Congress and the Media Should Turn Up the Heat on Nonprofits

The charitable sector needs more media and government scrutiny. I write that sentence fully expecting blowback. But I’ve come to believe that investigations and criticism of organizations across the ideological spectrum may be the only way to reduce the expanding use of tax-deductible charity to pursue political ends.

Such scrutiny has accelerated in recent years on the political right. After a busy 2025, the House Ways and Means Committee is continuing its interrogation of the nonprofit sector. Last month the committee held a hearing on foreign donors using nonprofits to influence domestic policy and elections. The Trump administration has also opened investigations into donors and organizations involved in resistance to ICE-led immigration raids. And groups involved in anti-Israel protests and other progressive causes are regularly criticized in conservative publications for possibly violating nonprofit regulations.

Many observers on the left are alarmed at the prospect of multiple, wide-ranging investigations and hearings concerning the work of advocacy groups and the foundations that support them.  Surprisingly, the Philanthropy Roundtable, the trade association for conservative donors, has also urged Congress to limit if not stop these hearings because “this path will backfire and be turned against conservative causes and organizations when political winds shift.”

I would welcome retaliatory hearings by both parties when they control a branch of Congress just as I would welcome more scathing investigations of nonprofit behavior by the mainstream and partisan media.  An environment of scrutiny and recrimination may be the only path by which a sharper line between charity and political action can be drawn.  

If funders and grantees on the left and right are fearful of being investigated by highly motivated journalists or hauled before an antagonistic congressional panel, they may be more cautious when undertaking projects that seek to shape public policy or influence the outcome of elections.

‘Political Combat’

In an excellent recent article, David Callahan, the editor of Inside Philanthropy, argued that “ ‘charitable’ dollars are being used for political combat — by funders on the left, right, and center.  Current laws allow tax-deductible donations to flow into politics through a wide array of channels.”

Callhan founded and continues to run Blue Tent, which provides advice on how best to invest in progressive organizations and candidates — in other words, he is exploiting these laws himself for political purposes. But even he thinks there’s a problem. “America’s tax-subsidized charitable sector has strayed far from its founding mission. The public does not support a system that offers so many different ways to convert wealth into political influence and get a nice deduction in return.”

Callahan is not optimistic about the prospects of fixing this problem. The IRS and state level authorities have been hesitant to enforce current laws for fear of retribution from politicians. And politicians have little incentive to bite the hands that feed them. Even if they did, it’s not clear what new laws and regulations would actually succeed in stopping charitable support for politically adjacent activities. It would just be a matter of time before skilled lawyers and other advisers found loopholes.

The Power of Negative Attention

While media attention, presidential threats, and Congressional hearings may not change the regulatory landscape, they can inflict reputational damage and force groups to spend time and money defending themselves.   

Consider the fate of the former presidents of some of the nation’s most elite universities. Poor performances during a congressional hearing on antisemitism ended their careers as educational leaders.  

Negative attention can also disrupt the flow of charitable dollars to institutions under scrutiny as donors ponder the wisdom of supporting politically controversial causes. Wealthy individuals who still have active businesses may be especially cautious if they think that their charitable activities might disturb their livelihoods.

The Chan Zuckerberg Initiative is a perfect example. In 2020, the organization poured $400 million into efforts aimed at promoting fair elections, which many observers saw as partisan in intent and in execution.  After media reports and congressional inquiries that suggested partisan motives, they retreated from any giving that smacked of politics and now concentrate their philanthropy on biology.

Some funders would be unaffected by critical attention from the media or Congress.  George Soros, Charles Koch, and their closest nonprofit allies are unlikely to change their giving practices. Other donors may start to funnel their politically adjacent giving through donor-advised funds where contributions to controversial projects can be made in relative anonymity.  Advocates for donor privacy will become louder and more strident especially if the names of some contributors to controversial projects are leaked or inadvertently released.

Over time, however, increased public attention on how charitable dollars are used for political purposes would have an impact on other funders and nonprofits. Both would start to calculate whether the public scrutiny and approbation are really worth it. Like Chan Zuckerberg, many might decide to trim their sails and give money in other less complicated areas of the charitable sphere.

The Best Option

Since 1993, control of one or both houses of Congress have changed hands nine times, or roughly every four years. If donations to politically aligned nonprofits started to drop, would politicians decide to forgo their turn at exposing their opposition’s favorite contributors and organizations? Would they seek a bipartisan peace treaty and simply tolerate the excesses on both sides?

I think that’s unlikely for several reasons. Calling out the real and imagined perfidies of the other side is great performative art and irresistible to most politicians who know that congressional hearings and media coverage can increase their popularity with voters. Republican Representative Elise Stefanik of New York, for example, won celebrity status for her pointed questioning of university presidents about antisemitism on their campuses a few years ago. 

Perhaps more important, constant attention to the use of charitable dollars for political purposes could ultimately undermine public support for the charitable deduction as it is now applied. Since most people who give to charity don’t receive tax benefits, it’s not hard to imagine a popular backlash against subsidizing the partisan activities of billionaires.

Escalated media and congressional scrutiny would not be a substitute for better laws.  But short of terminating the charitable deduction, there is no obvious legal or regulatory means for curbing the current excesses.