What Lawmakers Need to Know About Foreign Donors to Nonprofits and Political Advocacy

As lawmakers investigate the rare instances of foreign interference in U.S. elections through nonprofits, Philanthropy Roundtable encourages them to protect charitable giving by upholding the constitutional right to donor privacy

On December 13, 2023, the U.S. House Committee on Ways and Means held an Oversight Subcommittee hearing on the “Growth of the Tax-Exempt Sector and the Impact on the American Political Landscape.” The subcommittee, led by Rep. Jason Smith (R-MO) and Rep. David Schweikert (R-AZ), aimed to explore concerns about donors using tax exempt organizations for political purposes, especially foreign donors, and policy reforms to address these concerns.   

In response to a call for written comments, Philanthropy Roundtable submitted a Statement for the Record to the Ways and Means Oversight Subcommittee hearing. In our written statement, we emphasize that in a nation built on individual liberty and opportunity, the spirit of giving has woven itself into the fabric of our story. Philanthropy, fueled by the generosity of countless Americans, isn’t just about charity. It’s the engine of social progress, a cornerstone of our democracy and a vital counterbalance to an ever-expanding government. 

Amid concerns about the growing nonprofit sector, it’s crucial to remember its vital role. A strong nonprofit sector isn’t a threat – it’s a testament to the strength of our civil society. These organizations aren’t simply filling in the gaps; they’re on the ground, nimble and deeply informed about the communities they serve. They provide education, health care, housing and food to those in need, strengthening the fabric of American society. 

From Andrew Carnegie’s libraries to Susan B. Anthony’s fight for women’s suffrage, philanthropy has driven transformative change throughout history. It empowers individuals to take ownership of their communities, bridges societal gaps and fosters innovative solutions to the challenges we face. This dynamic network of nonprofits – from food banks to global humanitarian initiatives – employs millions, reflects the unique needs of diverse communities and often delivers more effective, cost-efficient solutions than traditional government programs.  

Furthermore, in a time of increasing government size, a vibrant nonprofit sector serves as a crucial check and balance. It fosters civic engagement, empowers citizens to be active participants in shaping their communities and provides a platform for free speech and diverse viewpoints. This vibrant exchange of ideas and actions is the lifeblood of democracy, ensuring it remains responsive to the people it serves. 

Of course, with any system, concerns about abuse exist. Philanthropy Roundtable recognizes these concerns and advocates for strong enforcement against any wrongdoing. However, it’s essential to remember that instances of abuse, while unfortunate, are statistically rare. Available data shows a vast majority of nonprofits operate with integrity and dedication, delivering on their vital missions. 

Finally, amid calls for donor disclosure and empowering government agencies, we must ensure donor privacy is protected. Private giving allows individuals to support causes they believe in, free from fear or undue pressure. This freedom fosters diversity of thought, fuels innovation and ensures the wellspring of charitable giving remains unpolluted by external influence.  

As the Ways and Means Oversight Subcommittee considers these comments, we urge them to remember the vital role of nonprofit organizations in upholding American values and strengthening our communities. While concerns about the sector deserve examination, we must approach any reforms with a clear understanding of the potential consequences. Forced donor disclosure or further empowering government agencies can stifle the philanthropic spirit, hindering its ability to drive social progress and protect individual liberty. Let us work together to ensure oversight strengthens, not stifles, the incredible contributions of the nonprofit sector, safeguarding their ability to be a powerful force for good in our nation. 

Read our full Statement for the Record. 

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