A compilation of interesting and insightful thinking from the first seven of 13 recorded discussions so far this year about grantmaking and giving.
Nonprofit Sector’s Symbolic Capitalists and Their Privileges, Rights, and Freedoms
“A lot of the people who administer nonprofit organizations are themselves symbolic capitalists. When you look at the space more broadly, it’s actually a distressingly small share of total philanthropic donations that go to tangibly improving the lives and livelihoods of people who are poor or marginalized or disadvantaged in society. A lot of nonprofit work is actually oriented towards things like changing how people think and talk about issues or other, more symbolically oriented things like that.”
Relatively well-paid, high-status symbolic capitalists can now “have continued income flows and all of this while ignoring and disparaging and demeaning and alienating huge other swaths of society. That’s a thing that we can do now that we couldn’t do before because of these shifts and because of the growing size of the symbolic profession and the increasingly interconnected nature of these institutions and their increasing consolidation in a small number of cities. …
“One unfortunate dynamic that often takes place, and that’s been increasingly pronounced to my mind, [is] when we’re confronted with the kind of populist critique about how our institutions are out of touch, how growing numbers of people are alienated from us in our institutions, they don’t feel like they have a voice or a stake in the things that we’re doing …. We tend to reflexively try to defend our institutions.”
In response to the critique, “you have two groups—one of them saying there’s nothing to see here, don’t believe your lying eyes, everything’s great, it’s wonderful, you have another group of people who are saying, ‘Yeah, you’re right. Actually, there is this real big problem. These people are out of touch and you actually can’t trust them to reform themselves. They’ll never reform themselves. … What we need to do is just burn it down.’
“If those are the two messages people are presented with, it’s pretty straightforward which of those is going to win. The burn-it-all-down people are going to win. It’s actually incumbent on us to take these concerns that people have seriously and engage them in a serious way, in a way that helps build their confidence in these institutions, bridge some of these sociological gaps, and so on. It we just keep defending defending defending, denying denying denying, that only adds more fuel and power to the very people who are talking about burning our institutions down. This is a miscalculation that a lot of us end up making in these kinds of moments.”
Elite symbolic capitalists don’t have their “privileges and rights and freedoms just because we’re special, amazing people who are entitled to having more autonomy than other workers. The idea behind giving us these freedoms and privileges is that they’re supposed to empower us help us to help other people. Freedoms come with responsibilities, privileges come with duties, rights come with obligations. To the extent that people don’t perceive us to be fulfilling our duties, engaging in a responsible way, living up to our obligations, then of course the natural and normal response is for them to come for our rights and freedoms and privileges.”
- Musa al-Gharbi, from “A conversation with We Have Never Been Woke author Musa al-Gharbi (Part 1 of 2),”January 13, 2025, and “A conversation with We Have Never Been Woke author Musa al-Gharbi (Part 2 of 2),” January 14, 2025
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Quincy Institute’s Think Tank Funding Tracker
“We want to encourage think tanks to be far more forthcoming in their funding sources, but we want to also just report as accurately as we can on what we did find. … We went through all of the financial disclosures of these think tanks and just, transaction by transaction, built out this website.”
The primary purpose of the project “is for disclosure of conflicts of interest to be present. That’s really the biggest thing, right? … We made this project largely with journalists in mind. We want good-faith journalists to use this database in order to disclose to their readers whether there are certain conflicts of interest present.” He adds, “I think the best thing to do is to let the readers make that decision for themselves. If a think tank as an institution is receiving funding from one of these sources and then they’re asked about” a specific subject area in which the funder may have an aim or interest, “you know, you might want to take that with a grain of salt.” …
“Think tanks are a little bit of the Wild West. If a think tank is engaging in political activities on behalf of a foreign government pretty explicitly, it could fall into” the category of entities to which the Foreign Agents Registration Act (FARA) applies, “but there’s kind of been a reticence to use FARA for think tankers, I think in part because it would just be a huge shift, right? …
“[W[hat we’re asking for is not regulation in the strictest sense,” but transparency. “It’s getting think tanks to simply disclose their donors.” He acknowledges the objections, listing some of them, but says “the status quo is not good enough.”
- Nick Cleveland-Stout, from “A conversation with the Quincy Institute’s Nick Cleveland-Stout (Part 1 of 2),”January 28, 2025, and “A conversation with the Quincy Institute’s Nick Cleveland-Stout (Part 2 of 2),” January 29, 2025
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Buckeye Institute Report, Beware the Trojan Horse of Rulemaking Nongovernment Organizations
“To be fair, these organizations are not inherently bad organizations and I think that’s something I want to say at the very front end. There’s a lot of utility to what these groups do and what they are.
“A lot of people say, well, this is a really negative report on them, and I think the way I’d rather characterize it is we want people to be careful, we want people to be aware, we want people to pay attention, and we want to have a greater degree of transparency. …
“Now, sometimes legislators have very specific technical expertise that they can bring, and that’s very good. Oftentimes, they don’t, and that’s where there is that utility of bringing the expertise in. … Getting the balance right on this is what is appropriate. You don’t want to eliminate the ability to have expertise on sometimes pretty-arcane things that are out there, but you can’t just trust the bureaucracy either.
“I would say that the average person, probably even the average legislator, knows very little about a lot of these organizations. [We] need to know who these folks are. We need to know what people are doing when they go to conferences. We need to know what votes are on some of these models and things like that. We should just know. It’s not to say that it’s all some kind of underground bad thing, but if you don’t know, it can breed skepticism, it can breed concern, and we just can nip that in the bud if we have some more things and guidelines on the front side. …
“If you’ve got an entity that’s saying these are the principles here and we’re going to start passing things where it’s going to come through into your code in some way, I think legislators have a right to say, we ain’t going to do that. They just need to be aware about it and to the extent that they’re not, that’s the problem. …
“What we’re trying to do now is rein back in some of the ‘administrative state,’ if you will. It’s a real thing. It exists. It’s grown. … It wasn’t like this a hundred years ago, and while there’s always going to be a need for some degree of rules. we need to be able to right-size those things and have people in charge. … Let’s make sure that we just let people be aware. Bring the accountability back. Doesn’t mean stop everything, but it just means bringing accountability to the table.”
- Greg R. Lawson, from “A conversation with The Buckeye Institute’s Greg R. Lawson (Part 1 of 2),”February 3, 2025, and “A conversation with The Buckey Institute’s Greg R. Lawson (Part 2 of 2),” February 4, 2025
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Capital Research Center Series on Fiscal Sponsorship
“I would agree that as fiscal sponsorship is currently practiced and reported, it does not fulfill the Grand Bargain transparency angle that we’ve set up.”
In considering any reform of fiscal sponsorship, “I think there’s a balance you have to strike. I’m not saying that fiscal sponsorship should be restricted meaningfully” or that “it’s some terrible thing out there. I think it does a lot of good. I think it helps the nonprofit sector advance new projects and do it in creative ways.
“The idea I had was more to increase the transparency around them without burdening the operations of them in any way. At least, that seemed to make sense to me. I thought the best way to do this would be through updates to the Form 990. … There’s no disclosure of fiscal sponsorship on the form. I think you could change that, I think you can do that pretty easily.
“Depending on what you do as a nonprofit, you’re required to file any number of schedules with your 990. … The very next unused letter in the list of IRS schedules would be Schedule S … Why not have a new schedule for fiscally sponsored projects?” It would be “very simple. All you have to do is, you could structure it just like the current Schedule I. You could have a table list all fiscally sponsored projects—revenue, expenses, assets, principal officer, have you applied” for tax-exempt status?, “yes or no, date upon which sponsorship began and ended, if applicable. Done. You would just have that schedule and that way, you would have a total disclosure at least of who’s sponsoring which projects on the delayed timetable that the 990s are released on. …
“[L]et’s talk for a minute about why this is so important.” Fiscally sponsored “projects have become so important to this whole ecosystem of what’s going on. I mean, you can just name them off the top of your head, fiscally sponsored projects that just within the last few years have been nationally, socio-politically relevant—Black Lives Matter Global Network Foundation, Demand Justice, Movement for Black Lives, all these things that have become national news. … Nobody can have any information about their financials. It’s important.
“I worry about keeping public faith in the institution of the tax-exempt sector and I fear that the way fiscal sponsorship operates—particularly in the public-policy area, even in the political sphere …. I fear that the way it currently is looks dark to people and looks a little bit ‘behind the scenes.’ And I think if you had this modest level of disclosure, you could counteract a little bit that perception.
“We’ve collectively, society, through our elected representatives, made the choice to incentivize the activities of these groups through tax advantage, and I think we should be able to verify what they’re doing with their money.”
- Robert Stilson, from “A conversation with the Capital Research Center’s Robert Stilson (Part 1 of 2),”February 10, 2025, and “A conversation with the Capital Research Center’s Robert Stilson (Part 2 of 2),” February 11, 2025
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San Francisco’s DA and the MacArthur Foundation
When the office of San Franciso district attorney Brooke Jenkins sent a memo to the MacArthur Foundation objecting to the foundation’s suspension of a grant to the office for a criminal-justice program, “It was very clear. The message was, ‘Stop talking down to us.’ Brooke Jenkins, in her public life and on her campaign, has made her identity a prominent part of her message, which is, ‘I know these communities and I know what folks need and … we’re going to resist this “white savior” complex coming from foundations that dictate our public-safety measures.’ It falls very much in line with what she’s done over the years. …
“[T]he criminal-justice reform that we saw in the 2010s is facing a backlash from voters across San Francisco and California. … There is this backlash. You can talk about whether it’s actual dissatisfaction with these policies, or whether there’s been a very-effective marketing campaign against them, or whether post-pandemic, things have gotten visually chaotic on the streets and people [are] seeing more visible homelessness and drug use and associating that with crime and then criminal-justice policies. But the voters are turning on some of the reforms from the 2010s. …
More broadly, “I’m not sure the general public has much of a view on the philanthropy here. I mean, I think if anything, people would be surprised to even learn that foundations support a government agency. I mean, even I was a little surprised at the amounts that they support particular programs and that they do have a say in or at least, because of the funding, can have an influence on how those government programs are run. That would be a surprise in and of itself, I think, more than anything. …
“I think there’s more work to be done by us and other local media on, well, how much of a city budget is foundation-supported, private-supported.”
- Joe Rivano Barros, from “A conversation with Mission Local’s Joe Rivano Barros (Part 1 of 2),”March 3, 2025, and “A conversation with Mission Local’s Joe Rivano Barros (Part 2 of 2),” March 4, 2025
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DAFs, the Public-Support Test, and the Benefit of Clear, “Bright-Line” Rules
“The public-support test is the fundamental way that Congress enacted into law a way to distinguish between private foundations and public charities. Simplifying a little bit, basically, the public-support test says that if you have multiple people, unrelated donors, then you’re a public charity, and if you don’t have multiple unrelated donors, then you’re a private foundation. … Fundamentally, it’s the way that Congress divided the world of charities into two camps, and they did that specifically to apply a more-strict regulatory regime to private foundations. It’s built on this theory that having multiple unrelated donors is itself a check on the organizations. …
“If I create a charity, like the Ben Leff Fund, and if I were to donate money directly to it—I’m the only donor, I give it a million dollars—it would be a private foundation. But if instead, I just donate the money to the donor-advised fund [DAF] and then I say to the donor-advised fund, ‘Hey, will you distribute that money out to the Ben Leff Fund?’—and it can take literally two minutes—I could donate it” to the DAF “and in the same breath, say, ‘Hey, distribute 100 percent of the money I just gave to you out to the Ben Leff Fund.’ The Ben Leff Fund has a million dollars. It came right from me. It didn’t come from anyone else. Under current law, that would be a public charity, not a private foundation. It’s like a bounce pass, or a conduit, or a loophole, that structure—the fact that under current law, you can create a charity which really in principle and under prior law, really should be a private foundation. …
“The ultimate abusive purpose would really primarily be to use this entity to engage in some kind of self-dealing. There are other things that you could use this entity for. For example, if you want to use your entity for political ends, private foundations are much more restricted than public charities in what kinds of political spending they can do and that’s especially true when you add a 501(c)(4) organization into the mix. So if I bounce pass into a public charity and then that public charity makes grants to a 501(c)(4) organization, it would be much more restricted in how it did that if it was a private foundation making those grants than if it’s this public charity. So there’s lots of opportunities for abuse ….
“I think the common sense of it is good enough without having to impute motives to any particular philanthropist. I don’t have great evidence of a sinister user, and it’s not really that important when you have such a basic flaw in the regulatory regime that creates the opportunity for abuse. It would be great if I had good evidence of how widely it’s being used and how much abuse is being caused, but it’s not necessary to understand that we have a regulatory flaw. …
Some “these bright lines, these really clear rules that make it harder to use DAFs for self-dealing,” for example, “benefit the DAF market. I think it actually increases the attraction of DAFs for the vast majority of people using those DAFs because it separates out the people who are going to use it for self-dealing purposes and most people [who] don’t want to use it for self-dealing purposes.” Most people “want the institution that they trust to be making good rules to keep it clean, so to speak. … By creating more strict rules, they actually benefit the use of DAFs” for the proper purposes.
“The primary benefit of a DAF is good old-fashioned economic efficiency. You can reduce the administrative costs, which in effect are lost costs. In some cases, you can reduce those administrative costs if what you’re doing is relatively simple because you have economies of scale and scope in these big organizations creating these little funds.”
The current legal and regulatory system’s “opportunity to use DAFs in an abusive way, I think, is bad for the donor-advised fund market, because the benefit of the donor-advised fund market is it has simplified, clear rules to prevent some abuse.”
- Benjamin M. Leff, from “A conversation with American University Washington College of Law’s Benjamin M. Leff (Part 1 of 2),”March 20, 2025, and “A conversation with American University Washington College of Law’s Benjamin M. Leff (Part 2 of 2),” March 21, 2025
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Nonprofit Activity Surrounding Judicial Nominations and Confirmations
Regarding whether there is ideological balance among Internal Revenue Code §§ 501(c)(3) and (4) organizations engaged in activities surrounding the judicial-nomination and -confirmation processes, “I don’t know, it’s hard to tell. In terms of number of groups, it’s probably the same. My guess would be that, traditionally, the liberal groups are better capitalized than the conservative groups.”
Another advantage that liberals “have in this space is all of these liberal groups have traditionally strong connections with Big Law in ways that sort of serve as a force-multiplier almost for what they’re trying to do.” While “maybe that’s changing” now, “that’s a structural advantage the left has traditionally had. …
“In this space in particular, there tend not to be people in the government who do it for a very long time. It’s an area where there’s a lot of turnaround, so having people on the outside who have this knowledge can be very helpful.
“There’s a bit of a difference too, between how Republicans and Democrats operate in this space. What I’ve found is that Republican staff tend to do a lot of their own work. Our guys really dig through these people’s records.” Liberals “tend to rely more, especially when they’re on offense, on their outside groups to give them the information. … How the groups play with relation to the official side, it really does vary from party to party.”
This “could be function of the resources available,” or it “could just be the tradition of it. Again, they’ve been doing that for a long time. Or, the other sort of difference is, as a general matter, their base and their organizations are a lot more animated in trying to take out Republican nominees, and ours are a lot more animated in trying to get Republican nominees over the finish line.”
- Michael Fragoso, from “A conversation with the Ethics and Public Policy Center’s Michael Fragoso (Part 1 of 2),”March 31, 2025, and “A conversation with the Ethics and Public Policy Center’s Michael Fragoso (Part 2 of 2),” April 1, 2025
This article first appeared in the Giving Review on July 7, 2025.
Click this link for the original source of this article.
Author: Jon Rodeback
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