On September 7, 2023, Philanthropy Roundtable provided information in response to the House Ways and Means Committee’s “Request for Information: Understanding and Examining the Political Activities of Tax-Exempt Organizations.”
While we understand the serious concerns raised by recent media reports about the interference by foreign nationals in American politics, the Roundtable wrote to urge the committee to exercise caution when considering disclosure-based policy solutions that may very well hurt the generous charitable community. Our nation’s vibrant landscape of nonprofit organizations includes everything from local food banks and nationwide housing charities to international disaster relief groups. This vast network has long represented a tradition of American citizens voluntarily joining hand in hand to address concerns and uplift communities throughout our country.
Many donors to these great causes choose to remain private in their giving for a variety of reasons such as religious traditions, wanting to keep the attention on the charities doing the good work or simply a desire to avoid unwanted solicitations from other organizations. It also is impossible to ignore that we live in a highly divisive society in which those who support controversial causes or unpopular approaches have faced threats and harassment. Donors to these organizations who wish to remain private have the right to be protected in their generous charitable giving.
Whether it was in 1958 with the NAACP decision, or in 2021 with the Americans for Prosperity Foundation v. Bonta case, the Supreme Court has responded forcefully to unconstitutional government disclosure mandates, and we must keep that in mind. Nonprofits, both 501(c)(3)s and 501(c)(4)s, can and do engage in issue advocacy lawfully. In this, they serve as a key counterbalance to a large, powerful government.
Where bad actors are breaking the law or abusing the nonprofit system, groups should be investigated and prosecuted to the fullest extent of the law. However, the answer to this abuse should not be sweeping disclosure of nonprofit donor information. The IRS has proven it does not prioritize the confidentiality of taxpayer information and we do not believe that providing it with more information about the charitable donations of Americans will help to address the committee’s concerns.
Instead, granting the IRS additional powers could create opportunities for political manipulation, where the agency might be used to target organizations that hold opposing views. The poor track record of the IRS in safeguarding donor information, coupled with the risk of political weaponization, should be red flags to lawmakers as they consider proposals to empower the agency with further oversight authority.
Our focus must pertain to protecting our vibrant charitable sector and investigating the bad actors abusing our system. Any policies that chill the generosity of charitable donors also hurt our communities and people in need.