What tax-advantaged charitable foundations’ involvement in partisan politics looks like

Nov 10, 2023
(Wikimedia Commons)

And what it is.

Earlier this week, The Messenger ran a philanthropy-related story that began this way:

In April of last year, Tom Perriello, the then-executive director of Open Society Foundations (OSF) US programs, sat for lunch across Democratic operative Andres Ramirez with a pitch.

As a donor and a funder, he said he would like to see if national Latino groups could come together, and wondered if they would be willing to submit a joint proposal to work on Latino voter mobilization ahead of 2024, according to two sources familiar with the meeting. Would top Latino groups be willing to submit a joint proposal, he asked, stressing that he would be willing to take the proposal himself?

Perriello communicated that from his perch at OSF, the joining of forces would be seen as “historic.”

Just over a year later, three top national Latino groups did just that, submitting a $67 million proposal for TV, digital, radio, and mail spending on May 5, 2023, according to the leaked memo obtained by The Messenger, with work to begin in July 2023.

The Messenger has learned, however, that the “historic” opportunity ran into a wall of reality; the proposal will not move forward.

The article went on to tell a tale all too familiar to nonprofit groups seeking foundation support: a major philanthropy meets with its grantees, subtly suggesting that a certain kind of grant request is likely to be met with approval; the nonprofits work hard to sketch a project chock-full of deliverables and theories of change and logic models; there’s a personnel change at the foundation; and all that work is for naught. It was an excellent and well-researched piece, with the sort of inside dope that philanthropy reporting typically lacks.

But as I read it, this thought suddenly came to me: woah, hold up. Let’s rewind to that opening, and read it again, this time trying to imagine how it might appear to the average, not-too-familiar-with-philanthropy reader. It would probably go like this: “A major American foundation summons a political party official and promises substantial grants to nonprofits to turn out voters for Democratic candidates.”

Yes, yes—lots missing from this account. And maybe lots missing from the meeting—like, the nonprofits whose agendas were being hammered out between OSF and the Democratic Party.

And yes, I’m fully acquainted with all the complexities and nuances of what counts for legitimate non-partisan political activity by groups with a bewildering array of IRS designations. I’m sure that nonprofit legal experts could examine the so-far-undisclosed details of the meeting and prove conclusively that no laws were broken.

But that’s not the point here. To the average reader viewing this from some distance, another story emerges. It sure looks like foundations can sit down with political party leaders and arrange for millions of tax-advantaged dollars to flow through nonprofits into elections. And as much as we might be able to parse away any outright illegality, we know that’s precisely what happens all the time. As subtly expressed by David Callahan, one of the most astute observers of the philanthropy/politics borderlands: the notion that foundations today aren’t involved in partisan activity is “bullshit.”

It’s bullshit, of course, because ever since the 1969 Tax Reform Act banned partisan involvement by foundations, philanthropy has steadily, surreptitiously tip-toed farther and farther into the electoral realm. And after each move, nothing happens. There’s no IRS investigation; no one is summoned before a Congressional committee; the public seems asleep.  

The editors of The Giving Review are among the few who have consistently sounded the alarm about the politicization of philanthropy, although so far without effect. But one never knows when some random, unanticipated event might send politicized foundations scurrying like cockroaches after the light comes on in the kitchen. (I grew up on the Gulf Coast. I’ve witnessed this. It’s truly unpleasant). 

That’s the lesson foundations should learn from the reaction of prominent donors to the deeply repugnant antisemitism suddenly revealed to be part of campus progressive activism a month ago. Conservative analysts have warned for years about this state of affairs. The Giving Review observedthat even in the 2019 protests leading to Warren Kanders’ exit from the board of the Whitney Museum of American Art, the now-familiar cry “From the river to the sea, Palestine will be free” rang out in its hallways. Yet no one paid any attention to these warnings—until the horrific assault on Israel by Hamas on October 7, followed by an entirely predictable response from the campus left.

Will wealthy donors, Congress, and the public continue to watch benignly as foundations casually direct millions of tax-advantaged dollars into partisan political campaigns? That’s what politicized foundations are counting on. But no one can predict when a particularly egregious violation will strike a nerve, with summonses suddenly flying from Congressional committees to startled foundation president and board members, many of whom will never have considered their manifestly partisan engagements to be problematic.