Policy Philanthropy Should Be Protected

Philanthropy Roundtable distinguishes between political giving and policy philanthropy in new paper 

WASHINGTON – NOVEMBER 3, 2022 In recent years, government officials, media personalities, advocacy groups and others on the political left and right have increasingly relied on the term “dark money” to demonize the use of donations to advance policy ideas and partisan political activities by their adversaries. What hasn’t been made clear is these two types of activities and the giving that supports them are very different in practice and by legal definition. It’s important for the American public, policymakers and particularly donors to understand that distinction. Conflating political and policy giving and calling for greater restrictions on giving could negatively impact dollars flowing to charities and the work these organizations have historically done to support civil and human rights efforts as well as other humanitarian causes.  

Despite recent criticism of philanthropy to organizations that work on policy matters, it is an important part of the philanthropy landscape, argues a new paper from Philanthropy Roundtable released today, “Policy Philanthropy and its Role in Civil Society.”  

“Americans have the right to support the causes they believe in, but all too often, their support for nonprofits is wrongly deemed as political activity,” said Philanthropy Roundtable Senior Director of Policy and Government Affairs Elizabeth McGuigan, co-author of the paper. “Rather than painting all policy philanthropy with the ‘political giving’ brush, we need to distinguish giving to candidates, political parties and political action committees from giving to organizations that work to improve society through policy research and education.”  

In the paper, McGuigan and co-author David Bass highlight the confusion resulting from the broad use of the term “dark money,” a phrase wrongfully applied to charitable gifts protected by donor privacy rules and norms. They write, “What began as a term associated with political giving, however, is now utilized to taint charitable donations made to 501(c)(3) organizations, other nonprofits and gifts made through donor-advised funds, which allow for private charitable donations to 501(c)(3) charities.” 

Philanthropy Roundtable recommends the following three steps to affirm and protect the lines between political giving and policy philanthropy: 

  • Depoliticize the Internal Revenue Service (IRS). 
  • Improve the enforcement of existing laws. 
  • Leverage existing funding streams for IRS improvements.  

Read more about these policy goals in the paper here.  

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