RealClearPolitics and Conservative Funding Sources

 Many posts have discussed media outlets on the left and right.

Jeremy W. Peters at NY Times:

From 2016 to 2017, donations to the Real Clear Foundation more than quadrupled to $1.7 million, with nearly all of that coming from two entities that conservatives use to shield their giving from public disclosure requirements, Donors Trust and Donors Capital Fund. In 2018, the Real Clear Foundation had its best year yet, reporting more than $3 million in donations. One donor whose identity is disclosed on tax filings is Andrew Puzder ... [onetime nominee for Secretary of Labor]

Public records from those years and interviews show how the leadership and donor base of Real Clear and The Federalist overlapped.

One of The Federalist’s major financial backers is ...Richard Uihlein, according to two people with knowledge of the website’s finances. Mr. Uihlein and his wife, Elizabeth, who runs their family’s multibillion-dollar packaging business, have been known to steer money toward hard-right candidates that many other Republicans have avoided, like Roy S. Moore, the former Alabama judge whose Senate campaign unraveled after women accused him of pursuing them and fondling them when he was in his 30s and they were teenagers.

Ms. Uihlein was also known for her outspokenness against public health lockdowns and revealed last week that she and her husband had contracted the coronavirus.

Together the couple have become one of the biggest sources of investment in conservative politics in recent years. They have given $250,000 to the Real Clear Foundation through their family nonprofit, tax records from 2017 and 2018 show.

The Federalist’s funding remains opaque, but its ties to Real Clear are detailed in public documents. Two top executives at Real Clear Politics were named in disclosures filed by Federalist entities. Mr. [John] McIntyre, the Real Clear co-founder, is listed as a director of The Federalist’s umbrella corporation on a filing with the Securities and Exchange Commission that also bears his signature.

The Real Clear publisher David DesRosiers was listed as a director with The Federalist’s nonprofit foundation. And as reported by BuzzFeed and others, The Federalist has used the same address that Real Clear Politics uses as the location of its Chicago office.

Billionaires and Philanthropy

Felix Salmon at Axios:

[T]ax cuts have removed philanthropic incentives for many Americans. That's because the standard deduction is so large that the middle class no longer sees any benefit from itemizing charitable deductions.

Philanthropy is increasingly looking to supplant or replace government.

• Swiss bank UBS, in its fifth annual report on billionaires, says that many "are seeking new ways to engineer far-reaching environmental and social change."
• Within our lifetime, we will see “the reemergence of a benevolent aristocracy," UBS's head of Ultra High Net Worth, Josef Stadler, told Forbes.

How it works: Individuals like Charles Koch, Mike Bloomberg and Bill Gates use their philanthropies to advocate for societal changes and interventions that they would like to see enacted by governments. Often they engage in explicit lobbying, and often that lobbying is successful, both domestically and internationally.

• Older philanthropies may no longer be controlled by their founders, but care just as much about changing global public policy. The Ford Foundation, for instance, has focused on combating inequality around the world — something that can only be done if it gets governments on board.

What they're saying:

Foundations are an unaccountable, nontransparent, perpetual, and lavishly tax-advantaged exercise of power."
— Rob Reich, Stanford University

Giving in America

A release from the Giving Institute:

Powered by a booming stock market and a strong economy, charitable giving by American individuals, bequests, foundations and corporations to U.S. charities surged to an estimated $410.02 billion in 2017, according to Giving USA 2018: The Annual Report on Philanthropy for the Year 2017, released today.

Giving exceeded $400 billion in a single year for the first time, increasing 5.2 percent (3.0 percent adjusted for inflation) over the revised total of $389.64 contributed in 2016. (Please see below for a more detailed breakdown of the numbers for each philanthropic source and sector.)
...
In addition to the S&P 500, other economic factors, such as personal income and personal consumption, are associated with households’ long-term financial stability and have historically been correlated with giving by individuals. These factors also experienced strong growth in 2017.

Highlights about Charitable Giving by Source

• Giving by three of the four sources of giving grew 5 percent or more.
• Giving by individuals represented 70 percent of total giving.
• Giving by foundations has seen strong growth for the past seven years, according to data provided by the Foundation Center. Its five-year annualized average growth rate of 7.6 percent far exceeds the 4.3 percent annualized average growth rate for total giving.
• Corporate giving was boosted by $405 million in contributions for relief related to natural and manmade disasters.

...
The Numbers for 2017 Charitable Giving by Source:

• Giving by individuals totaled an estimated $286.65 billion, rising 5.2 percent in 2017 (an increase of 3.0 percent, adjusted for inflation).
• Giving by foundations increased 6.0 percent, to an estimated $66.90 billion in 2017 (an increase of 3.8 percent, adjusted for inflation). Data on foundation giving are provided by the Foundation Center.
• Giving by bequest totaled an estimated $35.70 billion in 2017, increasing 2.3 percent from 2016 (a 0.2 percent increase, adjusted for inflation).
• Giving by corporations is estimated to have increased by 8.0 percent in 2017, totaling $20.77 billion (an increase of 5.7 percent, adjusted for inflation).

...
Highlights about 2017 Gifts to Charitable Organizations

• Charitable subsectors receiving contributions generally experienced strong growth.
• Giving to foundations saw the largest growth in charitable contributions, increasing 15.5 percent, based on data provided by the Foundation Center. This growth was driven by extraordinarily large gifts by major philanthropists, such as Michael and Susan Dell and Mark Zuckerberg and Priscilla Chan, to their foundations.
• Giving to eight of the nine major types of recipient organizations increased in 2017.
• The exception was giving to international affairs organizations, which declined after several years of steady growth. However, giving to this subsector still reached its third-highest level ever recorded.
• Seven of the nine types of recipient organizations experienced growth of 5 percent or more....

The Numbers for 2017 Charitable Giving to Recipients:

• Giving to religion increased 2.9 percent (0.7 percent adjusted for inflation), receiving an estimated $127.37 billion in contributions.
• Giving to education is estimated to have increased 6.2 percent (4.0 percent adjusted for inflation) to $58.90 billion.
• Giving to human services increased by an estimated 5.1 percent (2.9 percent adjusted for inflation) totaling $50.06 billion.
• Giving to foundations is estimated to have increased by 15.5 percent (13.1 percent adjusted for inflation) to $45.89 billion, based on data provided by the Foundation Center.
• Giving to health organizations is estimated to have increased by 7.3 percent (5.1 percent adjusted for inflation) to $38.27 billion.
• Giving to public-society benefit organizations increased an estimated 7.8 percent (5.5 percent adjusted for inflation) to $29.59 billion.
• Giving to arts, culture, and humanities is estimated to have increased 8.7 percent (6.5 percent) to $19.51 billion.
• Giving to international affairs is estimated to have declined 4.4 percent (6.4 percent adjusted for inflation) to $22.97 billion.
• Giving to environment and animal organizations is estimated to have increased 7.2 percent (5.0 percent adjusted for inflation) to $11.83 billion.

In addition, giving to individuals, which is less than 2 percent of total giving, is estimated to have declined 20.7 percent (22.4 percent in inflation-adjusted dollars) in 2017, to $7.87 billion, primarily as a result of an unusually high increase in 2016. The bulk of these donations are in-kind gifts of medications to patients in need, made through the patient assistance programs of pharmaceutical companies’ operating foundations.

Unallocated giving was negative $2.24 billion in 2017. This amount can be considered the difference between giving by source and use in a particular year. It includes the difference between itemized deductions by individuals (and households) carried over from previous years. The tax year in which a gift is claimed by the donor (carried over) and the year when the recipient organization reports it as revenue (the year in which it is received) may be different.

Foundations as Policy Advocates

Our chapter on interest groups mentions foundations, which have traditionally financed academic research and charitable activity.  Inside Higher Ed reports on the Gates and Lumina Foundations, which are changing the role of such organizations:

But the unmistakable shift that the two foundations have led in higher education grant-making, Hall and Thomas argue, has been away from giving to institutions and toward closely collaborating with state and federal policy makers and a series of “intermediaries” (nonprofit groups created with the foundations’ funds, think tanks, consultants, etc.) who are interested in carrying out the philanthropies’ agenda.

The foundations back consultants who work to enact new state policies on such things as performance-based funding, and there has been significant crossover of Gates officials, particularly, into the Obama administration. They have also provided significant financial support to K-12 and higher education media organizations (individual publications and groups) aimed at encouraging reporting on the issues they care about. (Inside Higher Ed has not engaged in any such partnerships.)

The change has been driven, the paper says, by “an increasing level of distrust that higher education institutions can successfully enact reforms that will result in meaningful changes to our postsecondary system.”

Hoping to drive broader-scale changes than can be accomplished by seeding many ideas at individual institutions, the foundations have turned instead to the “unabashed use of … strategies to influence government action, policy, and legislation -- in their own words, foundations are taking on a leadership role, acting as a catalyst for change, identifying research areas, supporting best practices, engaging in public policy advocacy, enhancing communications power, using convening power, fostering partnerships, building public will, and employing the bully pulpit.”

They add: “This behavior reflects a deviation from the established norms in higher education philanthropy, norms that generally created a distance between foundation activity and politics.”