This article is being co-published with Inside Political Money.
Last month, the Capital Research Center (CRC) — which has tracked the left’s philanthropic and political money since the mid-1980s — got the kind of publicity hit that think tanks dream about: a major feature article in Politico touting the group’s “breakout moment” in Trump’s Washington.
The center’s new influence has emerged as Republicans in both Congress and the administration have looked to its research to bolster their investigations of progressive organizations, which GOP leaders — including Trump and other top administration officials — have accused of aiding domestic terrorism, abetting voter fraud, and serving as a channel for foreign influence, among other charges. The drive to go after “radical left lunatics,” as JD Vance put it, intensified after Charlie Kirk’s assassination last fall.
Critics of CRC see it as producing flawed, alarmist research and colluding with an administration working to silence criticism across many sectors, including civil society. “It’s clear that the role CRC has been playing is as a sort of information-gathering arm to supply the administration with rationales to go after certain groups,” Michael Clauw of the watchdog group Campaign for Accountability told Politico. “And many times, it’s been revealed that those stated rationales don’t really hold any water and don’t stand up to scrutiny.”
Scott Walter, president of the Capital Research Center, denied these charges to me in a recent interview, saying that CRC is simply doing what it’s always done — educate whoever will listen on abusive practices in the charitable sector. “We have developed a reputation as a valuable source of information on this whole world of influencers and money, and so various people in the administration will ask us to brief them on what we know,” he said.
Decades of battling the left
Walter is certainly correct that CRC isn’t a newcomer to political battles over the left’s money. It’s spent decades in the trenches decrying what it sees as the politicization of the charitable sector, with a singular focus on liberal funders and nonprofits.
I’ve followed CRC’s work since the 1990s, as I’ve conducted my own deep dives into private foundations, billionaire donors and philanthropic networks. In recent years, this world has increasingly intersected with politics, as nonprofit funders have found ever more creative ways to influence both elections and public policy debates.
Walter and I broadly agree that this has been a negative development. IRS charitable rules were never meant to provide tax subsidies for large-scale political activity by wealthy donors.
But while Walter and I agreed on this core point, we disagreed on much else, starting with how to think about money in politics.
To me, the philanthropic capital shaping elections and policy is just one part of a broader problem that includes campaign spending and lobbying: the way wealth is converted into civic power, diminishing the voice of ordinary people in our democracy.
Walter, though, is unconcerned about these other forms of influence spending, including the outsized role that billionaire donors like Elon Musk played in the 2024 election. “Inequality of wealth in and of itself does not scare me,” Walter said. “The politicizing of the charitable sector is the thing that most disturbs me. The billionaires in America who scare me the most all have the same last name: Foundation.”
A believer in civil society sounds the alarm
Walter described his work as rooted in a conservative intellectual tradition concerned with civil society, mediating institutions, and the dangers of centralized power.
He traced that outlook to his early years in Washington. Walter’s first job in the think tank world was as an intern with Michael Novak, then a resident scholar at the American Enterprise Institute, an ardent conservative champion of civil society as a bulwark against statist overreach. While Walter had originally held libertarian views as a student at Georgetown in the early 1980s, his views shifted over time. “The individual and the state were the only things libertarians thought about or cared about, and so they were missing the most important thing in America — the in-between institutions: family, neighborhood, faith.”
Walter would ultimately spend six years at AEI in the 1990s before moving over to the Philanthropy Roundtable — the conservative association of foundations — to serve as its vice president for publications and research. In 2012, he joined CRC as executive vice president and has led the institution since 2016. During this time, CRC has stepped up its efforts to raise the alarm about how liberal grantmakers and wealthy donors operate, as well as unions, another major source of funding on the left.
Walter says that he’s been continually frustrated by how little attention is given to problems of abuse in the charitable sector. “Very few people actually understand what’s going on,” he said. “Certainly, it is not my experience that members of Congress of either party have much understanding.”
CRC’s job, he says, is to help people in power develop such an understanding. He estimated that in recent years, he’s testified before Congress about every three months.
A selective critique of nonprofit abuses
Despite Walter’s professed concerns about the perversions of nonprofit structures for political ends, CRC has shown little appetite for applying its critique across the political spectrum.
For example, while it’s written extensively on liberal dark money, especially from entities associated with what was previously Arabella Advisors, such as the New Venture Fund, it’s had little to say about similar funding vehicles on the right, such as the Koch political network, which moves substantial amounts of dark money.
Walter acknowledges that CRC is mainly focused on the left, but says that’s because this is where its work is needed most. “There are so many places — very much including SourceWatch, the Center for Media and Democracy, the New York Times, NPR, ProPublica — that very thoroughly cover money on the conservative half of the spectrum,” he said. “So I never worry that folks on that side are going to lack for exposure and investigations.”
While this may be true, Walter is sidestepping the realities of running a Washington advocacy shop. CRC’s funders — which include a wide range of conservative foundations and donors — don’t contribute more than $7 million a year to CRC to act as an even-handed nonprofit watchdog, a role that might logically also include investigating funders on the right. They’re giving money to go after the left, which is what CRC does every day, often filling its newsletter with heated ideological language and exaggerated claims that undoubtedly play well with its donors.
CRC’s approach to the problems with philanthropy and nonprofits is an example of what I’ve called “à la carte alarmism.” Just as liberal critics of conservative philanthropy like to focus almost exclusively on dangers posed by the Kochs or newer right-wing donors like Jeff Yass, CRC and other critics of progressive funders apply their critiques in a highly selective fashion.
Meanwhile, there are very few voices in these polarized times that are calling out the systemic flaws of a charitable system that allows funders on all sides to pour tax-deductible money into influencing politics and public policy.
What’s legal?
Another challenge to CRC’s credibility is how it breathlessly calls out the dangers of politicized liberal philanthropy without noting that such practices are entirely legal under current law.
CRC’s real beef, as I see it, is with a regulatory structure that allows a very wide range of political activities by 501c3 organizations and also permits the lack of transparency that enables so much dark money to flow through 501c4s. Or, as I’ve written elsewhere, the “problem is the law, not the left.”
Yet CRC and Walter don’t talk much about problems with current law or offer detailed solutions. Instead, their relentless focus is on abuses by liberal funders.
When I offered that observation to Walter, he rejected my premise that the main problem is a permissive legal framework rather than violations of law. “You said that virtually everything is legal. I don’t agree with that,” Walter said.
Walter pointed to voter registration work that he believes is effectively partisan. He cited Democratic-aligned voter registration strategies promoted by Mind the Gap and other groups, like the Center for Voter Information, as examples of activity he believes pushes or crosses legal boundaries. “I don’t think that’s legal, and I think it’s been going on for a long time,” he said.
These are claims that Walter and CRC have been making for years. What’s less clear is how often they’ve actually talked to the 501c3 groups that do this work or experts in nonprofit law at places like the Alliance for Justice, which assists nonprofits in navigating IRS rules.
I have had those conversations. And my main takeaway is that these groups and their lawyers have deep knowledge of charitable law and the court rulings that have interpreted these statutes over the decades. They know exactly what kinds of voter registration and engagement activities are permissible, down to a granular level. Their practices, like those of funders in this space, are carefully vetted by lawyers and defensible in court.
Are there sloppy compliance practices at some voter groups, especially small ones? Probably so. But that’s true of any complicated regulatory regime, where larger organizations have greater capacity to navigate it. Conservatives have been among the most persistent critics of such government red tape, arguing that it’s easy to run afoul of oversight.
Possibilities for reform
In our conversation, Walter acknowledged that the rules governing nonprofit election activity are ambiguous and difficult to enforce. “The fuzziness of the law is a bad thing,” he said, adding that he is not eager for broader IRS enforcement under the current vague rules. Instead, he wants clearer lines.
His preferred policy would sharply restrict election-related activity by 501c3 groups and private foundations. “The law should be clarified,” Walter said. “My own preference would be for it [electoral activity] not to be legal, period, for foundations or charities,” he said. “But clarity in either direction would be an improvement over what we have now.”
I share Walter’s views here. I’ve called for efforts to curb the many ways that wealthy donors and foundations can influence politics and policy through tax-deductible giving in my book “The Givers” and elsewhere. In truth, though, I have little confidence that lawmakers and regulators could figure out how to do this in ways compatible with free speech. And I certainly don’t have confidence that the current Republican Party could be a good-faith partner in reform efforts.
Nor do I see CRC as part of the solution, given that it’s shown little interest in fixing a flawed system; its overwhelming focus is on bad liberal actors within that system.
One reform that CRC does champion is imposing more elaborate reporting requirements on nonprofit fiscal sponsorship arrangements, which it says are used to obscure how money flows from funding intermediaries like the Tides Foundation. I have my own problems with fiscal sponsorship — which can make it harder to hold bad nonprofit leaders and organizations accountable. I also agree that these entities reduce the sector’s transparency. But new rules now being considered by the IRS have been widely criticized as politically motivated and for imposing additional regulatory burdens on nonprofits, undermining the sector’s dynamism. Among those groups opposing the changes is the Philanthropy Roundtable, the association of conservative grantmakers.
CRC’s laser focus on what Walter has called “divisive, radical groups,” rather than constructive reform, is mirrored by Republicans in Congress and the Trump administration, which has been far more interested in targeting their enemies in the nonprofit world than in making a genuine effort to reform outdated and ambiguous IRS rules.
When I asked Walter if he was concerned about helping the administration advance its political vendettas, including against the Soros family, he dismissed the idea that CRC’s work was a driver of decisions. “If we ceased to exist this afternoon, plenty of people inside and outside the Trump administration would still be upset at what they believe the left-wing networks have done and are doing,” he said. “I don’t think it would be accurate to say that we are causing this kind of activity, nor do I think that we’re contributing to it in any irresponsible way.” He added: “No one asks me, ‘Who should we prosecute?’ And I certainly don’t say, ‘I’ve got an enemies list; I want you to prosecute these people.’ Nothing like that.”
Walter said he had tried to draw clear boundaries between legitimate investigation and improper retaliation. “I am always emphatic that free speech should not be harmed by any government officials at any level for any reason,” Walter said.
Partisan battles over civil society
Here, again, Walter is sidestepping how Washington works, especially under Trump. When you sound the alarm about something, implying rampant illegal activity, your work is going to be weaponized by partisan actors. And indeed, CRC’s work has been cited by Trump officials to justify an investigation into OSF and the Soros family that appears to be part of a larger campaign of political retribution. That research — namely, a report claiming that OSF “has poured over $80 million into groups tied to terrorism or extremist violence” — has been criticized as exaggerated and inaccurate, both by OSF and independent legal experts.
In our conversation, Walter defended CRC’s research on Soros and OSF. “If you find somebody who can name a specific error we made, I will be more than happy to reply to it,” he said. Walter said that Trump’s public rhetoric about Soros was not spurred by CRC’s report and, in any case, has not yet produced the kind of government action that, in his view, would constitute real persecution. “If President Trump ever gets anywhere near that, I will certainly be happy to denounce it,” Walter said.
Such comments aside, it’s hard to square Walter’s professed devotion to civil society with CRC’s de facto alliance with an administration that’s trying to do what authoritarians do worldwide — suppress dissent from civil society and harass nonprofit institutions, often by citing links between targeted institutions and terrorism, a key talking point for CRC.
For years, the nonprofit sector was largely insulated from the intense polarization and lawfare consuming U.S. politics. That’s now changing, and the reverberations could extend for years to come.
Among the possible consequences of GOP investigations of liberal groups like ActBlue, the Southern Poverty Law Center and the Ohio Organizing Collaborative is that Democrats decide to run this playbook in reverse when they’re in power.
That prospect, Walter said, is not appealing. “I would not want to see pitched battles back and forth.”
