-18 in Schaumburg claimed that because of the nature of their organization and its role as an advocate, it necessarily incurred greater So too, NBUF contends that expenses than a traditional charity. for a number of reasons--the expense of soliciting from minority populations and the additional expenses incurred during the initial phases of the establishment of a network of local charitable agencies providing direct services to local communities in non-traditional as well as traditional charitable areas--it also will spend greater amounts on administrative expenses than would a charity which only dispenses services directly to the needy. Given the plaintiff's Fifth Amendment interest and the First Amendment activity involved, the Chairman's application of the 25% "guideline" as an irrebuttable presumption violates the Due Process Clause of the Fifth Amendment. It is clear from the evidence presented that expenses in excess of 25% may indeed be reasonable Thus, the Chairman's application of a presumption which is not "necessarily or universally true in fact," Vlandis v. Kline, 412 U.S. 441, 452 (1973), infringes upon the First Amendment rights of the charitable organizations subjected to that presumption and violates the Due Process Clause of the Fifth Amendment. CONCLUSION Denial of the National Black United Fund's application to participate in the Combined Federal Campaign was improper and contrary to law. Although the applicable portions of the Manua have been amended since defendant's denial of plaintiff's appli tion, those amendments would not necessarily require a differen result than was reached by the Chairman here. Essentially the same criteria govern the National Scope determination (Section 5.24 of the Manual) and, while an organization with administrat expenses in excess of 25% may be admitted under the amended Fu Raising Expense requirement, that percentage is still the maxi considered to be "reasonable." 45 Fed. Reg. 24960. The Court this presumption invalid. -19 The eligibility requirements for participation in the Combined Campaign, as interpreted and applied, violated the First and Fifth Amendment rights of the National Black United Fund. The Fund is entitled to appropriate declaratory or injunctive relief. An appropriate judgment and order will be entered consistent with the findings and conclusions set forth in this Memorandum Opinion. ABOLISHING THE PRESIDENT'S COMMITTEE ON FUND-RAISING By virtue of the authority vested in me as President of the United States, it is ordered as follows: Section 1. The President's Committee on Fund-Raising Within the Federal Service, estab lished by Executive Order No. 10728 of September 6, 1957, is hereby abolished, and that order is hereby revoked. Section 2. (a) The Chairman of the Civil Service Commission shall make arrangements for such national voluntary health and welfare agencies and such other national voluntary agencies as may be appropriate to solicit funds from Federal employees and members of the armed forces at their places of employment or duty stations. (b) In making the arrangements required by subsection (a) of this section, the Chairman of the Civil Service Commission is authorized to consult with appropriate interested persons and organizations, the national voluntary agencies, and the executive departments and agencies concerned. Such arrangements shall (1) permit true voluntary giving and reserve to the individual the option of disclosing his gift or keeping it confidential: (2) designate specific periods during which solicitations may be conducted; and (3) provide for not more than three solicitations ahnually, except in cases. of emergency or disaster appeals for which specific provision may be made by the Chairman of the Civil Service Commission. Section 3. This order shall not apply to solicitations conducted by organizations composed of civilian employees or members of the armed forces among their own members for organizational support or for benefit or welfare funds for their members. Such solicitations shall be conducted under policies and procedures approved by the head of the department or agency concerned. Section 4. All records and property of the President's Committee on Fund-Raising Within the THE WHITE HOUSE March 18. 1961. JOHN F. KENNEDY Mr. DYMALLY. Miss Wright. Ms. WRIGHT. I was very interested in your comments regarding the incidental benefits to be derived by a community from Federal funds, the banking benefits and so forth. There are some Federal programs that have as their aim the development of businesses, minority banking, and so forth. I am wondering if you can comment on the success or failure of the programs that have been directed toward economic development as opposed to the more socially oriented programs. It seems to me there are programs which encourage the use of minority vendors, the use of minority banks and so forth. Mr. BAKEWELL. I think the programs that have maintained, for whatever reason, that as a focus and priority of its existence, are programs that you can find today as self-sustaining, and self-sufficient. I speak of programs, certainly of my own-the Brotherhood Crusade. I speak of programs such as WLCAC which is a program operating in the black community which has an independent ability to support itself. It has been through those means that these things have come about, because the focus has been on economic development, and the ethic has always been one that says when you put out dollars, you must always look for the return that you get on those dollars-which is quite the contrary to the way the Government has structured the dissemination and evaporation of the dollars allocated for social programs. I call to your attention, and I think this can be borne out, as a criteria for receiving funds through the antipoverty program, if you were allocated $100,000 one year and you came back and were costefficient, and only spent $90,000 and got the job done, next year you would be allocated $85,000 rather than $125,000. It is contrary to every business ethic throughout the country. Yet that has been done. So consequently you find people who have been managerially proficient at the last hour were spending money like it was going out of style in order to get it out of their budget. It is that kind of ethic that I think has been contrary to empowering our community—rather it has been a part of dissolving the community. Mr. DYMALLY. For the record, WLCAC is Watts Labor Community Action Committee. Ms. WRIGHT. What about programs such as have been run through the Small Business Administration, other business-oriented agencies, Commerce Department, that encourage the use of minority vendors by Government contractors? I believe there are some programs that encourage the use of minority banks by groups receiving Federal funding. Mr. BAKEWELL. I think there are programs. I think that is a very good point. One of the things that is dreadfully needed is that those programs are loosened up, if you will, and structured in such a way that they are not so bureaucratic in terms of allowing the small businessman to actually get a loan. I mean the process that one is put through, the ordeal that one is put through, in order to qualify to go through SBA, to deal with someone who is not adjusted to that system in the beginning, and to put him through that rigorous process has been demoralizing to at least 90 percent of the people who have applied. I think if you would research it, it would bear out that there has been since the twist was put in it, in terms of small businessmen, rather than minority businesses, that there has been more of a general population usage of those departments than a minority usage of those departments. Ms. WRIGHT. Thank you. Mr. DYMALLY. Thank you very much, Mr. Bakewell. Mr. Davis. Mr. DAVIS. Since the inception of the poverty program there has been an ongoing critique of the managerial efficiency of inner-city communities. You had the dictum or the doctrine of maximum feasible participation-which some believe caused a lot of managerial malfeasance or misfeasance. How would you assess, since the period of the civil disorders of the 1960's, the developing strength of the managerial capacity of inner city communities? Is that infrastructure more developed now; stronger, and possibly no longer vulnerable to these kinds of charges? Mr. BAKEWELL. It is absolutely unequivocally stronger. I am a product of the antipoverty program. Many people you saw who spoke to you today, and I saw the list, are products of the antipoverty program. Many of the people who sit in Congress today are products of the antipoverty program, whether they want to admit it or not. We had problems during that era of management. But it should not be looked upon as something that we initiated. I gave you a very cogent example of a managerial practice that was inflicted upon our community, that we had to respond to. It was nothing that we generated. So I would leave that question for you to answer based on the merits. Mr. DYMALLY. Thank you very much. STATEMENT OF LELAND WONG, LOS ANGELES COUNTY YOUTH GANG PROJECT Mr. WONG. Mr. Chairman and members of the committee, I am grateful for this opportunity afforded to the Asian/Pacific community of Los Angeles to testify before you. The Asian/Pacific community in Los Angeles consists of approximately 14 square miles of midtown Los Angeles, developed urban land for the most part as it skirts the Hollywood Hills to the north and Baldwin Hills to the southwest, rising and falling only at its easterly portion surrounding Echo Park. Fairly dense by southern California standards, this pocket houses approximately 350,000 residents. With the exception of a small pocket immediately adjacent to the Wilshire Boulevard employment centers, the residents of this widespread community are low- and moderate-income people living in aging housing and facing the full range of urban problems. An added burden is the large influx of new immigrants posing a challenge to public and private institutions alike. The immigrant population has literally changed the face of the community. Areas attempting to plan for senior citizens find themselves dealing with overcrowded elementary schools. The language, religion, and the ethnicity of the area has changed. What was a homogeneous Chinese community is now made up of many Asian populations. The |