Trump’s All-Out Culture War Is Now Targeting Philanthropy

In signing the 1969 tax bill into law, President Richard Nixon said it “reflected a deep and wholly legitimate concern about the role of foundations in our national life.” Two years later, in April 1971, Nixon could be heard grousing about the Ford Foundation on the White House tapes. The foundation, Nixon said, funded trips to Africa by Maine Senator Ed Muskie, then judged Nixon’s likeliest Democratic opponent in 1972:

I traveled for eight years by myself. I paid it all out of my own pocket.… I financed the whole goddamn thing. Did I ever hear a word from the Ford Foundation? How many foundations suggested, “Look, Nixon, the former Vice President, is going to make this trip abroad. You’re going on a nonpartisan basis. We’d like to help”? No. They finance this son-of-a-bitch Muskie.

Under current law, philanthropies are required to pay a flat 1.39 percent tax on their endowment income. The House bill would keep that 1.39 percent tax rate for foundations with net assets below $50 million, but impose three new brackets for wealthier philanthropies. Foundations with net assets at or above $50 million but less than $250 million would pay a marginal tax of 2.78 percent; foundations with net assets at or above $250 million but less than $5 billion would pay a marginal tax of 5 percent; and foundations with net assets at or above $5 billion would pay a marginal tax of 10 percent. These higher rates would apply to 2,900 philanthropic organizations, according to the nonprofit Philanthropy Roundtable, at a total cost over the next 10 years of not quite $16 billion. As the Philanthropy Roundtable points out, that $16 billion “would otherwise support education, the arts, religious missions, medical research and local civic efforts.”

One puzzling aspect of the House proposal is that it would affect conservative philanthropies as well as liberal ones. Since 1969, philanthropy has changed in three significant ways. First, it’s gotten significantly more political. Second, many of these more political philanthropies are conservative (typically very conservative). Third, philanthropies are funded much more than they used to be by big-money donors, many of whom also throw a lot of money at conservative political candidates.