In an April 2020 conversation with The Giving Review, former top U.S. Senate tax expert Dean Zerbe described his “grandmother test:” can you explain a charitable activity “to your grandmother and have her think, Yeah, that’s a charitable activity—where Grandma will say, sure, that makes sense, we’re helping these people. As opposed to, Wait, what are we doing, what’s going on here?”
We kind of liked the test, have tried to apply it, and think it might become more relevant to policymaking in the near future.
Applying it again, what might Zerbe’s Grandma think of Kenneth P. Vogel’s and Shane Goldmacher’s recent two-month, in-depth investigation and analysis for The New York Times of the role of nonprofits—including ones incentivized by tax policy to be pursuing charity—in partisan politics instead?
In 2020, “Spurred by opposition to then-President Trump, donors and operatives allied with the Democratic Party embraced dark money with fresh zeal, pulling even with and, by some measures, surpassing Republicans in 2020 spending,” according to their analysis of tax filings and other data.
“The analysis shows that 15 of the most politically active nonprofit organizations that generally align with the Democratic Party spent more than $1.5 billion in 2020—compared to roughly $900 million spent by a comparable sample of 15 of the most politically active groups aligned with the G.O.P.,” Vogel and Goldmacher report.
In the wake of their important Times’ piece, if past patterns repeat, nonprofit and tax-law “experts” will quickly reassure readers that, when Vogel and Goldmacher refer generally to politically active “nonprofits,” they are in fact concealing clear (at least to the experts) legal distinctions between Internal Revenue Code §§ 501(c)(3) public-charity and (c)(4) social-welfare organizations, etc., blah blah blah, inter alia. But Zerbe’s Grandma and most of her fellow citizens would probably react by saying something like, Wait, I thought “nonprofits” were food kitchens and stuff like that. Lawyer-babble aside, how did they get so deeply involved in politics?
Zerbe’s Grandma would be further offended if she were able to tune into another conversation underway among knowledgeable insiders when they are pretty sure she isn’t listening in. In that discussion, savvy partisan experts assure us that all such fine legal distinctions are just “a joke,” and that anyone so inclined can easily use tax-deductible, so-called “charitable” dollars to support whatever partisan causes they wish.
Whichever set of experts may be right—whether those who profess to see major distinctions or those to whom they’re derisory—in the final analysis, non-savvy, non-legal naïfs get a say in the question, through their elected representatives, via investigation or even legislation.
Won’t Grandma wonder: wait, what are we doing, what’s going on here? I’d like my Congressperson to check this out.