Trump and Philanthropy: A Ten-Point Plan for Philanthropic Reform
As Donald Trump’s inauguration on January 20, 2025, approaches, the nonprofit sector finds itself at a defining crossroads. Mike Berkowitz, from the Democracy Funders Network, has raised concerns in The Chronicle of Philanthropy about the potential havoc Trump's administration might wreak on left-of-center philanthropy. He warns that:
The re-election of President Trump has placed American civil society in its most vulnerable position in a generation.
Those who seek to undermine U.S. civil society are adopting tactics reminiscent of autocratic states, aiming to quash legitimate opposition and free debate.
Philanthropists and nonprofits must confront this threat by, among other things, building coalitions of pro-democracy advocates.
While Berkowitz's alarm suggests a time of vulnerability, this juncture also presents a unique opportunity for reform rather than merely fueling the narrative of "authoritarian populism."
Here’s a ten-point plan for philanthropy reform to consider:
Transparency in Funding: Government funds many large U.S. nonprofits through federal contracts. How nonprofits obtain these contracts and the extent of federal funding is often obscured. During the 2016 election, some nonprofits intensified political activities to gain more financial support, revealing the depth of government involvement.
Power and Influence Safeguards: Consider appointing an independent body to ensure missions remain true, preventing the undue influence of a few.
Outcome Accountability: While IRS Form 990s offer some insight, they're not universally required or easily understood. We need a mechanism to clearly show how nonprofits are performing, beyond platforms like Charity Navigator, to verify if they're truly accomplishing their missions.
Expand the Role of the Generosity Commission: Move beyond just tracking giving rates to evaluating the entire philanthropy framework in America, questioning whether it serves the public interest, and involving a diverse group beyond just the fundraising sector.
High-Level Federal Committee for Oversight: With IRS and FEC regulations in place, there's still a lack of clear, dedicated oversight for philanthropy. This often results in philanthropy becoming politically charged.
Tax Policy on Endowments: Following JD Vance’s initiative, consider increasing the tax rate on the net investment income of large university endowments, as the focus in education often drifts from learning to other agendas. Tax policy could be a way to ensure that nonprofits stay true to their stated missions.
Strengthen Attorney General’s Oversight: Cases like The Women’s Cancer Fund, where millions were misappropriated for years before action, show the need for more proactive and expanded AG oversight to catch and stop such misconduct early.
Routinely Reevaluate Tax-Exempt Status of all NonProfits. With over 1.5 million tax-exempt entities, it's crucial to assess whether each genuinely deserves this status.
Uniform Impact Reporting: Require all nonprofits to produce standardized reports on their impact, ensuring clarity and comparability.
Supporter Participation in Governance: Create mechanisms for Joe Public to have a say in governance, similar to corporate shareholders. We are all stakeholders in nonprofits.
The role of philanthropy was never meant to be an industry or sector unto itself but an aid to government, stepping in where government could not—from pioneering social innovations to filling service gaps and providing community-based solutions. This moment—Trump’s second term, against all odds—presents our chance to realign philanthropy with its original intent, ensuring it complements rather than competes with government efforts to serve the public good. Philanthropic organizations must be accountable to the public, operate with integrity, transparency, and a commitment to serving the public good—always, regardless of the political climate.
