Disclosure laws for nonprofits would eliminate dark money in American elections, but at a cost of compromising our First Amendment right to free speech. That price is too high.
The Changing Nonprofit Landscape
Americans gave $410 billion to charity in 2017. That represented a 5.2 percent increase in charitable giving over the previous year. The sector is the third-largest workforce in the United States, behind only retail and manufacturing in the number of people it employs, according to the Johns Hopkins Center for Civil Society Studies. In twenty-four states and the District of Columbia, nonprofit jobs even outnumber manufacturing jobs.
Charitable donations are a huge part of who we are as a nation. But the nonprofit charity sector is also becoming a huge part of who Democrats are. The sector has become so politicized that conservatives in the industry tell me they have to hide their politics or risk being ostracized. I’ve heard anecdotal stories of how uncomfortable they feel at ostensibly apolitical conferences when speakers routinely use their time to bash the president or the Republican Party.
What I have learned since that first meeting in my office about nonprofits is terrifying. It raises important questions that can probably only be answered by IRS audits, which seldom seem to target left-leaning groups.
Increasingly, traditional 501(c)(3) charitable organizations are becoming fronts for partisan political campaigning. When they leverage the power of their charitable assets, nationwide infrastructure, and grassroots networks obtained through decades of legitimate charitable work to engage in partisan political activity, that is deceptive, wrong, and potentially illegal.
Over the last decade, some of America’s legacy nonprofits have figured out how to convert their vast fund-raising and grassroots apparatus into political weapons of war. They have pioneered new methods of fund-raising that may enable them to bypass campaign finance limits and disclosure and potentially access huge charitable reserves. They devised strategies to get out the vote, a nonpartisan activity, that would get out only the Democratic vote. Even as Democrats in Congress point to conservative Super PACS and run bills to “end corruption,” you’ll notice that little in their proposals will endanger their political support from the nonprofit sector.
Charity as a Means to a Political End
The focus on diverting charitable donations away from social welfare and using them instead to facilitate political power grabs reflects classic liberal thinking. Liberals believe government is the answer to every social ill. That perspective renders charities superfluous—entities to be used as nothing more than means to a political end.
Attitudes toward philanthropy reveal a deep chasm between left and right. A recent county-by-county study of charitable giving found a correlation between partisan affiliation and charitable giving. The New York Times reported the study’s conclusion that “the more Republican a county was, the more its residents report charitable contributions.” Conversely, Democratic-leaning counties tend to give less to charity, but support much higher taxes to fund a government safety net.
This contrast between voluntary and involuntary giving, between freedom and force, can also be seen among presidential hopefuls. Tax returns released by 2020 Democratic hopefuls reflect high incomes, relatively small charitable contributions, and an agenda of higher taxes.
Front-runner Bernie Sanders in 2016 made over $1 million, but gave just 1 percent (just over $10,000) to charity. With an eye to another presidential run, Sanders tripled his charitable giving in 2017 and 2018 to 3 percent and 3.4 percent respectively. Beto O’Rourke gave just three-tenths of a percent of his income to charity that same year, a figure that was fairly consistent throughout the ten years of returns released by O’Rourke. Kamala Harris gave just 1.4 percent to charity in 2017. Kirsten Gillibrand and Amy Klobuchar each donated less than 2 percent in 2018. The 2020 candidate with the largest charitable contributions was Cory Booker at 15 percent.
On the Republican side, President Trump’s decision to withhold his personal tax returns makes any assessment of his charitable giving claims incomplete. We do, however, know he gives away his full presidential salary each quarter to charitable endeavors run by federal agencies. Those range from Science, Technology, Engineering, and Math (STEM) camps for children to military cemeteries to the National Institute on Alcohol Abuse and Alcoholism.
Republican 2012 presidential nominee Mitt Romney is perhaps the poster child for philanthropic giving, reportedly donating 29.4 percent of his income to charity in 2011, the year before he became the Republican nominee for president. This was despite a clumsy attempt by Democrat Senate majority leader Harry Reid to tar Romney as a tax cheat from the Senate floor. That allegation was proven to be a lie, but as usual, the correction didn’t get anywhere near the traction of the original allegation.
That same year, President Obama gave a healthy 21.8 percent to charity, but Vice President Joe Biden reported donating just 1.5 percent of his income. Biden’s numbers were even more anemic pre-2008, when the Obama campaign released past tax returns of its vice presidential nominee showing total charitable donations of just $3,690 over ten years.
These numbers reflect profound philosophical differences in the perceived role of charitable institutions in American life. Republicans treat charities as an indispensable part of the social safety net to which Americans have an individual responsibility to voluntarily contribute. At best, Democrats see them as an extension of government, to be dependent on government and politicians for ongoing funding. At worst, they treat charities as pass-through entities from which political donations can be laundered.
Progressive ideology already dominates the 501(c)(4) nonprofit sector. Right-leaning charities exist, but in quantity and size they are dwarfed by left-leaning ones. If Democrats can co-opt the charity nonprofit sector for political purposes, they can gain access to immense reserves. Instead of having to build a whole new political apparatus, they would be able to leverage the existing staff, buildings, donor lists, and credibility of powerful nonprofit organizations to act as virtual subsidiaries of the Democratic National Committee.
With anger over the 2016 election result driving donations, one might expect to see those contributions isolated to 501(c)(4) groups that have more flexibility to engage in elections. But that hasn’t been the case. The supposedly apolitical charity arms of progressive nonprofits also benefited from the spike in donations. Why would charitable nonprofits, legally prohibited from engaging in politics, benefit from the Trump Bump? I did a deep dive into their IRS tax filings to look for the answer. What I found is far more disturbing than anything the IRS hoped to find in its audits of conservative nonprofits.
Chapter 2
The Weaponization of Public Charities
We expect nonprofit 501(c)(4) advocacy groups to engage in politics. But we see charities as nonpolitical. The 501(c)(3) charities legally have very little latitude to engage in partisan politics. But because the assets and income they control are so much more substantial than those of advocacy groups, the temptation to repurpose them for political use is real. Weaponizing 501(c)(3) charities for political purposes is not easy. But where there is a will, there is a way.
It’s important to understand the enormity of the resources some of these charities control. Let’s start by looking at the Planned Parenthood Federation, a 501(c)(3) charitable organization.