdated governance structure is the root of its recent troubles including losing three CEOs since 1999. The current board chair told a House committee that the proposed changes have helped lured some strong candidates for the job.

Princeton University has quietly (at least they wanted it to be quietly) reimbursed the Robertson Foundation almost $800,000 which the university can't bring itself to admit was used contrary to donor intent. (Rather, they say its because university officials failed to properly disclose the use of those funds.) This move has not taken any steam out of the huge lawsuit being pursued by the Robertson heirs; in the court of public opinion, Princeton just continues to shoot itself in the foot.

And the John S. and James L. Knight Foundation has summarized its hard-earned knowledge about the state of symphony orchestras into a short "issue brief" which should be required reading for everyone involved in classical music today. They do not pull any punches, and their core messages continue to remind me of some of the existing thinking and practices in other fields such as non-profit theater and dance. "Classical music lovers are everywhere, but most of them are not in the local concert halls....Interest in the art form looks healthy. Yet orchestras are struggling to remain relevant in a rapidly-evolving cultural landscape...."

The Congressional spotlight is being focused

The Washington DC Examiner reported the other day that a Congressional Philanthropy Caucus is being organized in the House, co-chaired by North Carolina Republican Robin Hayes. The Democratic co-chair was not identified, and the newspaper didn't name its source for the story. Some quick poking around just now didn't turn up any denials, and the Chronicle of Philanthropy appears to believe it.

Such a move seems inevitable given the various non-profit and philanthropy related issues that have in recent years been the subject of Congressional bills or hearings, and the general increase in public awareness due to things like the Gates and Buffett philanthropies and some non-profit scandals. And it does seem clear from kludgy messes like last year's federal Pension Reform Act that a lot of Congressmen and Senators are not yet up to speed on what this sector does and how, and a defined caucus ought to help with that learning curve.

Nonetheless I can't help thinking of the prediction Joel Fleshman is going around making (out loud and in his book) about foundations: that if they don't define and adopt a new more-transparent version of the charitable-foundation social contract, Congress will eventually define it for them. I think he's right about that -- our society slowly but continuously becomes less tolerant of secrecy from all its public or civic institutions, including publicly-held companies, and there's no reason to expect foundations to be exempted from that.

And I would apply Fleishman's logic to the not-for-profit tax-exempt sector as a whole: the statute of limitations on permission to be a young industry is not yet defined but it's also not open-ended. In some ways we perform our role in society better than other sectors do and some ways we don't, at all; and we won't be allowed to avoid that fact forever.

Donating while bankrupt: addendum

Back in November I wondered whether it's really fair that someone who has filed for bankruptcy should be allowed to continue making charitable contributions. This tightly-reasoned piece is persuasive: it isn't. Senators Obama and Hatch should drop the idea.

Giving high and giving low

Slate the other week ran a fun essay by successful business writer named Doug Smith, who proposes the creation of a legal futures market in charitable contributions.

His writeup will make many people's eyes glaze, alas, but it is an interesting concept. The idea is that someone wanting to make a donation to Favorite Charity would actually "buy" a clump of futures contracts from someone else who previously gave to that charity. Someone else wanting to make a donation would actually "buy" the clump of futures from the first person; in both transactions the charity gets the proceeds. The actual amounts involved would vary the way hog-belly futures contracts do: rising and falling as they are bid up or down in a (no doubt online) trading system.

The contracts would rise and fall in value due to the demand for making charitable gifts to that specific charity compared to others, which is the first potential social value of this: an efficient way for donors to express (and therefore be motivated to research) their conclusions about the relative merits of different non-profits. Some folks in the audience are now recoiling in horror but from me this gets a big cheer. The specific amount of each donor's tax deduction would also end up varying, which has some other interesting implications. (It's all contrived but of course so are lots of systems we take for granted, including the concept of nongovernmental not-for-profits that are exempt from taxes.)

Smith thinks that such a system governing charitable contributing would sharply increase the annual amount of philanthropy in the U.S., for a couple of reasons; could be, though I can also think of reasons why maybe not. There's no serious proposal in Congress for anything like this and the new political lineup in DC probably ensures there won't be, so for now it's just a think-tank exercise.