Why Funders Should Stop Worrying and Learn to Love Democracy Giving

trekandshoot/shutterstock

Here at IP, we’ve been thinking a lot about democracy funding lately. We marked the one-year anniversary of the January 6 insurrection last week, and it’s the start of another election year (hooray!). But that’s only part of it. Over the longer term, the heated debate around our imperiled democracy is unraveling closely held preconceptions about nonprofit funding, sending civil society into terra incognita.

It’s scrambling up staid old philanthropic norms and introducing an element of uncertainty, even danger, into the worldviews of funders whose privilege can otherwise insulate them from the darker aspects of the American experiment. Of course, that’s hard to discern from most funders’ words and grants, which still tend to favor milquetoast strategies and kumbaya-flavored rhetoric. Nevertheless, we have seen a surge in politicized giving on either side of the aisle over the past several years, particularly from progressive donors resisting Trumpism. 

Some of that funding has been fairly conventional—voter education, attempts to “build bridges,” advocacy around the 2020 Census and the like. But there are plenty of advocates who see the democracy fight as, well, a fight. They’re probing the red line of politics that most 501(c)(3) grantmakers refuse even to approach—despite significant latitude under tax law—backing things like voter mobilization and challenges to voter suppression. Meanwhile, their opponents on the right—historically less gun-shy about pouring philanthropy into the political arena—are busy deploying tax-deductible funding to stoke fears about voter fraud and oppose racial justice advocacy.

As an illustration of these shifting norms, the Chronicle of Philanthropy ran an op-ed last week by Pamela Shifman of the Democracy Alliance and Lateefah Simon of the Akonadi Foundation, who argue that to win the fight to save American democracy, progressive donors should prioritize 501(c)(4) giving and forgo some of the tax benefits of c3-only giving. Traditional tax-deductible philanthropy, they write, is a woefully insufficient source of “the immediate fuel needed to fight back directly against mounting right-wing assaults” in the democracy fight. 

In our own coverage on the anniversary of the January 6 insurrection, my colleague Connie Matthiessen highlighted one such counterattack, and it’s a pretty unorthodox one. The Insurrection Index, an online public database, tracks January 6 insurrectionists “in positions of public trust, including holding or seeking public office.” It was created by Public Wise, a fairly new democracy-focused funding vehicle bankrolled by Eric Laufer, and active as both a c3 and c4 funder. 

While the Insurrection Index is simply collecting public records and presenting them in one place, it’s still an unconventional way to deploy nonprofit civic funding. The same goes, of course, for democracy gifts like Mark Zuckerberg and Priscilla Chan’s massive election administration donations in 2020, a much higher-profile example of the same sort of boundary-pushing democracy giving.

On one hand, this new wave of more aggressive civic funding can be a lightning rod for controversy and conspiracy theory. Chan and Zuckerberg’s giving (not through CZI, by the way) has been taken up enthusiastically by the right as a stick to beat progressives with—even though few progressives I know would call Zuckerberg one of their own. It also calls attention to the muddy distinctions in our charitable giving tax code, and stokes fully justified anxiety over the growing role of outsized private wealth in just about every aspect of public life.

At the same time, it’s heartening to see more nonprofit funding—c3 and c4—making it to ground-level democracy activists, not just because the money can help score political wins, but also because it’s a sign that at least some liberal grantmakers are getting over their decades-long failure to defend their values on the political stage. Defense of a strong and equitable American democracy, while currently stranded on one side of the partisan divide, should be one of those values—and it’s a worthy and legitimate charitable cause.

As frightening and unpleasant as it can be, the democracy fight is shaking up the old status quo around supposedly “apolitical” philanthropy. That’s a good thing in the long run. Meanwhile, here are a few points we hope people in the philanthrosphere keep in mind as the struggle to protect American democracy continues.

Be proud of your democracy giving.

Some funders on the left have a tendency to see politics-adjacent nonprofit funding as less than pure, as “dirty” even, as it can be seen as another form of money in politics. That’s a valid concern in one sense, since these dollars are far from democratic and come at the behest of the wealthy. But it’s also kind of self-defeating, especially if it depresses giving or causes donors to retreat into anonymity via donor-advised funds or non-transparent c4 avenues. 

Part of the problem is the persistent trope that political giving is “a page out of the conservative playbook,” and thus, to progressives, somehow illicit. That may be a historically valid point, and it’s an imbalance that IP has pointed out frequently, but that dynamic is changing as a flood of progressive advocacy funding flows in. There are certainly forms of political giving that are unsavory, but philanthropy that engages with the political system shouldn’t necessarily be viewed as a dark art.

If a donor really believes a gift will help save American democracy, they should own it. Take the tax deduction if applicable and put out a press release. If a donation to an Ivy League alma mater warrants that much, shouldn’t saving democracy? It won’t hurt, really!

Don’t forget about (effective) c3 funding. 

In their op-ed, Shifman and Simon make a convincing case for more attention to 501(c)(4) groups, which have often received short shrift from donors. But funders should also remember that there is actually a great deal they can back under the 501(c)(3) umbrella, fully legally, to bolster the democracy fight. And I’m not just talking about the kumbaya stuff. 

Donations to state-based voter mobilization groups like the New Georgia Project and the New Florida Majority Education Fund can impact crucial contests, as can support for voting rights advocacy organizations like the Campaign Legal Center or the Brennan Center for Justice, to name just a couple. I’ll also mention NEO Philanthropy’s State Infrastructure Fund, and the fact that many grassroots organizing groups maintain c3 arms.

Pay attention to what the other side’s saying.

Some may disagree, but I think it’s crucial for democracy funders to keep tabs on their opponents’ arguments and messaging. Retreating into one’s own echo chamber may be nice from time to time, but it’s a tactical risk that progressives have a tendency to fall into. At the same time, hyper-awareness of how the other side might spin things shouldn’t dissuade funders and advocates from acting.

Don’t just give during election season.

It’s been said many times, but it’s always worth repeating: Democracy funding often follows a boom-and-bust cycle corresponding to election years, which can leave advocates out in the cold at the very time they need sustained support to build their operations in the run-up to the next contest. Coming in with last-minute support is better than ignoring democracy funding altogether. But sustained general support still takes the cake.