Charities Must Keep in Mind That Donald Trump Is No Ronald Reagan

Despite the indications that Donald Trump devotes little of his personal wealth to giving, his unexpected victory in the presidential election gives him the potential to exert substantial influence over philanthropy during the next four years. How would he do so? And how should the philanthropic world respond to the election results?

Although Mr. Trump’s campaign dealt more in broad themes and bold promises than in policy details, the outlines of what his administration — and a Republican Congress — might do are clear enough. Less certain is how philanthropy will react, though foundations might consider paying more attention to a portion of American society whose prospects have been declining — a group of voters who turned out to be at the center of this year’s campaign.

One specific commitment made by candidate Trump was to repeal the “Johnson amendment” — the tax-law provision, sponsored by then-Senator Lyndon B. Johnson in the 1950s, that bars charities from participating in federal election campaigns. This restriction has been particularly irksome to Christian evangelical groups, over 80 percent of whose members, according to exit polls, voted for the Republican ticket and helped it carry important swing states like Florida. A bill to eliminate the Johnson amendment was introduced in the current Congress and will certainly be revived in the next one.

But repeal of the Johnson amendment may not actually have much support in Congress. Most charitable organizations — religious or otherwise — do not get involved in election campaigns or even in advocating for legislation. What’s more, if they were allowed to take part, they might find themselves subject to federal election rules requiring public disclosure of their financial supporters, rules that do not currently apply to them. Moreover, generally conservative religious groups would benefit from repeal — but so would many generally liberal groups (including foundations). This universal applicability may make Republican legislators more hesitant to vote for repeal.

In short, while the Trump administration will try to do away with the Johnson amendment, it may not have the votes to succeed.

The Trump campaign also pledged to push for comprehensive tax overhaul. The Republican leadership in Congress already has a blueprint for such change, and the new administration is likely to follow it.

Several of the tax proposals — limiting itemized deductions, eliminating the estate tax, and reducing tax rates for high-income households — would reduce the financial incentives for charitable giving. But analysts differ on how much impact these measures would have, because if they help stimulate economic growth (as supporters hope), they could, at the same time, increase the future income available for giving. We just don’t know.

There may be more immediate impact for philanthropy if new leadership comes to the Internal Revenue Service. Since 2013, when reports surfaced of the IRS targeting “Tea Party” groups that had applied for tax exemptions, the agency and Congress have been locked in almost-continuous oversight hearings and threatened legal actions, which have undermined the moral legitimacy of nonprofits’ principal overseer.

The Trump administration can begin restoring this legitimacy — and thus help repair public confidence in philanthropy — with a thorough housecleaning and the adoption of new procedures for reviewing politically oriented groups seeking tax exemptions.

A number of the policy promises made by the president-elect — more charter schools, help for inner-city neighborhoods, perhaps even an improved alternative to the Affordable Care Act — will probably find favor in portions of the nonprofit world. Other promises — particularly on the environment, energy, and immigration — will undoubtedly encounter lots of opposition. The fate of such ideas will depend on the details and on whether Mr. Trump’s brawling political skills will be as effective in the often byzantine legislative arena as they were on the campaign trail.

Nonprofit groups are already being urged to gear up to defend programs that matter to them. “Work on your advocacy strategies and capacities,” the editors of Nonprofit Quarterly advised on the day after the election. “Be ready to create fluid and active collaborations across identity groups, across causes and fields to protect and advance the health (writ large), prosperity, and voices of the communities we care about.”

This is exactly what the philanthropic world did after Ronald Reagan became president in 1981 and proposed sizable reductions in federal grants for programs that benefit nonprofits.

Independent Sector and other organizations thrived by going into opposition, while scholars built their reputations by publishing studies of the impact of the Reagan budget cuts.

But such a strategy may not be as productive today as it was then. One reason is practical: The size of the federal debt is much higher as a share of the budget, and there is already such low spending on items that aren’t for the military and entitlements that there isn’t much room to maneuver.

More important, although Mr. Trump claims to admire his Republican predecessor, he is no Ronald Reagan.

While Mr. Reagan came to Washington believing that “government was part of the problem,” Mr. Trump — much to the dismay of conservatives — appears prepared to spend more money on “infrastructure” and less on defense and foreign commitments. As a result, portraying the Trump administration as generally hostile to domestic spending may turn out to be a difficult task.

Mr. Trump’s willingness to put “America first” in his budget priorities responds to one of his core constituencies: the working class. Mr. Trump’s campaign, like the one run by Democrat Bernie Sanders, called attention to the plight of the nearly 64 million Americans who have no postsecondary education and thus are particularly vulnerable to losing jobs and income due to factors like foreign economic competition and technological changes in manufacturing. These Americans also have relatively high rates of substance abuse, broken families, and crime.

Echoing Franklin D. Roosevelt, Mr. Trump referred to these people as the “forgotten Americans” and promised to bring their “voice” to Washington.

But if government is overlooking the working class, the philanthropic world may be doing so as well. Indeed, while the Foundation Center records the beneficiaries of grants by gender and minority-group status, it does not even keep track of programs aimed at this sizable and increasingly needy group.

What the Trump administration will be able to do, or choose to do, to help these people remains to be seen. But if the philanthropic world wants to respond to the anger that was so evident throughout this year’s campaign, a way to start would be by looking at what it can do for the working class — white and minority — that feels beleaguered.

Leslie Lenkowsky is an Indiana University expert on philanthropy and public affairs and a regular Chronicle columnist. He and Suzanne Garment, a visiting fellow at Indiana University, write frequently on philanthropy and public policy.