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Review: “11 Trends in Philanthropy for 2023”
The Dorothy A. Johnson Center for Philanthropy at Grand Valley State University released a report in January titled “11 Trends in Philanthropy for 2023.” It’s a thoughtful and generally balanced piece that explores many of the changes in philanthropy we have seen over the past few years, including those spurred by the pandemic and racial unrest. Some of these trends have been noted elsewhere, but others will likely be less familiar to institutional and individual donors. And the report’s authors are clear that the identified trends are far from universal, noting, “Each nonprofit, foundation, donor, community or network is affected differently by our national and global zeitgeist.”
1. The Rise of Collaborative Funding – This is certainly not a new development. Philanthropy Roundtable’s guidebook, “Protecting Your Legacy,” discusses philanthropic partnerships such as the Charter School Growth Fund, Blue Meridien and the Robin Hood Foundation. And many place-based funders – particularly those who serve communities with limited philanthropic assets – have engaged in collaborative funding on a regular basis. The pandemic, however, did increase the use of collaborative funding, much of it initiated by community foundations. In addition, philanthropic partnerships are increasingly attracting some of our largest foundations. The report mentions The Audacious Project, for example. In another instance, Open Philanthropy, an LLC founded by Dustin Moskovitz and Cari Tuna, recently re-granted $150 million to other grantmakers, including $70 million to the Gates Foundation, to amplify global development programs already in operation. Given existing concerns about the outsized influence of so-called “Big Philanthropy,” it’s reasonable to ask if collaborative funding on an even larger scale bodes well or ill for public perceptions of philanthropy.
2. Rethinking What Capacity Building Should Be — and Who Should Decide – Capacity building has many dimensions, and this discussion is disappointing in its almost immediate focus on race: “… traditional, foundation-funded capacity building is increasingly criticized for its origins in white dominant culture and its continued practice of serving white-led nonprofits.” Should funders unilaterally impose their perceptions of “what nonprofits need” on their grantees? Of course not. But funders who work closely with grantees over time can recognize weaknesses in an organization’s board of directors, financial systems, fundraising practices and other key elements critical to success. The suggestion that “funders and grantees intentionally co-create solutions in capacity building” is a good one, as is recommending that funders consider general operating support and multi-year funding for organizations with significant capacity needs. These are both excellent practices to improve any nonprofit’s effectiveness.
3. Disaster Philanthropy Is Transitioning for the Long Haul – Again, this is not a new conversation. Disaster philanthropy in the wake of both Hurricane Katrina and the 9/11 attacks tended to be present-oriented despite reminders that resources would also be needed for long-term recovery and rebuilding. But with each major disaster, the Johnson Center report notes, “Key actors — like the Center for Disaster Philanthropy (CDP) and many community foundations — are helping to drive the understanding that emergency response alone is unequal to the threat posed by recurring disasters.” Supporting education about preparedness is one approach. Building resilience and local leadership in communities likely to face greater hardships from disasters is another. But while such efforts are increasing, preparedness and resilience-building funding still lags far behind “the initial humanitarian response,” a conclusion supported by a recent article in The Chronicle of Philanthropy.
4. For-Profit News Outlets are Exploring Nonprofit Models – This trend began as a response to the decline in local news reporting, resulting in the start-up of over 200 nonprofit news outlets since 2012. The trend is accelerating with the conversion of a few for-profit outlets (including The Chronicle of Philanthropy) into independent nonprofits. Some outlets are retaining their for-profit status but are owned by nonprofit entities. Examples include National Review and The Philadelphia Enquirer. In another model, for-profit outlets are seeking philanthropic support for special projects. The Ford Foundation, Stavros Niarchos Foundation and the William and Flora Hewlett Foundation have collectively committed $4 million to support the Headway Initiative at The New York Times, while the Associated Press has been awarded $8 million for its climate coverage. The Johnson Center report expresses some concerns about these evolving relationships but focuses primarily on funding restrictions that may keep news outlets from receiving adequate support to sustain operations. Although the report states that “A free and independent press is widely acknowledged to be a critical pillar of a functioning democracy,” it does not ask hard questions about the potential influence of private funding on news outlets’ decisions on what news will be delivered and how it will be presented to their readers.
5. New Organizational Structure Models are Toppling the Staff Pyramid – Regarding this trend the report notes, “Today, nonprofits are increasingly embracing non-traditional structures such as co-leadership, co- or multi-executive directorship, worker self-direction and fiscal sponsorship as opportunities to create more sustainable and mission-driven programs.” It is true that lone executive directors of many small – and even medium-size – nonprofits are frequently burdened with multiple responsibilities that can lead to burnout. And it is not surprising that as younger generations enter the nonprofit sector, they adopt teamwork as a workplace practice. Much of their education and likely all their professional experiences have prepared them for shared leadership. It is too soon to assess the success of this evolution and its impact on nonprofit accountability, but those questions will need to be asked.
6. Policymakers Are Paying Increasing Attention to Moving More Money Faster – The report is correct in stating, “Across the last 10-15 years, we’ve seen increased attention to foundation payout rates, the declining number of individual donors and the growth of donor-advised funds (DAFs).” Yet the Accelerating Charitable Efforts (ACE) Act did not make it out of the 117th Congress and failed to gain significant bipartisan support. The philanthropic sector should anticipate continued efforts to limit philanthropic freedom with misguided mandates on both the state and federal levels, but even this report concludes that “The proper policy response to those calls and the mechanics of those changes — and their unintended follow-on consequences — remain very unclear.”
7. ESG Backlash Will Affect the Future of Philanthropy and Impact Investing – The report acknowledges that impact investing focused on ESG (environmental, social and governance) has come under attack from both the Left and the Right but focuses primarily on the latter. It concludes, “This rapidly intensifying backlash against ESG considerations will affect philanthropy more and more as impact investing by philanthropic institutions continues to grow — as most expect it will — and as younger donor-investors continue to use both their giving and their investing as integrated tools for social change.” As evidence, the report points to Philanthropy Roundtable’s keynote conversation on this topic at the 2022 Annual Meeting, “ESG: An Insidious Threat to Free Society and Philanthropy.”
8. Will Philanthropy Stay Focused on Racial Equity? – Although total grantmaking for racial equity has increased significantly since 2020, the report asks two questions. The first is whether those numbers are skewed by a few major donors. The second is “How much of this [giving] represents real change and responsiveness to entrenched and emerging needs, versus wanting to be seen as responsive and connected to community — to be part of a trend?” We do continue to see news stories about increased grantmaking in this area, including a $1 million spend-out gift from the Lillian Holofcener Charitable Foundation to support a free newspaper in Baltimore staffed by Black writers and focused on the city’s Black residents, and a call from several of the nation’s largest foundations for gifts to the Black Feminist Fund, whose goal is to raise $100 million to support nonprofits led by Black women. Nonetheless, the report concludes that currently there is no clear answer.
9. More Nonprofit Employees Are Moving to Unionize – Citing an August 2022 Gallup poll that claims, “Seventy-one percent of Americans now approve of labor unions,” the report discusses the growing interest in unionization in nonprofit organizations. The Chronicle of Philanthropy also reported on this trend recently in an article that focused on the successful unionization effort at the Southern Poverty Law Center. The reasons behind the rise in nonprofit unions are both internal and external. Increased caseloads during and after the pandemic caused frontline workers to experience more stress and burnout and have resulted in demands for higher wages and enhanced benefits. In some cases, staff at charitable organizations see unionization as a way to achieve social goals like diversity, equity and inclusion policies and racial equity. But unions have also become more aggressive in courting these workers, and the Nonprofit Professional Employees Union grew its membership from 250 members in 2018 to 1,500 members representing nearly 50 organizations in 2022. It is not yet clear, however, if adequate funding – whether from private philanthropy or government grants – will follow to support the increased costs of nonprofit unionization.
10. IRS Delays and Other Barriers to Data Mean Real Risks for Nonprofits – Mandatory electronic filing of all 990 tax forms after July 19 has made every field on those forms accessible electronically. The pandemic, however, has caused considerable delays in the IRS release of this data. The Johnson Center report notes, “In September 2022, Candid reported that for 990s filed for tax year 2019 and later, the processing delay for most organizations is now well over 36 months.” Other data concerns include the lack of information about communities and populations served by specific nonprofits and the dependence on private giving at most organizations that track philanthropic data. The report does not ask how much transparency should reasonably be mandated of 501(c)(3) organizations, nor does it question whether nonprofit data-gathering should be handled by an agency of the federal government.
11. The Public Is Holding Nonprofits Accountable to Living Their Mission and Values – This last trend is directly related to No. 10, as the heightened transparency of nonprofit operations via electronic access to their tax filings has made it easier to identify fraudulent transactions. Beyond financial misdeeds, however, there are increased demands for nonprofits to live up to their missions and stated values. The Johnson Center report concludes, “As more nonprofits and foundations open up their operations to all their stakeholders — embracing greater inclusion, strategies like participatory grantmaking, or changing how they monitor and evaluate their programs — more people will come to expect and wield opportunities for accountability.” What the report fails to discuss, however, are instances where this trend has produced questionable results, particularly in cultural organizations. The resignation of Warren Kanders from the board of the Whitney Museum of American Art is only one of a number of examples of “accountability” running amok.
February 22, 2023
Nonprofits Transforming Civics Education Worth Celebrating on Presidents Day
Presidents Day was originally a commemoration of George Washington’s birthday. He considered civic virtue to be essential, saying in his famous Farewell Address, “Virtue or morality is a necessary spring of popular government,” and to Marquis Lafayette that the government “can never be in danger of degenerating into a monarchy, an oligarchy, an aristocracy, or any other despotic or oppressive form; so long as there shall remain any virtue in the body of the people.”

This Presidents Day, Philanthropy Roundtable is celebrating by highlighting donors and organizations that are championing civics education that inform citizens, protect democracy and create a safe, enduring society.

Equipping Teachers: While schools traditionally incorporate civics education as part of their curriculum, many teachers lack opportunities to gain expertise in civics content or ideas for how to best engage their students with it. Here are two initiatives that are working to fill this gap.
- American Civics and History Initiative (ACHI), is an ambitious initiative by three major civic education organizations: the Bill of Rights Institute (BRI), the Jack Miller Center (JMC), and the Ashbrook Center. ACHI’s purpose is to reach 680,000 students by training 6,800 teachers in Florida over the next two years. ACHI’s trainings are designed to “empower educators through rich, content-based programs and resources” they can use in the classroom. ACHI would not be possible without the involvement of the Jack Miller Family Foundation, which is funded by Florida-based philanthropist Jack Miller. Miller brought together BRI, JMC and Ashbrook, and now is facilitating ACHI not just by writing checks, but by acting as a partner in the initiative, along with the Marcus Foundation, funded by philanthropist Bernie Marcus.
  
  Learn more in the Roundtable’s interview with ACHI’s funders and grantees.
- Georgia Center for Civics Engagement (GCCE), “has been working to help fill gaps in civics education among the state’s young people through programs that promote self-esteem, leadership skills and a sense of responsibility for oneself and the greater community.” First, GCCE uses a train-the-trainer approach in providing quality professional development and curricular resources that are aligned with the state educational standards to enhance quality instruction. Secondly, they provide students with opportunities to participate in simulated governmental proceedings like mock elections, model United Nations and legislative meetings. The success and popularity of GCCE’s programs has inspired other states, including Kansas and Arkansas, to replicate GCCE’s model.
  
  Learn more about GCCE by reading the Roundtable’s interview with GCCE’s CEO, Dr. Randell Trammell.
Student Opportunities: While acquiring civic knowledge is essential, students also need engaging ways to apply their knowledge to the real world. These donors and organizations are partnering to provide students with these experiences:
- The National Civics Bee is an annual competition that encourages young Americans to engage in civics and contribute to their communities. Supported by the Daniels Fund and the U.S. Chamber of Commerce, the National Civics Bee challenges middle school students to apply their civics knowledge for a chance to win recognition and prizes provided by the local community. The goal is to awaken the possibility that civics engagement can make this country a better place. Instead of being organized by schools, civics bees live at local chambers of commerce who encourage the entire community to get involved in this important effort.
  
  Learn more from Daniel’s Fund President and CEO Hanna Skandera on how civics bees can help today’s students get excited about our nation’s history.
- JA BizTown, a Junior Achievement USA program (JA USA), blends teacher-led sessions with experiential learning. The fourth through sixth grade students prepare for their JA BizTown experience by participating in a series of classroom lessons where they learn about financial literacy, community and economy, work readiness and business management, all through a civics lens. Each student selects a career, creates a business plan, develops a marketing campaign and elects a mayor. The students then take their newly acquired skills to JA BizTown. At the “town,” which consists of a variety of businesses, a municipal building, a radio station and banks, the students get hands-on experience as employees and consumers by paying rent, buying insurance, depositing paychecks and more. Due to the encouragement of longtime supporter The Marcus Foundation, JA USA added content to their program to increase the civics knowledge and experience for those who participate in JA BizTown programming.
  
  You can learn more about JA BizTown and their partnership with The Marcus Foundation here.
Building a Healthy Civic Culture: Civic knowledge and skills obtained in the classroom are important, but all citizens also need to be equipped with a mindset to constructively engage with those with whom they disagree. Here are organizations and initiatives focused on this uniting effort.
- Braver Angels seeks to unite America by bridging the divide among liberals, conservatives and others by helping these groups understand each other as fellow citizens, beyond the stereotypes. To reduce the “vitriol that poisons our civic culture,” Braver Angels hosts workshops, debates, campus engagement and other positive activities at the grassroots level to form community alliances. The Sumners Foundation is a key supporter of the Braver Angels work in Texas.
  
  Read more about Braver Angels and their depolarization efforts here.
- Constitution Drafting Project, created by the National Constitution Center with support from philanthropist Jeff Yass, brought together three teams of leading constitutional scholars in 2020: team libertarian, team progressive and team conservative, to draft and present their ideal constitutions, according to their website. The National Constitution Center later reconvened the teams for a virtual constitutional convention to draft and propose a series of amendments to the U.S. Constitution. The result was five new amendments adopted by representatives from all three teams. The project demonstrates how those of opposing viewpoints can civilly disagree as well as work together to find points of consensus.
  
  You can watch the Roundtable’s interview with Jeff Yass, NCC president Jefferey Rosen and the leaders of the respective drafting teams.
Philanthropy Roundtable believes a robust civics education is essential to promoting and preserving good citizenship, which is crucial for the health and future of our nation. In 1776, future President John Adams warned of the importance of enduring virtue in a letter to his cousin, Zabdiel Adams:

“The only foundation of a free Constitution is pure virtue, and if this cannot be inspired into our people, in a greater measure than they have it now, they may change their rulers, and the forms of government, but they will not obtain a lasting liberty. They will only exchange tyrants and tyrannies.”
February 17, 2023
Philanthropic Responses to the Closing of the American Mind

How Charitable Giving Is Helping Expand Freedom of Expression on College Campuses

Philanthropy Roundtable’s Values-Based Giving Program connects our donor community to high-impact organizations that advance our shared values of liberty, opportunity and personal responsibility. This story is part of our campaign highlighting how donors and nonprofits work together to improve lives. Interested in learning more about Values-Based Giving and the services our team provides? Click here.

The fundamental purpose of higher education is to provide Americans of all backgrounds the opportunity for advanced learning, foster the pursuit of knowledge and provide training in specific fields of study or practice. But in recent years, ideologically charged threats to freedom of thought and academic inquiry have expanded on college and university campuses across the country under the guise of “diversity” initiatives or policies. Many campuses have become hot beds for a “cancel culture” driven by political ideology that has intimidated students and professors, leaving them afraid to express their views, popular or otherwise.

This truly is the closing of the American mind, then throwing away the key, a mortal threat to the very soul of scholarly inquiry as well as educational and professional advancement, which are building blocks of individual and economic flourishing.

Fortunately, private philanthropy is well-positioned to help the leaders and organizations who have stepped up to assess and remedy this grave crisis. Nonprofits are mobilizing students, faculty and alumni by providing resources on multiple fronts—from litigation to advocacy to media efforts—to raise awareness about this attack on free speech and association and promote the value of intellectual diversity at educational institutions.

By challenging what has become a dangerous status quo, organizations like the Foundation for Individual Rights and Expression (FIRE), the Academic Freedom Alliance, and Alumni Free Speech Alliance are working hard to maintain an open exchange of ideas and critical thinking in our colleges and universities. While others, like the Institute for Humane Studies, are creating alternative models that help demonstrate innovative approaches to higher education. The work of these organizations varies, but each is dedicated to combating an epidemic that is chilling speech and hindering students and faculty from engaging with diverse ideas through respectful debate and discussion.

A Crisis of Free Speech and Expression on College Campuses

To underscore the seriousness of this problem, one can cite numerous examples from university and college campuses around the country.

FIRE is dedicated to defending and sustaining all Americans’ individual rights to free speech and free thought, with a special emphasis on our nation’s campuses. According to FIRE senior fellow Robert Shibley, college administrators have become “so amenable to unlawful or unconscionable demands that they set themselves up for the many calls to punish or silence students we’ve seen.”

Last year, FIRE partnered with College Pulse to conduct the largest survey ever of college students’ experiences with free speech. Nearly 45,000 students participated from more than 200 colleges, and only one-in-four students (22%) reported they felt “very comfortable” discussing “a controversial political topic” with other students on campus. The survey also found that about three-in-five students (59%) said they would be uncomfortable disagreeing with a professor publicly on a controversial topic, while one-in-five (22%) said they often engage in self-censorship.

Another recent survey conducted from 2019-2021 by the nonpartisan nonprofit Heterodox Academy, which is dedicated to improving “the quality of research and education in universities by increasing open inquiry, viewpoint diversity and constructive disagreement,” found that nearly nine out of 10 students believe “colleges should encourage students and professors to be open to learning from people whose beliefs differ from their own,” while almost the same high percentage of students believe that “colleges should welcome students and professors with a lot of different points of view.”

In comparing these two reports, it appears college students agree that open inquiry and free expression are valuable. However, many remain somewhat fearful of expressing their own views to their peers and faculty.

Fortunately, organizations like FIRE and Heterodox Academy have resources available for them. FIRE’s Student Network offers a community of peers who care about civil liberties as well as opportunities to learn about students’ rights on campus. This year, Heterodox Academy is launching a new Campus Community Network with 23 chapters across the U.S. and Canada, including MIT, UC Berkeley and McGill University. Each community is action-oriented, led by Heterodox Academy member co-chairs from among faculty, staff or graduate students, and charged with hosting monthly gatherings, organizing events and collaborating with fellow campus leaders.

It’s important to realize that students are not the only ones suffering on campus. FIRE publishes a database that tracks when a professor, researcher, lecturer or other individual with an academic position at a college or university is investigated, penalized or otherwise professionally sanctioned for “engaging in constitutionally protected forms of speech.” They have documented nearly 900 examples—more than 120 in 2022 alone—of people being targeted by either the political left or right since 2000.

Philanthropic leaders and charitable organizations are stepping up to support organizations pushing back against efforts to suppress free speech and expression on college campuses, as well as developing new ways of fostering open and intellectually diverse learning environments in higher education. They include the Barry Foundation, the Stanton Foundation and the Institute for Humane Studies.

Donors and nonprofits are bringing together resources in different yet complementary and effective ways to motivate alumni to engage with their alma maters and their student populations, provide high-tech alternatives to traditional academic forums for formulating scholarship and support litigation that defends professors and students whose rights have been violated and who are facing reputational and career repercussions.

Academic Freedom Alliance: Promoting “Freedom of Thought, of Inquiry, of Discussion”

In early 2021, academics from across the ideological spectrum came together and formed the Academic Freedom Alliance (AFA) to protect college and university faculty members’ right to speak, teach and publish the results of their research without fear of sanction or punishment. According to the nonprofit’s website, AFA’s purpose is to help scholars “fulfill their vocation as truth-seekers.” Its diverse membership includes socialist philosophy professor Cornel West, conservative Princeton law professor Robert P. George, former president of the American Civil Liberties Union Nadine Strossen and prominent liberal free speech attorney Floyd Abrams.

It is one thing to state an ambitious purpose, but AFA members have formulated effective strategies. AFA Director of Operations Howard Muncy points out, its members embrace “the NATO-like principle of an attack on one being treated as an attack on all” – transcending any philosophical differences or disagreements between an academic who is subjected to attack and the colleagues coming to his or her aid. To the AFA, an assault on academic freedom anywhere is an assault on academic freedom everywhere.

When professors or scholars find themselves under siege for exercising their First Amendment rights, the AFA will raise funds to support any necessary litigation on their behalf. And it carries out this defense without endorsing any content. In just two years, the AFA has supported 13 cases. During that same time period, it expanded its membership from 217 founding members to more than 700 practicing academics today, a credit to their strategy of refusing to choose ideological sides.

This is also why the John and Daria Barry Foundation chose to help protect academic freedom by becoming AFA’s first donor.

“To carry out their mission, scholars must be free to pursue the truth,” Daria Barry emphasized. “Our foundation helped to create the Academic Freedom Alliance (AFA) to ensure that professors who are unfairly censored can find a common source of strength by banding together with their peers from across the political spectrum.”

And it’s not only the scholars who benefit, notes Barry. “In today’s climate, the AFA serves to recall universities—and their broader communities—to their first duty to their students: to pursue the truth,” she said.

Alumni Organize to Support Free Speech at Institutions of Higher Education

It takes courage for a faculty member to risk the comfort of his or her position in opposing politically charged attacks on academic freedom – courage which not every professor or scholar who cherishes free inquiry will be willing to exhibit. But alumni are significantly less vulnerable.

With this in mind, graduates of Cornell University, Davidson College, Princeton University, the University of Virginia and Washington and Lee University formed the Alumni Free Speech Alliance (AFSA) in 2021, allying with the Cornell Free Speech Alliance, Davidsonians for Freedom of Thought and Discourse, Princetonians for Free Speech, UVA’s Jefferson Council and Washington and Lee’s Generals Redoubt.

According to AFSA Chairman Emeritus Edward Yingling, the group is working to establish individual speech alumni groups at colleges and universities, then helping them grow and thrive. Like the AFA, AFSA does not discriminate based on ideology in defending the rights of faculty and students.

“In the current environment of intolerance of thought, our colleges and universities are becoming monocultures. They’re losing their reason for being,” said Yingling. “So our job is multi-faceted. We shine a spotlight on any objectionable actions against faculty or students. … But that’s just one element of what we do.”

AFSA is building a list of alumni across the country who support its mission, extending support to faculty and students so they do not feel isolated and taking part in events with third party groups, including partnerships between the American Council of Trustees and Alumni (ACTA), Braver Angels and BridgeUSA to encourage depolarization and respectful engagement among students on divisive issues. At present, AFSA boasts 15 member alumni groups actively engaged with their alma maters with an ambitious goal of increasing that number to 40 by the end of the year.

The Stanton Foundation, which primarily educates at-risk children and promotes adoption, provided AFSA with its initial grant. Stanton Foundation Program Director Laurie Slap applauded AFSA’s “thoughtful, coherent approach” to growing its membership and influence as an “umbrella group that is bringing together different organizations,” citing support for AFSA from MIT’s Free Speech Alliance. That organization was founded in 2021 when University of Chicago geophysicist Dorian Abbot was disinvited from delivering MIT’s prestigious John Carlson Lecture. The invitation was rescinded following a student outcry over a Newsweek article Abbot co-wrote arguing that Diversity, Equity and Inclusion (DEI) initiatives on campus, among other things, violate the “ethical and legal principle of equal treatment.”

Digital Platform Provides “Intellectual Community Building”

Another nonprofit pursuing freedom of thought – albeit in a different manner – is the Institute for Humane Studies, which supports scholars applying classical liberal principles to today’s most pressing challenges. Ryan Stowers, executive director of the Charles Koch Foundation, which has long been one of IHS’s financial supporters, is excited about its plans to make full use of technology in the fight to promote robust scholarly discourse.

“In the last five years the attacks on scholarly freedom have escalated to a level you wouldn’t have expected,” Stowers said. “That’s a reflection of increased intolerance in the exchange of ideas elsewhere in society. But universities are meant to be above this, to be a safe place where the entire array of ideas can be discussed. Instead they’re now under constant threat.”

“Philanthropy has to think through the strategy of how to fight that threat,” said Stowers, “and IHS has one of the most innovative approaches.”

For more than 60 years, IHS has been connecting scholars across the “humane disciplines” of economics, history, law, philosophy and political science through interdisciplinary programs around the ideas and institutions that underlie free, open and prosperous societies. Economist Emily Chamlee-Wright, the organization’s president and CEO, described the new IHS initiative as a digital gathering place that, once fully developed, will break down intellectual silos and help scholars do their best work.

According to Chamlee-Wright, like IHS’s traditional programs, which will continue, the digital gathering place will attract scholars seeking bottom-up solutions to the world’s most pressing challenges in a context of intellectual humility and openness.

Education has long been central to America’s success in numerous fields from medicine and the advanced sciences to the globally competitive field of computer technology plus law and economics. Defending and promoting the freedom to learn, teach or research without ideologically motivated interference, bullying or other threats is critical to any effort focused on restoring or reforming older higher education institutions or providing new pathways to opportunity.

Through philanthropy and its partnership with these dedicated nonprofits, we are witnessing support for independent, critical thinking on campuses and beyond, including innovative technology that empowers scholars and faculty researchers to share ideas openly, and ultimately, to strengthen our free society.

For those concerned about what’s being taught to our next generation of leaders headed into the business world, government agencies, medical community, and yes, the classroom as educators, we must remember that stifling debate, diverse viewpoints and the ability of students, faculty and staff to engage with them does not create a skilled practitioner, a bold innovator or even a savvy voter. Instead, it results in students being woefully unprepared for the “real world” and without the skills needed to succeed when they bid their campuses farewell.

Thomas McArdle was a White House speechwriter for President George W. Bush and is a longtime political journalist. He was speechwriter for Export-Import Bank of the United States Chairman Kimberly Reed during the Trump Administration and was senior writer for Investor’s Business Daily. He writes a column for the Epoch Times and contributes to IssuesInsights.com.

February 16, 2023
The Giving Review: Forgo Mandates and Work to Change Philanthropy through Excellent Grantmaking

Editor’s Note: This article was originally published as part of The Giving Review’s symposium “Conservatism and the Future of Tax-Incentivized Big Philanthropy” and reprinted here with permission.

It is certainly true that, as The Giving Review has noted, private philanthropy in the United States “is increasingly on the defensive.” Whether such a position is justified, however, is a subject of debate. American philanthropy has a long and distinctive heritage, but it is no stranger to controversy. Anyone familiar with John Rockefeller’s struggle to obtain a federal charter for the Rockefeller Foundation (first funded by the donor in 1909 when philanthropy was not yet “tax-incentivized”) knows that his opponents characterized such an institution as an enemy of democracy. The federal charter never materialized, but with a New York State charter in hand, Rockefeller went on to build a legacy of private giving that continues to this day.

As the number and size of private foundations increased through the 20th and early 21st Centuries, concerns about these vehicles continued, always with the question of whether donor-directed philanthropy was actually focused on the “public good,” a term that defies an unbiased definition. Rules and regulations followed to stem activities that were deemed political, mandate an annual payout, prohibit self-dealing, and require tax filings that included transparency around compensation, grantmaking, and investment management. Yet despite the complex compliance demanded by IRS overseers, Senate Finance Committee Chairman Chuck Grassley opened a set of 2004 hearings on the nonprofit sector (charities and foundations alike) by complaining, ”Big money, tax free, and no oversight have created a cesspool in too many cases.”

Facing its critics, the philanthropic sector has never denied that abuses occur, nor has it opposed reasonable regulations. But the dialogue about philanthropy has changed over the past five years or so, and unlike my colleagues at The Giving Review, I am concerned that a conservative nod to new regulatory mandates based on someone’s opinion of “what Big Philanthropy is doing in, and to, America” will have a disastrous impact on philanthropic freedom, on private giving, and on civil society.

Three books published in 2018 questioned the legitimacy—even the very premise—of private philanthropy in the United States. In Just Giving, Stanford University professor Rob Reich, who had once viewed even “big” philanthropy as a counterweight to big government and big business, questioned whether tax-advantaged private philanthropy was simply power exercised willfully and without public accountability, a force that might undermine democracy. Winners Take All became the platform through which former McKinsey consultant Anand Giridharadas questioned the motives and the efficacy of philanthropists who, he alleged, used their giving to avoid confronting how they came by their power and wealth. Edgar Villanueva’s Decolonizing Wealth explored the relationship among racism, an extractive economy, and wealth creation, and called for increased power-sharing and greater equity in philanthropic decision-making.

With those three books as a backdrop, private philanthropy faced the 2020 challenges of responding to a national health crisis, lockdowns, ensuing economic and educational crises, and a simultaneous racial upheaval. The response was overwhelming from small and large foundations that represented a wide spectrum of philosophical persuasions. Beyond providing additional funding that year, foundations changed their grantmaking operations. They eliminated or streamlined applications and reporting requirements, fast-tracked the approval process, used electronic transfers for quicker payments, redirected project-specific grants to general operating support, and removed challenge or matching requirements. Nonetheless, the doubters and critics of philanthropy continued to demand more. In that tumultuous year, a group calling itself Patriotic Millionaires pushed Congress to double the minimum share of assets foundations would be mandated to distribute. One of their spokespersons, Scott Wallace of the Wallace Global Fund, remarked that “only Congress has the power to force this massive injection of wealthy people’s money into jobs and nonprofit charitable organizations working in vital areas like health care, food banks, poverty alleviation, education, social justice, and economic development and job creation.”

In response, I suggested that it was hardly “patriotic” to interfere with the decisions of foundation boards—the rightful stewards of their endowments—regarding foundation payout or lifespan, or to mandate that they abandon their values, missions, or donor intent in their grantmaking. Instead, we should allow foundation governance to work and produce a healthy variety of voluntary responses. And foundations did, in fact, differ in their responses to increased need, with some immediately ramping up their giving overall and others sticking with their typical annual payout while refocusing some dollars on health or on economic issues resulting from the lockdowns.

But there is a more important lesson here. All too frequently, the advocates of what appear to be simple, structural changes to philanthropy are seeking to destroy what Karl Zinsmeister once called “a riotous patchwork” of private giving choices in order to drive all philanthropy to their own notions of the what-should-be-obvious central problems of American society. Conservatives should be wary of what’s behind the curtain and protect

“the broad range of causes and organizations funded by nongovernmental dollars, the increasing number of ways donors can deliver those dollars, and the many timetables on which those dollars are expended [which] all make for a vibrant civil society that is nimbly responsive, deliberately experimental, and determinedly focused all at the same time.”

Conservatives should also reject the premise behind many of the “reforms” currently suggested for both private foundations and donor-advised funds (DAFs) that tax incentives designed to grow giving and protect civil-society institutions from unreasonable government control are actually subsidies that transform dollars privately donated into assets that belong to the public and are therefore subject to democratic control. This claim has been successfully rebutted, most notably by Evelyn Brody and John Tyler in their publication, How Public is Private Philanthropy? We should be clear in our acknowledgment that the state has the authority to regulate and supervise all §501(c)(3) entities to ensure that their assets are not used for private benefit. Beyond that, however, tax incentives do not oblige private foundations and other charities to use their assets to serve the same ends as government. “Autonomy has been one of the defining characteristics of American foundations and other charities,” Brody and Tyler concluded. “Such entities are free to support and pursue differing and even contrary programmatic visions, strategies, methods, and structures provided that they do not stray from their mandate to serve charitable purposes.”

We should also acknowledge that the Internal Revenue Service definition of “charitable purposes” covers a multitude of causes that may not appeal to Americans of one political persuasion or another. I find it quite ironic, for example, that the Hewlett and Ford Foundations and the Omidyar Network are utilizing their charitable resources to replace “the neoliberal paradigm” that liberty and prosperity are best achieved with limited government in a free-market system when their assets originated from the disruptive innovation that flourishes in that very system. Many conservative outlets—including The Giving Review—have also expressed their unhappiness with the grantmaking of the multi-billion-dollar Ford Foundation, and with CEO Darren Walker’s advocacy of moving “from generosity to justice.” As two of its co-editors noted, “Whether Big Philanthropy’s power is in the hands of detached professionals or radical activists, it is very far from what everyday American citizens have in mind when they think of charitable activity.”

While I understand this concern, the distinction between philanthropy and charity is not new; the search for root causes engaged John Rockefeller throughout his life. Today, foundations of all sizes and philosophical persuasions frequently supplement their support for basic community needs with grants to support research or policy-focused nonprofit organizations. We see this in admittedly conservative grantmakers like the Bradley Foundation, which blends its support of faith-based, human service and arts organizations in Milwaukee with its grants to “advance federalism and limit government at the national, state, and local levels.” And we see it in progressive funders like the Park Foundation, which combines grants “dedicated to advancing a more just, equitable and sustainable society” with support for human service and cultural nonprofits in its home community of Ithaca.

Finally, any attempt to define “Big Philanthropy” will be fraught with challenges. Sen. J. D. Vance seems to have decided that $100 million is the magic number, suggesting that foundations with more than that amount in assets be required to pay out 20% each year or else lose their tax-exempt status. That is, in essence, a mandatory death sentence for a broad swath of foundations in this country. And even if there were agreement on a significantly higher number, does it make any sense to demand that foundations that, in Vance’s words, constitute “a massive left-wing bias at the heart of our society” flood civil society with even more progressive dollars?

As I noted in a RealClearPolicy article,

“It’s essential that those who seek to kneecap philanthropic generosity on ideological and political grounds remember what goes around comes around. Ill-conceived government mandates will not discriminate—nor should they. Additional regulations will not just burden the foundations politicians or bureaucrats dislike, but all foundations governed by the same rules.”

It’s likely that any new regulations would have a far greater negative impact on small and regional organizations than “big” ones and reduce the amount of charitable dollars available to those in need.

We should also recognize that that limiting foundation and DAF lifespans and adjusting payout rules will never satisfy the hard-core opponents of philanthropy, those who maintain that wealth itself is the problem and that confiscatory taxes and expanded government spending are the solutions. In the process of attempting to appease them, conservatives will sacrifice both donor intent and donor privacy, essential elements of philanthropic freedom.

Instead, conservatives should forgo the use of government mandates and work to change philanthropy through the optimism and excellent grantmaking that was so evident in the last quarter of the previous century. We can encourage and assist conservative donors to commit to the long term and build new institutions where none exist or where existing ones have grown bloated and stale; to defend and advance our nation’s constitutional principles; to restore democratic norms, including free speech and religious freedom; to promote limited government and voluntary association; to expand economic opportunity within the free market; to strengthen families and communities; to build character and reinforce the value of personal responsibility; and to stand up for individual rights and the equality of all people.

That is how we improve lives, grow and strengthen civil society, and demonstrate the power of private giving based on our core values. Our success—and the strength and resilience it will bring to our communities—is how we can meet the challenge of so-called “Big Philanthropy.”

January 30, 2023