Public Support for Endowments

The National Humanities Alliance (NHA) reported in a February memorandum to its members that congressional offices have received volumes of mail and other communications in support of the National Endowment for the Humanities (NEH) and other cultural agencies. The NHA, along with eight other arts and humanities organizations, recently established an 800 number to allow arts and humanities advocates to send mailgrams to their congressional representatives and two senators in support of the NEH, the National Endowment for the Arts, and the Institute of Museum Services. The service is available for a flat fee of $9.50, charged to callers' telephone bills. The text of the mailgram was published on page 26 of the March issue of Perspectives. Those interested in sending mailgrams should dial 1-800-651-1575. The mailgrams will be hand-delivered the day after a call is made.

Clinton Proposes Budget Increase for NEH

The Clinton administration has proposed an increase of nearly $5 million in the NEH's budget for fiscal 1996. The last time that a president requested an increase in the NEH's budget was in fiscal 1992. The Republican leadership publicly complained that President Clinton was dodging responsibility for cutting the budget, but most congressional staff members—Republicans and Democrats—agreed that the Clinton proposal was appropriate since the administration's figure will serve as a ceiling from which to begin reductions.

The Clinton proposal targets $4 million for the first year of a three-year "Technology and the Humanities" special initiative to "facilitate the inclusion of important humanities materials on the information highway and to expand Americans' access to and use of these materials." The Clinton proposal also allocates funds for assessment studies, staff salary increases, rent for the Old Post Office Building that houses the NEH, and the upgrading of computer equipment.

Privatization

Many of those who believe that the NEH should not continue to receive federal support have suggested that the agency be "privatized." There are a number of quasifederal entities, like Fanny Mae and Sallie Mae, that do not depend on federal appropriations. Such agencies, however, usually generate income through loans or other services. If it were privatized the NEH would also have to rely upon an ongoing income-producing activity, or it would have to have a large endowment. The NHA reports that most of the privatization schemes that have been put forth in regard to the NEH involve diverting a portion of the NEH's annual appropriation to a trust fund over a period of three to seven years; the federal funds would have to be matched by private contributions. The NHA sees several problems with such schemes:

• To continue the NER's operations at current levels would require a $2.5 billion trust fund if a 7 percent return on investment were to be made available for grants and operations. The capital requirement seems to be beyond the possible in our present situation.
• It seems probable that Congress would retain considerable control over a trust fund crested with significant amounts of federal money. The National Security Education Fund is supported by a treasury-based trust fund that was created entirely with federal money. Each year, Congress reviews plans for the fund and must pass legislation to permit expenditures. With Congress playing such a role, the likelihood of significant private contributions from any source is questionable.
• Private foundations, which have never been particularly interested in supporting the humanities, are unlikely to donate large amounts of money to anew trust fund. Many foundations are prohibited from contributing to endowments, and many would resist contributing to one controlled by Congress.

For additional details about the future of the endowments, see the NCC Advocacy Update on page 24 of this issue of Perspectives.