THE IRS CODE 501c3 designates qualifying institutions as “charitable foundations,” exempting them from paying taxes so long as they are “nonpolitical.” But are they? Recently, it was announced that a group of “liberal” tax-exempt foundations, including George Soros’s Open Society Foundations and the Ford Foundation, pledged more than $100 million to the racist, antipolice, riot-fomenting organization Black Lives Matter, also a 501c3.1
The Ford Foundation is a $12-billion organization whose official mission is to “advance human welfare.” This is virtually identical to the government’s own constitutionally defined mission. But because the government’s budget is encumbered by obligations like the national debt and entitlements, it has been estimated that the Ford Foundation actually has more discretionary income than the federal government. Its broad mission, like the government’s, provides Ford with a mandate to influence, shape, and underwrite policies and programs that affect every aspect of American society. Under IRS rules, Ford funds tax-exempt “think tanks” that hire experts to develop policies and then lobby legislatures to get taxpayers to fund them. Ford and scores of other tax-exempt foundations, think tanks, and health advocacy groups were involved in architecting the Affordable Care Act, otherwise known as “Obamacare,” and then in lobbying the public and the Congress to pass it.2 The range of the influence—the political influence—of these tax-exempt entities extends from health, to immigration, to environmental and national security policies, and in fact through the entire range of issues with which government is concerned. In other words, every aspect of the progressive agenda is advanced through organizations and institutions that the IRS designates as charitable and tax-exempt.
These tax-exempt entities are divided into funding institutions like Ford and policy/advocacy groups like Black Lives Matter and the American Civil Liberties Union, which used its tax-exempt funds to draw up the Sanctuary Cities pledge of noncooperation with the Department of Homeland Security’s mission to keep illegal aliens and terrorists out of the country. The entire so-called rights coalition, which includes the ACLU, NARAL, the NAACP, MALDEF, Planned Parenthood, and a hundred similar left-wing groups that lobby and campaign to push the Democratic Party farther to the left on their issues, is composed of organizations that fall under the 501c3 IRS code. Many of these organizations, like the ACLU, Planned Parenthood, and the NAACP, have non-tax-exempt arms too, so they can openly conduct partisan political campaigns, even with the same personnel.
The left-wing funding organizations, of which Ford is the largest, have assets in excess of $100 billion, or more than 10 times greater than the assets of conservative foundations.3 On the other hand, the gap really gets huge when one looks at the policy think tanks and advocacy groups for which Ford and the others provide the funding.
As of 2012, there were 117 progressive 501c3s that devoted more than 50 percent of their program activities to supporting open borders or citizen rights for illegal aliens. There were only 9 conservative 501c3s to oppose these same agendas. The total annual revenues of the progressive immigration groups—the funds they received annually from progressive foundations and individual donors to spend on advocacy—amounted to $306.1 million, while the revenues available to conservative groups was only $13.8 million. In other words, the total funds annually available to the left for advocacy to promote open-borders agendas were more than 22 times greater than the total funds available to conservatives to oppose them.4
The imbalance is even worse in regard to other issues central to the progressive agenda. As of 2012, there were 553 environmental 501c3s dedicated to promoting the left’s environmental causes like global warming and its solutions—more government controls. There were only 32 conservative groups to oppose them and promote market-friendly approaches to environmental problems. The net assets of the progressive environmental groups totaled $9.53 billion compared to $38.2 million in net assets of the conservative groups. This amounted to a progressive advantage in environmental lobbying of 249 to 1. The annual grants awarded by the 32 conservative groups to environment-related issues totaled $1.2 million. The annual grants awarded by the 553 progressive environmental groups totaled $555.4 million. In other words, progressive grants to promote their environmental agenda were almost 462 times greater than their political opponents.5
Why haven’t Republicans done something about this monstrous advantage provided to the left by the current tax code to shape what government does and does not do? To rectify this situation does not require rocket science. The loophole that allows this inequitable and destructive situation to exist is obvious. The IRS defines “political” as activities on behalf of electoral candidates and political parties. By regarding everything else (so long as it is not profitable or to someone’s personal benefit) as “charitable,” the IRS provides a cover and funding base to enterprises that are evidently not charitable. Hospitals available to help all people in need are charitable. Organizations devoted to encouraging illegal aliens to break American laws are not.
The existence of these tax-exempt organizations with massive amounts of money behind them disenfranchises American voters. If the Ford Foundation has billions available to devise public policies and then persuade legislators that they are sound, what does that do to the interests and preferences of individual voters whom these legislators are supposed to represent?
Instead of planting their heads in the sand, as they have for decades, Republicans should be demanding revisions to the tax code and redefining charities to be institutions like hospitals and adoption services that exist for the benefit of everyone and not just political factions. Nonprofits concerned with policy and political issues should not be getting subsidies from the taxpayers; truly charitable institutions should. Congress should also pass legislation sunsetting tax-exempt funding foundations—whatever their purposes—within 5 to 10 years of their creation. The Ford Foundation has been criticized by the Ford family for departing from the intentions of its founder and for attacking the capitalist system that created its wealth. Many similar foundations pursue policies that bear no relation to the intentions of their founders. Yet they exist in perpetuity, receiving annual subsidies from a public that has no say in their directions.
The remedy is to terminate them after the founding generation dies out. Older foundations like Ford should be sunset immediately and its funds distributed to hospitals and other institutions that serve the needy and the poor, recipients for whom the word “charity” was invented. As the tax law is presently designed, the Ford Foundation will exist forever and will be accountable to no one except a self-perpetuating board, which is accountable to no one. This is undemocratic and unacceptable. Republicans have ignored the problems created by this system for far too long. Unless they are prepared to get serious about fighting the war the left has declared, unless the powers of this shadow political universe are checked, the progressives’ march toward a societal transformation cannot be arrested, let alone stopped.