There is broad consensus that when it comes to foreign funding of nonprofits and universities, transparency is more important than privacy.
Over at The American Conservative, Sarah Lee surveys the problem of un- or underreported foreign funding pouring into U.S. universities and nonprofits and solutions currently on the table to fix it.
Lee finds a general consensus on the right and left that transparency in foreign funding is essential—albeit with different targets in mind.
On the left, Lee finds efforts to tamp down on foreign funding of U.S. political campaigns. One such effort is H.R. 6283 "Get Foreign Money Out of U.S. Elections Act" introduced late last year by Rep. Jaimie Raskin, D-MD. The bill would expand the Federal Election Campaign Act's ban on contributions from foreign nationals to apply also "to foreign-controlled, foreign-influenced, and foreign-owned domestic business entities."
On the right, Lee points to efforts to make foreign funding of universities and nonprofits more transparent. Last summer, Sen. Tom Cotton, R-Ar., introduced S.2060 Foreign Funding Accountability Act to strengthen reporting requirements of foreign funding for universities.
While American universities are already required to report foreign gifts and contracts of $250,000 or more under Section 117 of the Higher Education Act, a 2020 report from the Department of Education, found that many universities significantly underreport their foreign funding. In fact, the DOE's investigation led to universities reporting $6.5 billion in foreign gifts that were previously undisclosed.
Cotton’s bill would significantly lower the threshold for reporting, requiring universities to report any gifts or contracts from a foreign source of $25,000. A principal aim of the bill is to expose and root out the malign influence of the Chinese Communist Party on college campuses. (Of course, wherever the threshold is drawn, it only matters if universities comply better than they have been.)
In the House, Rep. Lance Gooden, R-Tex introduced a bill last year to tighten up reporting requirements for nonprofits. H.R. 1970 "Think Tank and Nonprofit Foreign Influence Disclosure Act" would require 501(c)(3) organizations to report gifts in excess of $50,000 from foreign governments and foreign political parties. It would also require the Treasury Department to make those gifts public in a searchable database. Gooden is particularly concerned, Lee reports, with the influence of foreign actors in the U.S. environmental sector.
What interests me about all of these efforts to prohibit or make more transparent foreign funding for U.S. nonprofits and universities is the broad consensus that when it comes to foreign funding of nonprofits and universities, transparency is essential because its purpose may be to buy influence (or allegiance), to steal intellectual property, or even to commit espionage.
I don’t mean to play dumb here. It’s patently true that foreign governments like China attempt to influence U.S. culture through funding. One glaring example was the proliferation over the last two decades of Confucius Institutes, campus centers funded by the Chinese government that offer courses on Chinese language and culture, at American universities. Writing for the New Republic Isaac Stone Fish linked the Confucius Institutes to an “epidemic of self-censorship at U.S. universities on the subject of China.” Both the American Association of University Professors and the National Association of Scholars have called on universities to cut ties with their Confucius Institutes.
(Happily, the NAS reported recently that a “total of 104 Confucius Institutes have closed or are in the process of closing”; less happily, they also report that "58 have maintained close relationships with their former Confucius Institute partner.")
The consensus is interesting because, as Lee herself acknowledges, “Conservatives tend to like the idea of donor privacy, especially in this era of cancel culture.” In May, the Center for Civil Society hosted a webinar on the importance of donor privacy (you can watch it here or read about it here).
But it’s not just conservatives who value donor privacy. The ACLU, NAACP, and Human Rights Campaign (among others) filed an amicus brief in Americans for Prosperity Foundation v. Bonta, a case in which the Supreme Court ultimately struck down a California law requiring nonprofits to disclose their top donors to the state. In their amicus brief the ACLU et al. argued that California's disclosure law “risks undermining the freedom to associate for expressive purposes. That freedom, in turn, is fundamental to our democracy.”
What the legislative attempts to make foreign giving more transparent highlight is that there’s always a tension between donor privacy and transparency. One man’s “donor privacy” is always going to be another’s “dark money.” Interestingly, however, the scale decidedly tips toward the side of transparency when it comes to foreign funding because of legitimate threats to national security. That is a good consensus to see in our divided politics today.