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charity
Instead of Charity, Peter Thiel Told Elon Musk to Use Billions for Right-Wing Crusade Against 'Antichrist'
Thiel also accused environmental activist Greta Thunberg of being one of the Antichrist's "legionnaires."
Oct 10, 2025
Right-wing billionaire Peter Thiel recently told an audience that he pushed Tesla CEO and fellow billionaire Elon Musk not to give money to charity and instead horde it so it could be used to battle a future "Antichrist."
According to a Thursday Reuters report, Thiel told attendees of closed-door event in San Francisco last month that he pressed Musk to rescind his commitment to the Giving Pledge, the charitable campaign cofounded by Microsoft cofounder Bill Gates that asks signatories to leave a majority of their wealth to a charity of their choosing.
Thiel said he warned Musk that his wealth was likely to end up going "to left-wing nonprofits that will be chosen by Bill Gates" and that his fortune would be better served to fight against a potential Antichrist figure that might emerge. Musk appeared receptive to these concerns, Thiel added.
Investigations have found that while Musk has pledged donations to charities and has donated money to charitable organizations, the funds have often either benefited his own interests or have not been properly distributed. His philanthropic group, the Musk Foundation, failed to donate the legally required amount to qualify as a charitable foundation last year for the third consecutive year.
He pledged nearly $6 billion worth of Tesla shares—just 2% of his net worth at the time—to the United Nations in 2021 to help feed 42 million people who were at risk of starvation for a year, but instead sent the money to his own foundation.
As Reuters noted, the Antichrist is a figure prophesied in the Christian Bible, and Thiel personally believes that this figure will emerge to "create a one-world government on the promise of something like stopping nuclear, AI, or climate-induced disaster."
The Washington Post, which along with Reuters got a transcript of Thiel's lectures on the Antichrist, added some more context to Thiel's personal conception of the Antichrist in a Thursday report.
Specifically, the Post reported that Thiel told his audience that environmental activist Greta Thunberg and artificial intelligence critic Eliezer Yudkowsky were "legionnaires of the Antichrist."
"In the 17th, 18th century, the Antichrist would have been a Dr. Strangelove, a scientist who did all this sort of evil crazy science,” Thiel said. "In the 21st century, the Antichrist is a Luddite who wants to stop all science. It’s someone like Greta or Eliezer."
The Post also reports that Thiel complained during his lecture that he's had a much harder time in recent years avoiding paying taxes.
“It’s become quite difficult to hide one’s money,” he said. “An incredible machinery of tax treaties, financial surveillance, and sanctions architecture has been constructed.”
Thiel, a cofounder of digital payment platform PayPal, has long been an associate of both Musk and Vice President JD Vance, whose 2022 US Senate campaign he generously funded.
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Real-Life Scrooges Are Hoarding Charitable Donations in Foundations and Funds
Current rules enable wealthy donors to bank their tax break immediately, but the donated funds may remain sidelined for decades.
Dec 05, 2024
For as long as we can remember, the end of the calendar year has marked the start of America’s giving season.
The holidays that light up our darkest months also invite us to celebrate (and practice!) generosity. Food banks, youth groups, arts and civic organizations, and community service programs heavily depend on the support they receive in November and December.
Year-end giving is big for tax purposes, but many people donate without regard to whether they’ll get a deduction. In fact, fewer than 10% of donors claim a tax deduction for charitable giving.
So, big donors: You want a tax break? Make sure the money gets to a working charity—and fast.
The super-wealthy, who do take advantage of itemizing their tax returns, give differently. They give more to large hospitals and universities, where you can get your name on a building. That kind of giving can be valuable too.
But a less visible difference is crucial to recognize.
Increasingly, wealthy donors are parking money in entities they control, like private foundations and donor advised funds (DAFs). These intermediaries then, in theory, donate money to working charities.
But private foundations are only required to “payout” 5% of their assets a year to these other charities. And DAFs have no requirement to payout at all. So wealthy donors bank their tax break immediately, but the donated funds may remain sidelined for decades.
According to a new report we co-authored, Gilded Giving 2024: Saving Philanthropy from Wall Street, over 35% of all charitable donations now go to one of these two intermediaries.
There’s now $1.7 trillion parked in private foundations and DAFs—money that could be flowing to working charities in a timely way to solve problems. We estimate that by 2028, half of all donations will go to private foundations and DAFs.
As wealth has concentrated in fewer hands over the last four decades, so has this kind of dubiously “charitable” giving—a trend we call “top-heavy philanthropy.” And it’s increasingly profitable for financial advisers to the ultra rich.
Wall Street financiers promote DAFs as a way for donors to receive immediate tax reductions in the year they give, but then they sit on those funds and collect wealth management fees. The financiers have no financial incentive to ever see the money go to a mental health center, food bank, community theater, or other working charity. It’s more profitable for them to keep assets under management.
The rest of us subsidize this system. For every dollar a billionaire donates to charity, including to their own foundation or DAF, the rest of us chip in up to 74 cents in the form of lost tax revenue.
So how did we get a charity system that works for multi-millionaire donors and wealth managers but not for nonprofit charities, small donors, and the taxpaying public? In part, it’s because lobbyists for the financial industry and DAF sponsors fight vigorously against any change.
But a growing coalition of donors, nonprofit charities, and people who care about tax fairness are pushing back. They point out that lawmakers could easily fix the rules to increase the flow of charitable funding, increase transparency, and shut down the tax avoidance and self-dealing practices currently corrupting philanthropy.
The message is getting across. A 2024 Ipsos poll found that 71% of respondents believe Congress should raise the annual payout rate for private foundations and require the same for DAFs. Across the political spectrum, a clear majority of Americans believe if a donor gets a tax break, they should move the money in a timely way to a working charity.
So, big donors: You want a tax break? Make sure the money gets to a working charity—and fast. You want other taxpayers to subsidize your giving preferences? Tell us where the money’s going.
Don’t like these rules? Then don’t ask the rest of us to subsidize it. Let’s make sure the season of giving actually centers on giving, not hoarding.
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Simple Charity Reforms Could Unlock Hundreds of Billions for Nonprofit Sector
An estimated $1.7 trillion in donations, ostensibly earmarked for philanthropy, are currently languishing in private foundations and donor-advised funds—while charities like Feeding America and Habitat for Humanity are under-resourced.
Aug 09, 2024
Thanks to outdated charity tax laws, the U.S. is missing out on hundreds of billions of dollars that could flow toward housing and food security, health research, education, advocacy, and other crucial nonprofit efforts aimed at uplifting the common good—but simple reforms could unlock some of the extreme wealth that is currently "warehoused" in private foundations and donor-advised funds.
This is according to a new Institute for Policy Studies analysis that shows charitable groups currently hold an estimated $1.7 trillion in donations that are "ostensibly earmarked for philanthropy," but are able to "languish in go-between funds" while working charities remain under-resourced.
The foundations and donor-advised funds (DAFs) are able to collect tax breaks while sitting on billions of dollars thanks to provisions in the Tax Reform Act of 1969 that haven't been updated in decades, wrote IPS associate fellow Helen Flannery and associate director of charity reform initiatives Bella DeVaan at Inequality.org, a project of the organization.
"Initially, in the Tax Reform Act of 1969, private foundations were mandated to give away 6 percent of their wealth or the annual net growth from their investments: Whichever was higher," wrote Flannery and DeVaan. "Foundations' tax benefits wouldn't provide license for funds to just grow forever and ever, and they were to be consistently responsive to shifting economic reality. A decade of revisions to payout requirements reflected those principles and eventually created our flat 5% mandate. But that 5% is overdue for re-evaluation, and our elected representatives have fallen asleep at the wheel."
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric."
While the nation's largest foundations give charitable donations at a rate of about 5%, "their gains in the market have averaged 9% over the last five years," they explained.
In other words, said Flannery and DeVaan, the funds "are growing faster than the rate at which they give" while donations to working charities like Habitat for Humanity, United Way, and Feeding America fall behind.
The wealth of DAFs has skyrocketed by 411% in the last decade, with the funds stockpiling an estimated $230 billion in assets in 2023.
IPS noted that billions of dollars in DAF gifts have been directed as dark money contributions—whose donors "might well have second thoughts" if tax laws were reformed to require both boosted payouts and more transparency.
In its policy brief, IPS proposes reforms that would:
- Increase the minimum payout rate requirement to 10% for foundations with assets of $50 million or more, and increase it to 7% for all other foundations;
- Exclude private foundation overhead expenses above 1% of assets from counting towards payout;
- Exclude grants from private foundations to DAFs from counting towards payout;
- Require DAFs to pay out funds within five years of receipt (and provide individual account-level transparency);
- Exclude grants from DAFs to other DAFs from counting toward payout; and
- Generate excise tax revenue from intermediaries that don't meet the new requirements.
The new rules would generate more than $110 billion in additional funding for working charities each year, as well as $339 billion in donations over three years.
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric," wrote Flannery and DeVaan, "or organizations that could and should be with strengthened access to funding."
IPS released the analysis as legislators prepare to overhaul the tax code in 2025.
"We're hopeful that this can be a watershed moment for charity reform akin to 1969," wrote Flannery and DeVaan, along with IPS program director Chuck Collins.
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Beacons of Civilization: On Kindness in a Small Town
We fill up the soul of communities by giving what we can. It's not charity, but simply being a good neighbor.
Dec 07, 2023
Civilization has been described as “the slow process of learning to be kind.” This past summer and early fall, while I stood with peace and justice companions on the Greenfield Commons in Greenfield Massachusetts, I witnessed a pervasive culture of kindness.
Karen Boyden, with the assistance of some family and friends, folded and laid out free shoes and summer clothes and, later, fall sweaters, pants and heavier shoes on a table and blanket on the Commons. A sign welcomed all passing by to help themselves to “Dippy’s Closet.” Some who chose clothing and shoes, with the advice of friends, left with smiles; others were discreet, not wanting to draw attention to themselves.
Dippy's Closet, I learned from Karen, is a grassroots volunteer driven outreach that provides free clothing for men, women, and children with the specific goal “to attract homeless folks and individual and families who are struggling financially to purchase quality clothing.” She was first inspired to share her father's wardrobe when he unexpectedly passed in Sept of 2022; and she began donating his wardrobe to men living in a recovery home in Greenfield. “It was a great way to rechannel the pain of losing my dad into helping others,” especially seeing “so many people living on the streets of Greenfield.”
Karen estimates that, in their 9 outreaches on the Commons from June to early November, about 50 people have visited weekly and left with clothing. She has widened the circle of donors, including co-workers at the Valley Medical Group Easthampton and the Giving Circle Thrift Shop of South Deerfield.
Asked what this act of kindness for other fellow humans means for her, she replied “I want to show the folks who are struggling that we do notice, that we do care and they are valued. It is my hope that our little clothing mission might inspire others to serve the homeless. It is not that hard and so incredibly rewarding....”
Karen mentioned being inspired by the Stone Soup Café, seeing their efforts to serve folks in need. And I noticed that some who stopped by Pippy’s Closet then headed to Stone Soup Café, one long block away, for a gourmet, healthy lunch, offered each Saturday from noon to 1:30.
This pay-what-you can community cafe, whose intent is “to build a culture of belonging,” has grown since its opening in 2010 from serving 25 meals to 600 meals each week. Their Community Free Store, an emergency curbside food pantry, was created at the prompting of their guests during the onset of the pandemic. It provides between 80-110 households with groceries, produce and personal care items at no charge to them. In 2022 Stone Soup created a tuition-free 12-week Culinary Institute program career training to people seeking a new career path, especially those who are seeking employment after a period of incarceration or recovery from addiction. Those accepted into the program leave with a Food Handlers License, a ServSafe Certificate in Kitchen Management, job skills, practicum experience, and references for securing work in the food sector of Franklin County.
Explaining her intense commitment, co-director and chef, Kirsten Levitt said; “My life’s passion is to service…humans are hardwired for service.” Head of Volunteers, Sarah Hilliard, is motivated by “a lot of love. No human being should be without food.”
Nearby in the Second Congregational Church, Gloria Matlock and volunteer tutors work with up to 20 children, to augment their chances to thrive as they grow in the innovative Twice As Smart program founded by Matlock in 2018. Her lofty four-fold mission is to:
- Provide after school academic instruction to augment children’s confidence in reading, writing, and mathematics leading to a love of learning.
- Cultivate social and listening skills.
- Encourage each child to develop their unique “voice” and to find self-expression through art and music.
- Expose children to resources, role models, and experiences that expand their educational and career possibilities.
Some Twice As Smart students are immigrants and many live in public housing.
This model of holistic education is clearing the students’ obstacle-laden path to higher education, jobs and a deep sense of self, a cause to which artist, musician, and former teacher Gloria Matlock has committed her life.
Are these programs using charity to remedy social injustice, as some might claim? Jane Addams would disagree. In 1892, this eminent social reformer explained that Hull House, her settlement house in a poor precinct of Chicago, was not a charity. Its purpose — and, for Addams, a central obligation of being a citizen — was to help America’s less fortunate make the most of themselves. “To call this effort [charity]…is to underestimate the duties of good citizenship.”
I would add that, with one-half of Americans either poor or a medical emergency away from economic ruin, these programs in our midst and the thousands like them across our country are beacons of civilization in a nation that pumps the world full of military weapons, while its soul empties from within.
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It’s Time to Move the Money out of Donor-Advised Funds
Because DAFs have no payout requirement, the money often fails to move in a timely way to charities addressing urgent needs.
Sep 09, 2023
Last year, we wrote about how donor-advised funds, or DAFs, had become the top recipients of charitable giving in the United States. At the time, we were astounded to discover that DAF sponsors made up 6 of the top 10 and 9 of the top 20 most successful public-charity fundraisers in the country.
We’ve updated the data for 2021—the most recent year for which complete data is available—and the picture has only gotten more stark. Donor-advised fund sponsors now make up 7 of the top 10 and 11 of the top 20 public charities in the United States.
Public charities are nonprofits that rely on a broad base of donors for their revenue —as opposed to private foundations, which are usually created and supported by just one or two major donors.
In contrast to private foundations, DAF sponsors qualify as public charities, and so receive the same preferential tax treatment as working charities.
As we have reported before, DAFs are growing explosively. The assets held in U.S. DAFs have grown by 513% over the past 10 years—rocketing from $38 billion in 2011 to $234 billion in 2021.
And DAFs now rake in 22% of all U.S. individual charitable giving.
Donors can claim substantial charitable tax benefits for their contributions to DAFs, but, because DAFs have no payout requirement, the money often fails to move in a timely way to charities addressing urgent needs.
Through the charitable tax deduction, taxpayers subsidize contributions to DAFs by up to 74 cents on the dollar.
Of particular concern are DAF sponsors that are affiliated with for-profit Wall Street financial corporations. As we have documented, these commercial DAFs provide enormous publicly subsidized tax benefits to their high-rolling contributors while actively encouraging the warehousing of charitable wealth.
And commercial DAFs have been growing explosively. The Fidelity Charitable Gift Fund, for example, has been the most successful charitable fundraiser in the country for the past six years.
In 2021, Fidelity extended its lead by pulling in $15 billion—more than $11 billion more than the top working nonprofit, Feeding America.
We counted the Silicon Valley Community Foundation and the Chicago Community Trust as DAF sponsors because contributions to DAFs made up 93% and 97%, respectively, of their total incoming contributions in 2021.
Some of the operating nonprofits on this list—such as the United Way and Stanford University—sponsor DAF programs as well, but we did not categorize them as sponsors because their DAF programs are relatively tiny compared to their other fundraising.
It is also worth noting that DAFs may have actually done even better relative to working charities than our ranking shows. In previous years, the Chronicle of Philanthropy has made it easy for everyone to evaluate cash contributions by publishing well-researched lists of top-earning non-DAF “cause-driven” charities, but they did not do that in 2021.
So we compiled our current rankings by pulling contribution information from the tax returns of the largest DAF sponsors in the U.S., and then combining that with lists of donations to operating charities from two separate sources: Bloomberg’s ranking of the top-fundraising nonprofit universities and Forbes’ list of the top-fundraising non-university charities.
The Chronicle’s lists only included cash donations, however, while Forbes’ list includes both cash and noncash donations—and that can inflate revenue numbers, particularly for relief organizations. If Forbes’ list had only included cash donations to Feeding America, for example, they would have slipped out of the top 20.
Through the charitable tax deduction, taxpayers subsidize contributions to DAFs by up to 74 cents on the dollar.
This gives us all an interest in making sure that the money stored in DAFs is actually used for the greater good, rather than serving as a tax avoidance vehicle for the wealthy or lining the pockets of commercial money managers.
It’s time to move the money out of DAFs—and we’ve outlined a number of reforms that would make this happen.
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Apple Should Be a Leader in Charitable Giving
Apple's financial performance is unrivaled among American companies, but it's very far from being a leader in corporate giving, as measured by the ratios of giving to pre-tax profits and stock buybacks.
Apr 30, 2023
Here is a letter that Steve Clifford and I sent to the CEO Tim Cook of Apple corporation, whose percentage of charitable giving relative to its taxable income is astoundingly low as compared to other corporations noted below. Apple should increase its charitable giving.
April 24, 2023
Tim Cook, CEO
Apple, Inc.
One Apple Park Way
Cupertino, CA 95014
Dear Tim Cook,
We are writing you regarding Apple’s charitable giving.
Your predecessor reportedly believed that he could do more for the world by making great products than by donating to charitable causes. Apple’s charitable giving has increased substantially since you became CEO, indicating that you don’t share this opinion.
Apple does not report to shareholders (or anyone else) total charitable giving. However, from various press releases, we understand that under your leadership, Apple has:
- Initiated an Employee Matching Giving program that has raised over $880 million since 2011 for almost 44,000 organizations. As this is a 50/50 matching program, we assume Apple contributed $440 million.
- Supported (RED) in its fight against AIDS. We read that in 2010 Apple donated $50 million to (RED) and $50 million to Stanford University Hospitals for the same cause.
- Launched, in January 2021, a Racial Equity and Justice Initiative in the United States with the goal of “building a more just, more equitable world.” Apple made an initial commitment of $100 million, and seven months later, added an additional $30 million.
- Pledged, in November 2019, $2.5 billion to confront California’s housing crisis. By July 2021, $1 billion of this pledge had been deployed. While these funds seem to have been invested in housing funds, they might not properly count as charity. Nonetheless, they are an important and needed action.
Given the philanthropic path you have chosen, we share two observations:
First, it is impossible to accurately calculate how much Apple has donated to charity. One of us is a shareholder, and we both would like to see Apple report its charitable giving in its annual report. Since you presumably are proud of what Apple has accomplished in this endeavor, you should be proud to disclose it.
Second, we urge Apple to become a leader in charitable giving. Apple is viewed by many as the iconic American company with its products, innovation, and brand loyalty. In addition, its financial performance is unrivaled. However, despite its progress since 2011, Apple is very far from being a leader in corporate giving, as measured by the ratios of giving to pre-tax profits and stock buybacks.
The ten most charitable companies among the largest 75 U.S. public companies ranked by market value, donated an average of 1.3% of pre-tax income to charity. * We estimate that Apple’s charitable giving in recent years was less than 0.1% of pre-tax profits. For every $100 in pre-tax profits, Apple donated 10 cents.
We estimate also that Apple donated 10 cents for every $100 spent on stock buybacks. Between 2017 and 2022 Apple spent $427 billion on stock buybacks, again roughly 1,000 times what is donated to charity. (To emphasize the enormity of this amount, a person living 427 billion seconds would have been born in 11.417 B.C.E, centuries before the invention of agriculture.)
As you know, the tax laws allow a corporation to deduct up to 10% of its taxable income for charitable contributions. We request a discussion of these suggestions with you or with any high-level Apple representative.
Sincerely yours,
Steve Clifford
Former CEO and Author of The CEO Pay Machine
P.O. Box 19312
Washington, DC 20036
CC: Apple’s Board of Directors
Interested Parties
Readers can email their reactions to Apple at media.help@apple.com or call 408-996-1010.
| Market Cap | Charitable Giving | |||
| Gilead Sciences | 74 | 2.9% | ||
| Goldman Sachs Group | 69 | 2.5% | ||
| Pfizer | 26 | 1.7% | ||
| Johnson & Johnson | 9 | 1.3% | ||
| Exxon Mobile | 11 | 1.1% | ||
| WellsFargo | 49 | 1.0% | ||
| Alphabet (Google) | 4 | 0.9% | ||
| JPMorgan Chase | 14 | 0.7% | ||
| Microsoft | 2 | 0.7% | ||
| Bank of America | 27 | 0.6% | ||
| Average | 1.3% |
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The Devil's Deal of Tax-Deductible Status
Seeking the 501(c)(3) label limits the scope of individual giving and collective action.
Apr 20, 2023
We've just passed through tax time again. (Unless, like me, you live in one of several states ravaged by recent extreme weather events brought on by climate change. In that case, you can wait until October.) It's also that moment when the War Resisters League—slogan: "If you work for peace, stop paying for war"—publishes its invaluable annual "Where Your Income Tax Money Really Goes" pie chart and publicizes a series of Tax Day events nationwide.
For many of the rest of us, it's time to pat ourselves on the back for the charitable donations we made to tax-deductible organizations in 2022. Time to pat ourselves on the back for being clever and generous enough to "do well by doing good," right? Time, perhaps, to wonder why, even when we give to organizations seeking radical change, the IRS still rewards us with a tax deduction. Do the feds really support organized opposition to, for example, the military-industrial complex? Or is there more to the story of what my students sometimes refer to as the "nonprofit-industrial complex?"
What's That Tax Deduction Really Worth?
For many decades, people who give away money have been schooled to seek a tax deduction in return. We're encouraged to be suspicious of organizations that don't qualify under section 501(c)(3) of the U.S. Tax Code, which offers a bonus for our generosity. We're told that the federal government will bless any organization that's really doing something useful with the magic wand of that coveted tax-deductible status.
Can't charitable donations save us thousands of tax dollars? Doesn't that make insisting on such a tax deduction the grown-up thing to do?
This belief that charitable write-offs also pay off is based on a misunderstanding about how such tax deductions work.
Not, as it turns out, for most people. This belief that charitable write-offs also pay off is based on a misunderstanding about how such tax deductions work. Suppose you give a qualifying charity $100. That will reduce your tax bill by the same amount, right? Alas, no. That $100-dollar gift will reduce the amount of your income that you pay taxes on by half the amount of your gift, or $50. This means that if you, like most working folks, pay federal taxes at an effective rate of less than 15%, the amount you save on taxes by giving $100 is less than 15% of $50, or a whopping $7.50—the price of a couple of fancy coffee drinks.
But giving to get a tax deduction is even less financially advantageous than that. Suppose you're part of a married couple that earned $120,000 in 2022. Lucky you. If you were taxed for every penny of that amount, your federal income tax bill would be $17,634, an effective tax rate of 14.7%. ( Look here to see how it works.)
What if you decide to tithe, donating 10% of that $120,000, or $12,000, to qualifying charities? Such giving would reduce your taxable income by $6,000, bringing it down to $114,000. Your federal income tax bill would then come down to $16,314, saving you about $1,320. Not bad, eh?
But here's the kicker: Suppose instead that you decide not to "itemize"—that is, list all your contributions (and other expenditures like that great middle-class welfare plan, the mortgage interest tax deduction)? Instead, you opt for the "standard deduction." For a married couple filing together, that will reduce your taxable income by $25,900, bringing that same tax bill to a mere $11,396, saving you about $5,700 in taxes without your giving away a penny. To get the same tax write-off by making contributions, you'd have to donate twice the standard deduction, or $51,800.
So am I suggesting that we shouldn't give money to non-profits, because we often don't really benefit from the tax deduction? Absolutely not. I'm saying that when we donate, we shouldn't do it because of the tax deduction. We should do it, if we can, because it supports activities crucial to our own and the long-term survival and even flourishing of so many other people. This is true, whether you're helping a relative pay the rent this month or contributing to a candidate for the Wisconsin supreme court. Neither of those gifts will garner you a penny in tax deductions, but one will keep someone you love off the street and the other would have helped ensure that women in Wisconsin could still get an abortion when they needed one.
Who loses out when we refuse to give without a tax deduction? To begin with, we do, because we've placed an artificial limit on the kinds of campaigns, organizations, and people we allow ourselves to donate to. We've automatically excluded, for instance, gifts to political parties and candidates. No organization offering tax deductions can support or oppose any candidate for elected office. Of course, elected officials aren't the only people in a position to affect our lives, but four years under Donald Trump and a couple under Joe Biden should have reminded us that they can do a whole lot of harm, or substantial good.
Making Sense of the Foundation-Non-Profit Complex
The current system of tax deductions creates other losers as well. The halo that surrounds 501(c)(3) status also constrains recipient non-profit organizations. Those that agree to the IRS rules are making a not-always advantageous deal with the devil. That tax-deductible status comes with some hefty limits:
- No electioneering (campaigning for or against candidates)
- No activities outside the "charitable and educational purpose" described in the organization's original application for such status
- Organizations may not be created for the purpose of violating laws, meaning that advocating for civil disobedience, for example, or tax resistance can't be part of an organization's official purpose.
Failure to comply with the rules can get an organization's tax-exempt status yanked. One result: organizations begin to censor themselves, sometimes restricting their activities even more than the law requires. For example, while 501(c)(3)s aren't allowed to get involved in election campaigns for specific candidates, depending on their total annual income, they are allowed to use as much as 20% of their spending each year to influence legislation or government policies.
[O]rganizations begin to censor themselves, sometimes restricting their activities even more than the law requires.
That means they can work directly for or against ballot initiatives and spend money to lobby government officials. They can, for example, employ paid lobbyists or rent buses to bring people to a state capitol or Congress to talk to their representatives about a particular issue. Many smaller non-profits may not even know this and so may limit their scope of action even more severely than the law requires for fear of losing that precious status.
The third restriction (no illegal purposes) has ramifications for organizations that may want to fund or be involved with actions that are nonviolent but illegal, like certain kinds of civil disobedience. In 1975, for instance, the IRS denied 501(c)(3) status to an antiwar organization whose stated charitable purpose was training people to participate in nonviolent civil disobedience. Does that mean that no 501(c)(3) outfit can engage in civil disobedience? No, but it does mean that your entire stated charitable purpose cannot be law-breaking. Fear of losing their status, whether well-founded or not, keeps many organizations from even considering participation in entire realms of political action.
Given these restrictions, why would organizations seeking radical change to existing racial, gender, or economic structures want to go the 501(c)(3) route? What makes that status so valuable for a non-profit organization? We've already seen that individual donors shy away from giving when they don't get a tax deduction. But for many organizations there's an even more important source of funds that also requires the 501(c)(3) tag: foundation grants. Although individuals give far more money overall than foundations, many organizations depend on large chunks of money from foundations, which in most cases will only make grants to 501(c)(3) groups.
But accepting foundation funding is another Faustian bargain for several reasons:
- Foundation funding can deform your program: It can entice you to change your focus and your activities to attract grant money. You're no longer choosing your own priorities. Instead, you find yourself tailoring what you do to what foundations want to support.
Say yours is a racial-justice organization working for serious police reform. Funding for your area of work is scarce, but a whole tranche of funding for after-school youth programs suddenly becomes available. Now, there may even be a place for such programs addressing young people in your overall political strategy. But if you need the money to keep the doors open, you may be tempted to refocus large parts of your program, not because you think after-school youth activities are the best vehicle for police reform, but because that's where the money is.
- Foundations can be fickle: They are easily distracted by the new and shiny. One moment, they may be all about "sustainable communities," which might be a perfect fit for your organization's efforts to address the problems of renters in your city. So you spend three years building the coalitions and doing the public contact work necessary to put a rent-stabilization ordinance on the ballot. At that very moment, however, the money dries up, because funders are now focusing on public transit instead. Just when you most need the support to help win the next election, your benefactors have wandered off in pursuit of something different.
- Foundations can rearrange an entire non-profit "ecosystem:" They may, for example, look at organizations in various states working on racial justice in public education and decide that such a movement needs a national "collaboration" (a foundational buzzword). So a coordinating council is created and funded, requiring that individual organizations participate as a condition for receiving grant money. That means they'll have to divert staff time for planning for national meetings, Zoom calls, and conferences. Such a coalition could, of course, supercharge the work of individual organizations, but it might just as easily distract them from crucial local work while involving them in controversies they'd rather avoid.
- Foundations have no incentive to support fundamental economic change: Where do foundations come from? The majority, even in the liberal and progressive world, are private, often funded by a single family (think "Rockefeller") or company (think "Ford" or "Kellogg"). Creating such philanthropic vehicles provides real tax advantages to such families and companies. It also gives them a very respectable way of influencing public policy. Ultimately, these foundations are not going to support serious challenges to the capitalist system, because that system guarantees the continued wealth of their founders.
Foundations and "Movement Capture"
I teach at a college, and, over the years, many of my justice-minded students have expressed a desire to change the world by founding their own non-profit organizations. In their minds and based on the models they see in their worthy community-engaged learning classes, non-profits are the sine qua non of social change and social movements. For most of them, working for social justice means working for a non-profit.
It wasn't always this way. Before the 1954 U.S. tax code created the 501(c)(3) designation, charities existed, but mostly to provide direct aid to people in need. They certainly weren't the main political vehicles for social change. In fact, many people organizing to improve their lives were far more likely to turn to unions, not only to improve wages and working conditions, but to address other issues in their lives like housing. It's probably no accident that the rise of the non-profit sector in the second half of the twentieth century coincided with the reduced power of unions.
In fact, many people organizing to improve their lives were far more likely to turn to unions, not only to improve wages and working conditions, but to address other issues in their lives like housing. It's probably no accident that the rise of the non-profit sector in the second half of the twentieth century coincided with the reduced power of unions.
It was during the civil rights movement of the 1950s and 1960s that modern non-profits and foundations first played a significant role in attempts to bring about structural change in this country, even while also ensuring that such change, in the end, would be limited in nature. The giant among those philanthropic organizations was then the Ford Foundation, the largest collection of charitable wealth the world had ever seen.
A bit late to the civil rights fight, Ford turned its attention in that direction toward the end of the 1960s, after the passage of the Civil Rights and Voting Rights Acts. Under the leadership of McGeorge Bundy, a Cold War liberal and Vietnam War architect, Ford began to make huge contributions in the field of civil rights, mainly to the venerable National Urban League, but also to the NAACP. At the same time, it sought to reduce more militant activities, refusing, for example, to fund Martin Luther King's planned Poor People's March on Washington, scheduled for 1968. At the time when the Black Power movement was growing, Ford used its inaugural funding of Black organizations to moderate the influence of more radical voices.
University of Washington scholar Megan Ming Francis has labeled such attempts to use foundation money to control and channel a powerful social movement as "movement capture." In a 2019 paper, she describes an early example of this process. During the 1920s and 1930s, she writes, funders, including the white-run Garland Foundation, used "their financial leverage to redirect the NAACP's agenda away from the issue of racial violence to a focus on education at a critical juncture in the civil rights movement." A decades-long fight for a federal anti-lynching law never succeeded.
Who knows what might have happened had the most powerful civil rights organization of the time kept its focus on lynching and the institutionalized state torture of Black people in the early twentieth century? Maybe police would no longer continue to routinely kill people of color with such impunity in this century.
An extract from the Ford Foundation's 1967 annual report indicates that the tradition of squelching popular uprisings and redirecting the focus of activists lived on at Ford:
"Staff attention has been turned to the more militant civil rights organizations, specifically the Congress Of Racial Equality (CORE) and the Southern Christian Leadership Conference (SCLC). Our interest in both is in seeing whether we may be of help to them in fashioning rational, goal-oriented programs of constructive action." [Emphasis added.]
In other words, use Ford money to get the militants to pivot to activities their "betters" then considered "constructive action."
What's a Donor to Do?
The view of funders and non-profits I've offered here doesn't fit either the right-wing understanding of charity as an alternative to government action (former President George H.W. Bush's "thousand points of light") or the liberal belief in the power of foundation-funded organizations to change the world. Unfortunately, I have no prescription for how or where to give your money away this tax season, or indeed during the rest of the year. I can only suggest that you do give. And that whatever any of us give, whether it be money, time, or attention, we do it expecting the only return that really matters: taking part in the larger movements for justice and mercy in all their forms.
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Corporations Are the Modern-Day Scrooges
Coca-Cola and Amazon among giants that hand over a fraction of their profits as part of promotional stunts.
Dec 30, 2022
Corporate Scrooges in the UK have boasted about donating as little as 0.007% of their cash to charities at Christmas, analysis by openDemocracy has revealed.
Amazon and Coca-Cola are among the giants that have been accused of "giving pennies from their back pocket" to good causes as part of promotional stunts over the holiday period.
This year, Coca-Cola announced that it would donate the equivalent of a meal to charity for every person who visits its Christmas truck tour in the UK this year. It's only at the very end of its announcement that the world's richest beverage company explains it will give a maximum of just £25,000 to the charity Fairshare, which redistributes surplus food to the hungry.
According to Fairshare, £25,000 is enough to supply 100,000 meals. But the donation amounts to less than 0.01% of the £259.9m profit Coca-Cola made in the UK—the equivalent of a millionaire donating three £30 turkeys to charity. By contrast, Coca-Cola handed £440m in dividends to shareholders in 2021, dipping into its reserves to do so.
BAE Systems, also among the 30 biggest companies in the UK, donated £150,000 to food banks last Christmas—just 0.007% of its £2.3bn profit for 2021. The arms manufacturer said it gave £11m overall to charity in 2021. By comparison, it handed out £1.1bn to shareholders in dividends and share buybacks.
British Gas owner Centrica—among the top 100 largest UK companies—also gave £250,000 to food bank operator Trussell Trust last Christmas. The donation was equivalent to 0.03% of its profits in 2021—which stood at £948m, double what it made the previous year. The charity says the number of people using food banks rose by 40% between April and September this year.
"These companies' charitable giving is too small even to call it reputation washing. This seems more like the corporate equivalent of using a drop of spit to clean something off the side of your mouth," said Alex Cobham, chief executive of the Tax Justice Network.
"The UK could today simply allow the Treasury to use existing legislation to make multinationals like Amazon publish their country-by-country reporting data. But both as chancellor and now as prime minister, Rishi Sunak has blocked this measure—meaning companies can continue to keep their questionable tax behaviour in the shadows, while they claim the plaudits for trivial charitable giving."
Amazon, meanwhile—one of the world's richest companies—donated an estimated £256,000 to charity in the UK last Christmas.
In a blog post, the company said it gave £120,000, split between 120 local charities nominated by employees: £50,000 to children's charity Barnardo's, £25,000 each to homeless charity Depaul and family support charity Home-Start, and £10,000 to rapper Stormzy's #MerkyFoundation.
Amazon UK also said it also donated £500 to "every local food bank" near its 24 warehouses. openDemocracy estimates this could amount to a £26,000 donation given there are 52 food banks run by the Trussell Trust within five miles of Amazon's 24 sites.
Amazon UK Services, the warehouse and logistics arm of its business, made profits of £204m before tax in the UK last year, according to accounts filed at Companies House. The corporation's Christmas donations in the UK would amount to 0.13% of this income.
But Amazon's total profits in the UK were likely much higher than this figure. The company reported that revenue for all its business in the UK—including retail and cloud computing services not included in the £204m figure—was £23.2bn in 2021. It would not reveal how much profit it made from this.
Amazon paid no corporation tax in the UK that year, thanks to the "super-deduction" scheme for businesses that invest in infrastructure that was introduced the same year by the then chancellor, Rishi Sunak, according to research from the Fair Tax Foundation.
Other companies have applauded their employees' personal generosity while seemingly giving nothing themselves. For the last two years, staff working at Jaguar Land Rover have donated £5,000 of their own money to charity and tens of thousands of grocery items to food banks—but, asked if the company itself had contributed, a spokesperson told openDemocracy they were only aware of the donations given by employees.
"Big businesses like to pretend that, left to their own devices, they will do the right thing. These figures show clearly how hollow those claims are," said Nick Dearden, director of campaign group Global Justice Now.
"In a period of historically low corporate taxation, these giants will do anything they possibly can to further push their taxes down, as well as shift their costs onto the public sector and drive down the wages of their employees. The idea that putting a few pennies from their back pocket into the charity tin is going to make up for this is ridiculous.
"Big corporations and the multi-billionaires that run them now have so much more power than the average citizen—even here in the UK. Frankly, you could multiply these paltry charitable donations a thousand times and you'd still get nowhere near the amounts necessary to change this."
Coca-Cola, Centrica, Amazon and BAE did not respond to requests for comment.
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Lo, the Poor Enlightened Billionaire!
Aug 29, 2015
Among the hundreds of billionaires and mega billionaires in the U.S., there are more than several enlightened people upset by our society's problems who could make big improvements.
The next step is breaking down a roadblock of sorts. A prominent, very rich businessman summed it up when he told me: "Ralph, we all know how to make a lot of money, but we don't have a clue as to what to do with it, including me." It is not as if these super-wealthy are contemplating their navels. Many give away lots of money but wonder if their giving is a stopgap. In contrast, others refrain from donating unless they can be assured that their philanthropic investments will likely deliver results.
It helps to distinguish between charity and justice - both noble causes worthy of donations. Charity ministers to the immediate, often desperate needs of vulnerable populations. Charities support soup kitchens and clinics, renovate or build educational buildings, add services for the elderly, provide medicines for the poor here and in developing countries, help local school systems under budget restraints, and quickly respond to tragedies with disaster relief here and abroad. All of these causes are worthwhile (when these services and donations reach the appropriate recipients).
Justice directly confronts the challenge of preventing people from ending up in vulnerable situations. What causes over 15 million children in the U.S. to go to bed hungry each night? Why don't we have universal public health care? Why aren't public colleges and universities tuition-free like high schools in the U.S. and most Western European countries? Why are our public works crumbling and creating unnecessary obstructions for disaster relief (reaching people stranded after hurricanes)?
Will charity ever begin to catch up with the consequences from corruption, self- preserving bureaucracies, man-made environmental damages, and governments indentured to avaricious special interests and concentrated corporate power? Not a chance.
Advocacy promoting justice seeks to prevent the causes of so much misery, institutional harm, poverty, and the loss of human life and potential. Repairing the wreckage of wars places huge demands on charity, and waging peace and negotiating arms control agreements places huge demands on justice.
Last fall, I proposed "Birth-Year Gifts to America," which the very wealthy could jumpstart with other Americans around the country. For example, people born in 1930, 1935, or 1937 would organize to support and endow a self-renewing nonprofit civic institution to improve the quality of life of future generations.
The steel magnate Andrew Carnegie's philanthropy created many organizations, including the Carnegie Institution for Science, the Carnegie Endowment for International Peace, and the Carnegie Corporation of New York (a major foundation dedicated to advancing science). His most memorable gift was funding the establishment of over 2,500 free libraries in as many communities throughout the country. He insisted, however, that the localities provide the land to give themselves a stake. Talk about a legacy!
In my proposal, I suggested twenty-five enduring ideas that could be gifted to our country and cover many needed societal improvements. Birth years for people seventy to ninety years of age have thousands of people of means who, whether they are religious or not, really do not believe that they can take it with them.
You can view the entire list, which may stimulate your birth-year project nationally, regionally, or locally, that advocates for justice through systemic creations or improvements of institutions here. For a copy, write to PO Box 19367, Washington, D.C. 20036.
Bringing together the billionaires who want to get things moving for a weekend roundtable could kickstart a new approach to meaningful and creative philanthropy. We would be pleased to host such a serious historic deliberation to escalate informed wishes into action.
Most progressives express disbelief that the very wealthy would ever support fundamental changes that would shift the power from the hands of the few to the hands of the many and create a much more equitable and prosperous society. We could have a culture that focuses on preventing problems through justice and not just reacting to the disasters and inequality caused by such problems through charity. A cynical view ignores that having the backing of majority public opinion and the financial support of the wealthy can produce positive results. (I strove to detail this potential in my book "Only the Super-Rich Can Save Us!" - a work of realistic political fiction.)
Nearly a century ago, the brilliant philosopher/mathematician Alfred North Whitehead declared, "A great society is a society in which its men of business think greatly of their functions." Today, those heeding the vision of Senator Daniel Webster, who, before the Civil War, said: "Justice, Sir, is the great interest of man on Earth," will surprise their peers by moving from success to significance. They can begin this transition by connecting with advocates with decades-long experience seeking justice under dire conditions, with some success.
There are examples of the wealthy contributing to longstanding progressive improvements in society. Some wealthy philanthropists funded many activities focused on abolishing slavery and obtaining universal suffrage for women. A few rich families provided substantial financial backing for the Civil Rights Movement. In addition, numerous environmental groups today are reaping the benefits of wealthy supporters.
Now, with more wealthy individuals and families than ever,fundingh charity and justice has become more feasible.
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