A compilation of interesting and insightful thinking from the last six of 13 recorded discussions so far this year about grantmaking and giving.
The Paradox of Nonprofit Trustworthiness
Leading up to the 1969 Tax Reform Act, “certainly there is a lot of distrust of the Ford Foundation”—including, among other things, because of a number of grants it made to support former aides to Sen. Robert F. Kennedy, Jr., and voter registration in the months prior to a Cleveland mayoral election. This distrust was “exacerbated by a disastrous appearance by Ford’s president, McGeorge Bundy, before a congressional committee.
“The genesis of the ’69 Tax Act really came from two other sources,” however. “One was a very traditional populist distrust of wealth” and “concern about tax evasion and undue influence, led by a Texas Congressman, a Democrat named Wright Patman.
“The other source of this, interestingly, was someone who had come into government with John F. Kennedy—a Harvard law professor named Stanley Surrey, who was an official of the Department of Treasury—and made the argument that tax exemptions and tax deductions should be treated as what he called tax expenditures. In other words, just as if they were actually government appropriations. That money not collected … should be subject to federal oversight, as well. That also led to questions about whether or not donors who had created foundations were behaving charitably—in this case, simply spending the money for charitable purposes, rather than keeping the money in a tax-exempt foundation.”
Since 1969, “we’ve certainly seen, overall, growing mistrust of all institutions in American society. It’s still the case, though, that nonprofit organizations—such as religious ones, medical ones—enjoy higher confidence among the public than Congress, the presidency, and the media, to just take three examples. But we do have a higher level of mistrust in in society.”
At the same time, “we’ve seen the growth of many charities” to the point where “they’re not really the kind of Tocquevillian, local charity that lives in our mythology or imaginations. They’re big businesses and they often operate like businesses—much more dependent on earned income than on donated income, and also government grants and contracts. Donations, in fact, are the third-leading source of revenue, behind earned income and government grants. So they look a lot different than charities traditionally used to look.
“The paradox of nonprofit trustworthiness [is] kind of a love-hate relationship, mixed in with the reality that good philanthropy, good nonprofit activity sometimes does produce distrust, but for a reason. I mean, we have to live with it. It’s hard for people to live with, because you’ll find prominent in public life these days, like Vice President [J. D.] Vance, criticizing foundations or large endowments at universities as kind of hedge funds, and there’s some truth to that. But it’s also the case that when you have a large endowment, you’re free to do some things that you couldn’t do if you were dependent on going with the begging bowl every day trying to solicit money.”
As a result of the 2017 Tax Cuts and Jobs Act, “less than 10% of taxpaying households itemize their deductions and benefit from deductibility. Exemption remains important—exemption meaning that organizations don’t pay tax on their net income. I think there’s a lot of good questions being raised about that. For example, a big university endowment essentially invests money like any other investor does. Should it pay some version of tax on its net investment income? Well, the 2017 Tax Act answered that affirmatively. Major university endowments now do pay a small tax. Should that be broadened? What are the consequences? Those are good questions to discuss.”
- Leslie Lenkowsky, from “A conversation with Leslie Lenkowsky about trust, or the lack of it, in philanthropy and the nonprofit sector (Part 1 of 2),”April 7, 2025, and “A conversation with Leslie Lenkowsky about trust, or the lack of it, in philanthropy and the nonprofit sector (Part 2 of 2),” April 8, 2025
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Viewpoint- and Identity-Based Aims of Pipeline Programs in Academia
“This this is a bad thing to prioritize. You can prioritize it, but university leaders should be more skeptical of taking that kind of money. They should be more skeptical of policies that kind of distort their vision for the university, even if they’re allowed to enact those policies. …
“There’s actually a much-needed philanthropic response, because over the last 20 years, if you were a young progressive in academia, you can look at the academic-career landscape and say, ‘Yes, there’s a place for me. If I go and get a Ph.D., I will be able to get a job. You know, it’s a hard job market …, but there are absolutely opportunities.’ Whereas a lot of conservatives, they look at the academic job market and they say, ‘I better go into law.’ …
“I think there’s a place for universities to help fix that. There’s also a place for philanthropy to do the same. …
“The goal that a lot of conservatives have is to restore academic freedom, and so you can’t just run roughshod over academic freedom in the way that a lot of these programs I think have, but at the same time, I think a lot of universities are especially open right now to the argument that there’s not really ideological diversity and doing things to increase ideological diversity would actually be really good.”
- John D. Sailer, from “A conversation with the Manhattan Institute’s John D. Sailer (Part 1 of 2),”April 15, 2025, and “A conversation with the Manhattan Institute’s John D. Sailer (Part 2 of 2),” April 16, 2025
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DAFs and What Sponsor Language Reveals About Their Priorities
For “Charitable Objectives or Donor Benefits? What Sponsor Language Reveals about Donor-Advised Fund Priorities and Resource Flows,” according to co-author Helen Flannery, “We created a score called the Emphasis Measure, which we then apply to all the different sponsors. A high score meant you are very highly focused on extrinsic donor benefits outside of charitable giving, and a low score meant you were very focused on charitable mission, getting charitable grants out the door.”
According to co-author Brian Mittendorf, “DAF sponsors are straddling these two worlds. They are serving their clients who are donors, but they’re also serving mission outcomes at the same time. If some of these sponsors really mostly talk and use language about what they can do for the donor, versus those that talk about what they can do to achieve outcomes, do they behave differently from one another? Or probably the better way of asking it is, do they attract different types of donors? …
“We didn’t prescribe anything” in the article, Flannery says. “The general idea is that instead of classifying donor-advised fund sponsors by just by organizational type, we would look at classifying them by how they behave. You could look at things like how they present themselves like we did, and you can look at asset growth, you can look at payout, you could look at what kind of contributions they get. …
“One problem with setting good policy right now,” she adds, is that “we’re lumping sponsors together with a really broad brush, and their financial behavior might be very different and might warrant different approaches.”
Mittendorf says, “There is a lot of focus on the payout speed for DAFs,” but “I think there is a reason to step back and ask, like, what is the intent of the law? You know, private foundations are treated differently than public charities for a variety of reasons, and if DAFs are essentially allowing de facto private foundations without the baggage that comes with running a private foundation, then it can’t seem like Congress’s intent is fully fulfilled. …
“These national sponsors—particularly the ones who are very donor-benefit-focused—get way more” tax benefits than private foundations, he continues, “so those are tax expenditures for the government that would not have been to that scale if that money had been given to a private foundation. … Giving to a public charity is much more tax-subsidized than giving to a private foundation.
“If they’re behaving like private foundations, that’s the other piece that Congress could look at. I don’t know the answer to it, but I think in many ways, our research kind of keeps going to: if Congress’ intent is to allow private foundations or allow people, donors to behave as if they run a private foundation without having to deal with all of the added requirements that private foundations have to deal with, then they’re missing something there.”
- Helen Flannery and Brian Mittendorf, from “A conversation with IPS’s Helen Flannery and OSU’s Brian Mittendorf (Part 1 of 2),”May 21, 2025, and “A conversation with IPS’s Helen Flannery and OSU’s Brian Mittendorf (Part 2 of 2),” May 22, 2025
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Politicization of Charity in the U.K.
“[T]he trend we’ve seen over recent decades is of charities that have very-commendable histories like Christian Aid, for example, doing very commendable work,” but are “going towards the political arena and giving in to the political impulses of the people who run them these days, who I’m afraid seem to get a lot of their worldview from the middle class-dinner parties that they go to and have lost sight of the core mission of their charities.”
What are called “quangos” in the U.K.—quasi-autonomous non-governmental organizations—“straddle this line between charity and government” and “this is having real, significant impacts on policymaking.
It’s ironic. I think that people spend their whole careers fighting tooth and nail to acquire political power, and then when they get to the top of the political tree, the first thing they seem to want to do is sign away their power to unelected unaccountable bodies—which seem to swell in number, even though we have a government.”
There’s a “problem with trying to solve this issue from the top down. I think that’s why a lot of the conservative or center-right people” are “generally not calling for new legislation or for a very-aggressive government crackdown. They’re calling for more of a sort of socio-cultural moment, which is sort of happening or we’re getting pretty close to it, where people realize what’s going on, where people notice what charities are doing, and start to withhold donations or start to make a point of donating to somebody else who doesn’t do that. …
“The vast majority of” NGOs “only exist because the government created them and funded them and empowered them. So,” if government just waits “for the ongoing contract or remit to expire and they just don’t renew it anymore, or you launch a significant cut where you give them five to ten percent of their current budget and say, look, here’s the really specific thing we want you to do, the rest of the contentious decisions, we can make those decisions in the government departments ourselves—then you’ll find a lot of this problem goes away by itself.”
- Jason Reed, from “A conversation with the U.K.’ s Jason Reed (Part 1 of 2),”June 2, 2025, and “A conversation with the U.K.’ s Jason Reed (Part 2 of 2),” June 3, 2025
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The Bill Gates Problem
The Bill Gates Problem “is really a critical reappraisal of Bill Gates’ philanthropic career. It’s looking at his exercise of philanthropy as an expression of power. The Gates Foundation is an unregulated political actor, not an innocent philanthropy.” The book is “a close study of Bill Gates and the Gates Foundation, but it’s a case study for a larger problem of extreme wealth. When we allow people to become this wealthy, we know how they’ll use it. You can buy influence through campaign contributions or through lobbying—or, as Bill Gates shows, us through philanthropy.”
Gates, provides “an interesting counterpoint as people today think about Elon Musk and the enormous power that he’s bought his way into through his great wealth. But, you know, I do think it’s important to understand the through-line with someone like Bill Gates, who himself has been a very powerful figure … in domestic politics and policy formulation, you know, a decade or more before Elon Musk. …
“I would say do not underestimate Bill Gates. In the last six months we’ve seen that he has a Netflix documentary, he has a memoir come out, he puts out this big announcement—spin—about giving away two hundred billion dollars. He has a very effective p.r. arsenal to make people pay attention to him and to really praise what he’s doing.”
Melinda French Gates is not “really distinct from Bill Gates in how she’s doing philanthropy or how she sees the world. I think the politics and the ideology … are the same as Bill Gates’, in terms of market-based solutions, the primacy of the private sector, technology is a solution to every problem. I think that’s still a major current in the work that she’s doing and now that she’s an independent philanthropist. … She’s also very Bill Gates in the lack of accountability and transparency with which he operates now as an independent philanthropist.”
In the face of Big Philanthropy, there is “a growing body of detractors, on both the political left and the political right ….” On philanthropy reform in particular and in attitudes toward the mega-wealthy more generally, “I do think that there is a sort of strange-bedfellows thing happening.”
- Tim Schwab, from “A conversation with investigative journalist Tim Schwab (Part 1 of 2),”June 25, 2025, and “A conversation with investigative journalist Tim Schwab (Part 2 of 2),” June 22, 2025
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Revolution, conservatism, progressivism, and philanthropy
“The premise of my speech” at the Philadelphia Society “was we’re more in a revolutionary age” than a conservative one. “Why? Basically because liberalism, the left, progressivism has changed really over the last, say 20, 30 years.
“I think of the days of, say, Reagan and Mondale. Mondale at that time represented a loyal opposition. … There was a sort of a core agreement on some of the basic truths of what American liberal democracy stood for.” Now, the opposition “thinks the current government, the elected government of United States, is illegitimate. …
“What we’ve seen, and philanthropy has been a big push in this, is a change in American liberalism, where they’ve started to reject, essentially, what we used to call the core American values.” Instead of “equality before the law, or you could even say equality of opportunity, equality of citizenship, really,” we instead now “have equity. Equity is very different from equality. Equity means equality of results, and equality of result by my group. … The core of the left argument now is the oppressor” versus the oppressed. …
“What’s Mellon doing? Now, that one has a monuments project. Five hundred million dollars. That’s a half a billion dollars. What are they trying to do? They’re trying to reimagine American monuments. Too many monuments to dead white males—Alexander Hamilton, to Jefferson, to Madison, to Lincoln, for that matter to Washington.
During 2020, rioters “took down a lot of these monuments. So what does Mellon want to do? Well, Mellon’s had some commissions locally in Portland, in Chicago, in Seattle” that get groups together to address what to do about the problem. “Who are these groups? Well, they’re left-wing partisan groups. What are they supposed to do? They’re supposed to figure out what to do with these men” who were memorialized in public. …
“Who’s paying for this? The Mellon Foundation. They want to change the Capitol Rotunda. You know, too many … of these white guys that the states have sent. Let’s have some new people. … Let’s get some new statues in there. Let’s reimagine American history. This is the Mellon Foundation. They’re spending, again, a half a billion dollars on this. They’re doing it now. They’ve gotten bolder. …
“The situation is we’ve got is this new left, which is very different from the left of 30, 40 years ago. It’s not Arthur Schlesinger, who loves America.” It’s “not the loyal opposition. Conservative philanthropy has to be sort of aware of that. I think they are starting to catch on—not completely, but they are, at this point, I think they’re funding both what we call the legacy conservative institutions and elements of national conservatism, the New Right, and so on. They’re funding both right now. …
This is “actually counterrevolutionary, because the revolution has already succeeded …. The woke revolution that was implemented quickly during the George Floyd days. What you have now is a counter-revolution, another revolution that’s against a revolution.
“We want to reverse. In a way, this is what [Bill] Buckley was saying with [Willmoore] Kendall.
“The New Right is not by itself enough. The legacy conservatives are not enough. It has to be sort of a coalition of this New Right and legacy. You have these foundations, Scaife and Bradley, and they’re sort of funding both people, both groups— which makes sense, I guess, from their point of view. So there’s an awareness that times have changed. That’s all I’m suggesting here: that we were aware of what’s changing.”
- John Fonte, from “A conversation with the Hudson Institute’s John Fonte (Part 1 of 2),”June 30, 2025, and “A conversation with the Hudson Institute’s John Fonte (Part 2 of 2),” July 1, 2025
This article first appeared in the Giving Review on July 8, 2025.
Click this link for the original source of this article.
Author: Jon Rodeback
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