State Policy Network Newsletter Regulating Private Philanthropy and Strangling Free Speech By Dr. Bob McClure November/December 2015
Imagine you start a small company that turns into a multibillion-dollar organization – and you become one of the bigger success stories in your field. You lead the development of the company, help it grow and evolve, and then you reach the pinnacle – being named CEO as the company goes public. Imagine then, your dreams dashed. You are forced to resign from the company because of a small donation you made seven years prior to a controversial political cause you felt strongly about.
If you think this could never happen in America, ask Brendan Eich what he thinks, because this is his story. He started a small Internet company called Mozilla, which eventually became a huge company that went public. In 2008, Eich made a $1,000 contribution to California’s Prop 8 initiative, which sought to define marriage as between a man and a woman. The Left wanted Eich’s scalp and used the disclosure of this small donation to force him from the company he helped create. Regardless of one’s position on gay marriage, or any issue, the Left’s tactic of using political donations as ammunition, against the actual donor no less, is a dagger striking at the heart of the First Amendment.
The beauty of liberty is that no matter how much money a person earns, one’s wage is theirs to give, spend, or save – and America is a nation with a big heart. According to the 2014 World Giving Index, the U.S., referred to as “the world’s philanthropic powerhouse,” ranks at the top of all three giving behaviors measured: monetary giving, volunteering, and helping a stranger. Indeed, the concept of voluntary, private philanthropy and giving of our time, talent, and treasure is as old as our Republic. In fact, in his early 19th century narrative “Democracy in America,” Alexis de Tocqueville was quick to note the generosity of the American spirit.
The tradition of private philanthropy in America is one that is respected, encouraged, and in most cases, even supported through tax deductibility. More importantly, private philanthropy is regarded as a choice not governed by political forces. Unfortunately, freedom’s enemies have zeroed in on this tradition and seek to destroy it. In the case of Brendan Eich, they claimed a small, but hopefully Pyrrhic victory.
Over the past several years, The James Madison Institute (JMI) has made the protection of private philanthropy one of our top policy priorities. As Florida’s oldest and largest free market think tank, we take seriously this threat to freely associate that lies at the core of the Left’s assault.
JMI first began working on this topic in 2009 after observing a series of events in California that were prophetic for Florida. California’s state assembly passed a bill requiring private foundations to publish the race, gender, and sexual orientation of both their board of trustees, and of the staff and leadership of the charities that they supported. The bill was based loosely on the idea that since philanthropic foundations were tax-exempt, the government possessed the right to regulate heavily the practice of private giving.
This piece of legislation was eventually pulled, but only after Left-leaning groups blackmailed numerous philanthropic organizations into supporting their pet causes.
At its core, the enemies of debate use thinly veiled extortion disguised as public policy to stifle their political adversaries. Is your opponent effective? Use donor disclosure and impose mandates on philanthropic giving to cut off the air supply of funding, or to bully them to back off their projects. This is old-fashioned political gamesmanship, plain and simple – and we all lose as the First Amendment takes a beating in the process.
Unfortunately, this destructive approach migrated to the Sunshine State. In 2009, a movement based on misleading statistics and the message of “helping Florida’s minorities,” started to gain traction. JMI recognized this unparalleled threat and sought to uncover the truth behind the motives of this effort. Matthew Vadum, a member of JMI’s research advisory council, published a Policy Brief titled “The Future of Philanthropy in Florida.” This report exposed the cataclysmic intentions behind the effort to force public disclosure of donor information.
As a result of JMI’s work, both the public and policymakers were keenly aware of the dangers facing private philanthropy. Subsequently, the Florida Senate took the lead in passing SB 998, a preemptive measure designed to protect the information of donors and the causes they support. SB 998 was ultimately passed by the Florida Legislature and signed into law in 2010 by then Governor Charlie Crist.
Of course, the battle never ends. In 2014, a national organization called Represent.Us teamed up with the Tallahassee Tea Party placing an initiative on the Tallahassee city election ballot creating an ethics commission with sweeping power to root out political corruption. The initiative passed with more than 60% approval. And while donor disclosure isn’t mandated by the initiative, the door is open for the unelected commissioners to eventually require it. Represent.Us isn’t stopping in Tallahassee. They want to pass a similar law in cities all across the country.
And it’s not just local ballot measures we’re facing. Statewide initiatives have been introduced in Arkansas and California that would require non-profit groups to report the names and addresses of their supporters to the government. State lawmakers in a dozen states and campaign finance regulators in another half-dozen are considering regulations to do the same.
The enemies of free and open debate continue to plot their attack, but we are also at work encouraging more civic engagement on this issue. Just this year, JMI hosted a public debate on the merits of donor disclosure laws. This forum, between Mr. Hans A. von Spakovsky, a senior legal fellow and manager of the Election Law Reform Initiative at the Heritage Foundation and Dr. Craig Holman, a political lobbyist at Public Citizen, provided a platform for students, policymakers, and citizens to learn about the importance of charitable giving in our society and potential threats to donor privacy.
The idea of government controlling, whether directly or indirectly, where money flows in the philanthropic arena goes against the fundamental meaning of freedom. Our country continues to thrive because of innovation, economic opportunity and the voluntary generosity of the American public. Moreover, private philanthropy has proven time and time again to be far more effective at serving those in need than simply another government program.
Florida is home to millions who choose to support a variety of charities in many ways. The James Madison Institute has taken a stand to not only thwart regulations on private giving, but also to safeguard the future of free association. As we’ve seen, it is inevitable that certain charitable givers and the organizations they support will continue to face challenges to their freedom of choice. It happened here in Florida and your state may be next, if these foes haven’t made their way there already.
Organizations like JMI, and our SPN partners around the country, must expose these misleading tactics, the deceptive motives and the false messages being peddled in this important debate. It’s up to us to prevent the next Brendan Eich from facing persecution for simply exercising his First Amendment rights.