Should Giving be Anonymous?

Should Giving be Anonymous?

May 06, 2021 Howard Husock

Philanthropic giving by donors who prefer to be anonymous was framed as suspect in a recent U.S. Senate hearing entitled “What’s Wrong with the Supreme Court: The Big Money Assault on Our Judiciary.” Sen. Sheldon Whitehouse (D-R.I.), chair of the Judiciary Committee, charged, as he has repeatedly done in recent years, that “dozens of anonymously funded legal organizations have sprung up” to support “gatekeeping organizations” that seek to secretly influence the fate of judicial nominations.

But such charges about “dark money” overlook that the vast majority of support for nonprofits of all kinds – an estimated 96%, according to national charity account management organizations – are publicly disclosed, and there are time-honored reasons that some donors prefer anonymity. Like fishing fleets that catch a wide range of species in their nets when they are seeking only one, any effort to legislate against anonymous giving threatens philanthropy as a whole. 

Five reasons some donors prefer anonymity: 

1. Support for Controversial Causes: The obvious contemporary reason is fear of reprisal. Just as donors to the NAACP in the Jim Crow era feared disclosure, so do donors in today’s environment. Support for what some may believe are controversial causes—like Planned Parenthood or National Right to Life—can bring public criticism or career jeopardy upon specific individuals. Of course, there are also a multitude of defensible rationales for anonymous giving that have nothing to do with so-called “cancel culture” as well.

2. Religious Philosophy: Maimonides, the famed Spanish-born 12th century Torah scholar, ranked a wide variety of forms of charitable giving. He disdained, for instance, charity given grudgingly. The righteous, he believed, gave in secret, “performing a mitzvah solely for the sake of Heaven.” It’s doubtful that he was thinking about public policy influence. But the fact remains, regulating anonymous giving would threaten those who prefer to follow his guidance—by donating to religious causes or simply because of their religious beliefs.

3. Modesty: Those who support an organization or volunteer for it may not wish to be deferred to as a benefactor in discussions about the direction of the group. They may prefer that their ideas be considered on their own merits, outside the financial context.

4. Preserving Funds for Giving: For the same reason that some lottery winners prefer that their names not be made public, some donors may prefer not to receive solicitations. The sheer administrative effort required to screen such solicitations can impose overhead costs on a family foundation, for instance, that would lead to the collateral damage of reducing funds available for charitable giving.

5. Self-Protection: In addition to such moral and ethical reasons above, we cannot avoid acknowledging practical reasons. Some donors may fear that disclosure could reveal the extent of their wealth, leading not only to unwanted solicitation but to invite identity theft.

Politics inevitably leads to debate and disagreement, some of it harsh. Those in public life should consider and, if they choose, reject ideas put forward by groups they disdain. But those ideas should be considered on their own merits. Efforts to inhibit debate by regulating anonymous support risks not only discouraging free speech but also set an unwelcome precedent that could inhibit philanthropy as a whole and harm those Americans and communities in need who benefit from charitable giving.