Why Policy Philanthropy Is Important for Civil Society and Should Be Protected

In recent years, there has been a push by some policymakers and anti-privacy activists to restrict the rights of donors who choose to support public policy giving. This push has been fueled by the seemingly blurred lines that privacy opponents claim exist between policy nonprofits and expressly political giving to candidates and political parties.

But policy-oriented philanthropy is an important part of the philanthropic landscape and should be protected. That’s the conclusion of a new primer Philanthropy Roundtable’s Senior Director of Policy and Government Affairs Elizabeth McGuigan and I wrote exploring the threats posed to policy-oriented giving and the differences between this type of philanthropy and expressly political giving. The title of the primer is “Policy Philanthropy and Its Key Role in Civil Society” and is available for download here.

“The ability for charities to engage in policy debates is at the very core of civil society. Our position is that all gifts to 501(c)(3) organizations are charitable gifts,” writes McGuigan. “These may include donations for policy-related activities, but such gifts are not political, and donor privacy regarding such gifts is imperative.”

Criticism of giving to policy-related organizations and activities has come from both the political left and right. For example, hedge fund manager and U.S. Senate candidate J.D. Vance penned an op-ed for Newsweek in October 2021 arguing that “any charitable organization with an endowment over $100 million must spend 20% of its endowment each year, or else lose its 501(c)(3) status and the preferential treatment of its income.” On the left, the Institute for Policy Studies calls for stifling foundations that support policy-oriented nonprofits through tactics like:

  • forced donor disclosure for those giving to nonprofit organizations
  • new onerous restrictions on donor-advised funds, including required payout rates, donor disclosure and time limits on their existence
  • additional payout and sunsetting requirements for private foundations
  • several other new handcuffs for the charitable sector

The solution to this alleged problem is not to further restrict philanthropy, but to depoliticize and improve the integrity of the Internal Revenue Service (IRS) and to enforce existing laws and regulatory structures.

“There is no ‘hierarchy’ of charities, with some causes more valuable than others,” writes McGuigan. “Our legal system should support the right of foundations to privately support policy-focused nonprofits, and donors should not face reprisal for doing so.”

“Policy Philanthropy and Its Key Role in Civil Society” contains important information to be aware of, given the current threats posed to philanthropy-oriented giving.

Read the full primer here.

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