Eight Things to Know About Big Philanthropy and the Populist Reaction Against It (full series)
Getting Bigger | More Liberal and Progressive
More Politicized | Renewed Public Scrutiny
4. It’s been getting more politicized, as well—partisan, even.
Donald Trump’s initial political ascendancy in 2016 cannot fairly be considered a product, or even an indirect beneficiary, of conservative philanthropy. Conservative donors of all types, in fact, were caught embarrassingly flat-footed by his rise. The populist sentiment expressed in Trump’s first candidacy and presidency was a challenge to both them and conservatism’s very understanding of itself. It likely will take decades to work out, and conservative donors will play a part in this, including in the political context.
Since 2016, liberal donors—including the largest private foundations in Big Philanthropy—have sought to produce and may actually have produced successful political results for Trump’s opponents. In her now famous postmortem on the 2020 election in Time, Molly Ball describes a “shadow campaign” conducted by liberal and progressive activists and organizers, who held urgent Zoom meetings for hours a day to avert “the potential for a November meltdown.” These meetings included “representatives of donors and foundations.” Ball later noted that the Voter Participation Center (VPC) sent 15 million vote-by-mail applications to “people in key states.” CRC’s Parker Thayer reports that, for the 2020 election VPC “leveraged connections with billionaire private foundations, Sam Bankman-Fried’s mother, and foreign billionaires with a history of breaking U.S. election law to raise $190 million for the Everybody Votes campaign and register 5.1 million people.”
VPC, which was founded as Women’s Voices Women’s Vote in 2003, is officially a tax-exempt, charitable entity. According to Sasha Issenberg’s 2012 The Victory Lab: The Secret Science of Winning Campaigns, however, this status is a thin veil for partisan political organizing: “Even though the group was officially nonpartisan, for tax purposes, there was no secret that the goal of all its efforts was to generate new votes for Democrats,” including by means of financial support from private, purportedly “charitable” foundations.
In 2020, the tax-exempt Center for Tech and Civic Life (CTCL) with substantial philanthropic support, including from private foundations, also funneled hundreds of millions of dollars to certain local election administrators. Both the motives and arguably predictable effects of those donations were plausibly called into question.
During the 2019–20 election cycle, according to CRC’s Kristen Eastlick, employees of those foundations in the “FoundationMark 15” made a total of about $832,000 in contributions that were reported to the Federal Election Commission (FEC). Of that, 96.9 percent supported Democrats, while just 1.7 percent supported Republicans. Specifically, they contributed $806,534 to Democratic candidates, related political action committees (PACs), or other entities during the cycle, according to FEC data, with only $14,121 going to GOP-related candidates or PACs. That might strike one as disproportionately one-sided, unreflective of the voting populace’s preferences as a whole.
On December 18, 2021, the influential Blue Tent’s David Callahan emailed liberal and progressive donors this advice:
As you think about last-minute charitable donations before December 31, here’s a tip: focus on helping Democrats win victories in next year’s high-stakes elections.
I know: Tax-deductible gifts to 501(c)(3)s supposedly can’t be used for electoral work. But that law is a joke. Any donor who does a little homework can find lots of ways to make “charitable” donations that help their political party.
Chronicle of Philanthropy columnist and the Giving Review contributor Craig Kennedy wrote in a January 2024 column that “[i]n the 2020 and 2022 election cycles, billions of dollars were spent on voter-registration, mobilization, and education efforts conducted by nonprofit organizations. According to Candid, foundations alone gave more than $2 billion for a range of election-related activities from 2019 to 2022.
“Such patterns are already playing out in the run up to the 2024 election,” he continued:
For example, as part of a $130 million initiative, the Southern Poverty Law Center and the Community Foundation of Greater Atlanta recently awarded 68 organizations grants of $50,000 to $500,000 for voter outreach and civic engagement work in Southern states. Other donors undoubtedly are giving even more. During the 2020 election, for instance, the Chan-Zuckerberg Initiative gave $400 million to local and state governments for election administration.
Some of this work is primarily focused on ensuring a healthy American democracy. However, a significant portion of funds is also likely supporting partisan political causes.
This latter kind of “philanthropy” properly prompted Congress to investigate the Ford Foundation’s funding practices in the late 1960s and subsequently to include explicit language to prevent the mixing of politics and tax-incentivized charity in the 1969 Tax Reform Act ( see No. 5 below). Despite the efforts of the mid-century Congress, such mixing is now rampant, growing, and bipartisan, although conservatism and liberalism do not draw equal proportions of policy- and advocacy-oriented charitable funding.
Full data from the 2022–2024 cycle needs to wait for nonprofit tax filings that are not all available yet, making historical comparison and trend-spotting difficult. It does seem likely that public charities engaged in more election-adjacent activity on behalf of the challenger b on the right than they did in 2016.
It also seems worth noting that the many urgent online and in-person meetings of liberal and progressive Big Philanthropy and nonprofitdom in 2025 to express alarm about and make plans to counteract what’s considered the administration’s dangerous “authoritarian attack on civil society” might perhaps have been less necessary if there had been at least some meetings—say in 2019 and 2020—about the dangerous risks that politicization, if not partisanization, of so much of the sector poses to charity.
5. It’s always had a tenuous place in America’s social contract.
As Schambra told the Council on Foundations in 2013, “our social-contract roots forever privilege the individual, on the one hand, and the state, on the other, which is why institutions in between, like foundations, seem to have a somewhat tenuous legal and constitutional status.” In fact, philanthropy was the subject of much political debate over its proper role and relationship with government during and for some decades since the Gilded Age.
The Walsh Commission, created by Congress in 1912 to examine U.S. labor law, spent much of its time and energy examining income inequality in the country, scrutinizing figures like John D. Rockefeller and Andrew Carnegie. Its chairman, progressive Kansas City labor lawyer and activist Frank P. Walsh, wrote in 1915 that “huge philanthropic trusts, known as foundations, appear to be a menace to the welfare of society.” In 1916, a Walsh Commission report recommended that multipurpose foundations with assets exceeding $1 million be chartered federally, with limitations on their size and duration.
Thirty-five years later, in 1952, Rep. Eugene E. Cox, a Georgia Democrat, introduced a resolution in the House of Representatives to investigate tax-exempt private philanthropy, including grantmaking foundations. In 1953—referring to the work of the Cox Committee as “unfinished business”—Tennessee Republican Rep. B. Carroll Reece introduced a resolution to essentially start over and conduct a new, more-thorough investigation. It passed, and the committee released its findings in 1954.
In 1955—when Democrats regained control of Congress—the House Select Committee on Small Business also investigated tax-exempt, charitable foundations. Chaired by crusading New Deal Democrat Rep. Wright Patman of Texas, it was and is known as the Patman Committee. “Down in Houston,” the populist Patman once said, “there are some neighborhoods so rich that every flea has his own dog. The Rockefellers are like that. Every one of them has his own foundation.” The Patman Committee issued a report in two lengthy installments in late 1962 and 1963. Warning of “possible exploitation of the people’s respect and admiration for charitable acts and gifts,” it aggressively recommended a moratorium on the granting of tax exemption for foundations.
The 1969 Tax Reform Act, which fundamentally still legally structures the nonprofit sector, followed continued congressional interest in and investigation of philanthropy, including by the House Ways and Means Committee. For example, the 1969 law—passed by an entirely Democratic Congress—makes it a “taxable expenditure” for any private foundation to pay or incur any amount “to influence the outcome of any specific public election, or to carry on, directly or indirectly, any voter registration drive”—though excepted from this definition, among other things, is “any amount paid or incurred by any organization … the activities of which are nonpartisan, are not confined to one specific election period, and are carried on in 5 or more States.”
When Republican President Nixon signed the law in December ’69, his formal signing statement said,
Tax-free foundations were brought under much closer Federal scrutiny although Congress wisely rejected provisions that would have hampered legitimate activities of the voluntary sector. At the same time, we must recognize that congressional consideration of this matter reflected a deep and wholly legitimate concern about the role of foundations in our national life.
According to the General Explanation of the Tax Reform Act of 1969, prepared by the staff of and published in 1970 by the Joint Committee on Internal Revenue Taxation,
In recent years, private foundations had become increasingly active in political and legislative activities. In several instances called to Congress’ attention, funds were spent in ways clearly designed to favor certain candidates. In some cases, this was done by financing registration campaigns in certain areas. In other cases contributions were made to organizations that then used the money to publicize the views, personalities, and activities of certain candidates.
This was just more than half a century before the 2020 election—in which VPC-registered voters (in “key states”) participated and which was administered in large part, in many (key?) places, with help from the philanthropically supported CTCL (see No. 4).
As Schambra also told the Council on Foundations more than a decade ago, “Whenever foundations in the past have forgotten their tenuous status in the American political order, the political sovereign was quick to remind them of it.”
In the next installment, the conservative and progressive populist reaction against Big Philanthropy is not going to go away.
