Perfectly Legal: Eight Ways Charitable Cash is Shaping the 2020 Election

This article was originally published on February 7, 2020.

We’re over one month into 2020, and one of the most consequential elections of our era is underway. For some funders, the political moment has little impact on the flow of grants. But plenty of others realize just how much legal leeway they have to influence elections. Even as a debate over plutocratic power reaches the mainstream, a great geyser of money is being deployed to shape America’s political future.

Foundation funding is only a small part of that story. Despite the many fully legal ways 501(c)(3) funders can make their mark in the political sphere, an ongoing culture of political reticence has kept most foundations’ election-related portfolios modest, if they exist at all. According to Candid’s useful resource on democracy funding, total foundation grantmaking for “voter education, registration and turnout” from 2017 through the present amounted to only around $72 million. Candid’s numbers don’t reflect the most recent giving, but even double that figure is still a drop in the bucket next to the resources that political donors and campaigns deploy. Bernie Sanders raised $25 million last month alone, for example, while Mike Bloomberg is on track to spend hundreds of millions of dollars on his campaign.

Nevertheless, amid the frenzied discourse of the Trump era, more philanthropists and foundations are becoming attuned to the crucial importance of movement building and advocacy. And like it or not, electoral politics is where most of those questions are decided. The result: new streams of money to influence this year’s election channeled through c3s, c4s, 527s, you name it—to fund a more nuanced and integrated set of strategies, especially from a progressive left that found itself blindsided by Trump’s 2016 victory.

Here are some of the most important ways funders are using their financial heft to prepare for and influence the 2020 election. We’ve given greater prominence to 501(c)(3) work and steered clear of direct campaign spending, but it’s impossible to ignore some of the murkier funding streams like c4, so we’ve included those, too.

1. Mobilizing the Vote

When it comes down to it, getting people to the polls—particularly the right people for your side—is what decides elections. And there’s a lot funders can do on that front under the c3 rubric. One of the most common electoral strategies is to back nonprofits that register voters known to favor the donor’s side. For funders on the left, that means getting more young, non-white and female voters to the polls. On the right, that might involve evangelical outreach.

Funding to “get out the vote” tends to wax and wane with the electoral cycle. Backing voter registration is a fairly short-term way to influence elections, one that some in the field describe as “transactional.” More effective strategies to mobilize voters, they argue, should involve long-term, off-year support for organizations rooted in communities. The Funders’ Committee for Civic Participation (FCCP), a network of democracy-minded grantmakers with a liberal tilt, has long advocated for such an approach. “We know voter mobilization can increase when voters are engaged by organizations and individuals with which they have relationships,” said FCCP’s Executive Director Kristin Purdy. “A baseline strategy for many of our members is relational organizing, namely incorporating traditional in-person organizing with more innovative digital tools.”

Since 2016, the “resistance” against Donald Trump’s agenda has given rise to new streams of cash for ground-level movement groups organizing likely progressive voters. But as Tory Gavito, who heads the progressive donor collaborative Way to Win, tells it, integrated strategies to engage voters on the ground are still chronically underfunded. “We need to be thinking about everyone that’s part of this electorate: big, young, multiracial populations in places outside where philanthropy has tended to look, particularly the South,” she said.

By contrast, conservative donors tend to place less emphasis on getting out the vote for a simple reason: the older, whiter Republican base already votes at far higher rates than many typical Democratic demographics. “At the end of the day, civic engagement is a good thing,” said Lawson Bader, who heads the right-leaning DAF sponsor DonorsTrust. “But I struggle around the question of where it is civic engagement versus purely political advantage.” Adam Kissel of the Philanthropy Roundtable has similar concerns: “Get-out-the-vote efforts that concentrate on particular groups because of perceived voting patterns are not really about the civic value of voting, but about seeking partisan advantage,” he said.

Nevertheless, there has been some momentum on the right to attract the vote of Latinos, youth and other demographics associated with the left. The Koch-funded Libre Initiative, for example, extols the virtues of “a constitutionally limited government, property rights, rule of law, sound money supply and free enterprise” to Latinos.

Targeted voter mobilization and registration has attracted a growing stream of funding in the lead-up to 2020, some of which is difficult to track. According to reporting from Vox, one “secretive” network of liberal Silicon Valley donors called Mind the Gap has raised over $35 million in c3 funds for 2020 get-out-the-vote efforts centered in battleground states and communities of color. The group’s spending target is $140 million. This tide of cash bodes well for the Democratic ground game, but it’s a safe bet that Republicans are plotting their own investments aimed at rallying their base. As political scientists remind us, mobilization by one side almost always fuels by mobilization by the other side.

2. Drumming up Issue-based Support

If funders feel uncomfortable making grants for direct voter mobilization, they can always support their side by backing nonprofit issue advocates. This is one of the most popular strategies for electoral impact among foundations, which have furnished over $266 million for “issue-based participation” since 2017. Grantees here vary widely, but it’s usually pretty easy to identify where they stand on the left-right divide. Take the Ford Foundation’s $1.6 million grant to the National Institute for Reproductive Health in 2018, or the Sarah Scaife Foundation’s grants to the Federalist Society for Law and Public Policy Studies totaling over $1 million in 2017.

Read the descriptions for these grants, and you’re unlikely to encounter much talk of elections. But this money can be crucial as issue-focused organizations pump up their movement and messaging infrastructure for campaign season. “So many political dollars go to this idea of a charismatic leader who can get elected,” said Gavito. “It shouldn’t be about who, but what they stand for. We need a robust issue agenda and the power to articulate what those issues are.”

Conservative donors are also thinking about how to advance their issues, and some of these choices will depend on what happens in the Democratic primaries. According to Bader at DonorsTrust, the candidate Democrats nominate for president will determine where a lot of conservative issue advocacy dollars go.

Besides culture war hot buttons like gun rights and abortion—which always get lots of money—Bader sees conservative money flowing to advocacy around finance and tax policy, especially where that work includes some litigation component. Questions of economic regulation and government oversight have broad cachet on the right, and despite his fondness for executive action, President Trump has been a successful deregulator in many ways. “Groups that are focused on education reform will have to try to raise more awareness, since that’s not seen as critical an issue this year by many conservatives,” Bader added.

Of course, we’d be remiss not to discuss those evergreen right-wing rallying cries, like gun rights, pro-life advocacy and calls for the “religious freedom” to discriminate against groups like LGBTQ Americans. As Bader pointed out, there are still significant divides on the right between, say, the Trump base and the “Never-Trumpers,” or between the religious right and the libertarian crowd. But the conservative funding world is diverse enough that there are sources of support for a range of viewpoints on the right. DAFs at places like the National Christian Foundation, for example, lavish tens of millions on controversial policy shops like the anti-LGBTQ Alliance Defending Freedom.

This election may also have consequences for the business of giving itself. If the current populist moment leads to new legal challenges to donor privacy, for instance, or to the regulation of DAFs, “a smaller subset of donors who care about that issue in particular might give money differently depending on who’s in the White House,” Bader said. Even though the Trump administration has shown little willingness to delve into the debates around charitable tax law, a Warren or Sanders administration might. And that’ll have consequences not only for the DonorsTrust crowd, but also for big liberal givers.

3. Building State and Local Capacity

A common lament among donor organizers in the political space is how little funding makes its way to local and state-level groups operating closest to prospective voters. Especially in presidential cycles, copious resources flow to the national groups and charismatic campaigns that also capture most of the media’s attention. Meanwhile, nonprofit organizers going door to door often operate from a position of scarcity. There are some signs of change, however. “By and large, a very large swath of the foundation world has bought into the theory of long-term power-building and investment,” said Dave Montez, vice president at the Democracy Alliance. “There’s also definitely a trend in the right direction from political donors, but still a lot of work to be done.”

Founded in response to the right’s long track record of sophisticated political giving, the Democracy Alliance counts among its secretive membership some of the nation’s foremost left-wing donors, including George Soros and Tom Steyer. In the lead-up to 2016, the group pivoted away from national organizations and toward the states, with an additional priority on leadership by a “new American majority” composed of people of color, LGBTQ people, women and millennials. “A lot of those [ground-level] organizations did not have the staff capacity to absorb large election-year resources,” Montez said.

The Democracy Alliance is resourcing groups through its State POWER Funds, including a vehicle it calls the New American Majority Fund. It’s also working to connect grantees (c3 and non-c3) with “capacity-builders” that can provide technical and legal assistance, including with navigating c3, c4, 527 and PAC compliance. As we’ve written before, that kind of support is both sorely needed and sorely lacking as a crop of post-2016 progressive groups enters 2020 with plans to fight on all fronts.

State-level work is also immensely important on the right. “The average conservative donor who perhaps isn’t comfortable with Donald Trump might find that there’s greater opportunity for change at the state level than the national level,” Bader said. For the conservative movement, working at the state level has both strategic and ideological importance. Strategic, because the conservative movement is a practiced hand at state-level policy advocacy conducted over the long haul via a set of organizations that complement one another and share funders—organizations that include the State Policy Network, the American Legislative Exchange Council and Americans for Prosperity. And ideological, because many conservatives believe in downsizing the federal government and shifting more decision-making power to the states.

As Bader put it, “Attempts to change the electoral college concern me far more significantly than some get-out-the-vote efforts. There are some conservative donors who feel very passionately about not changing how the system was intended to work.” In a similar vein, the Philanthropy Roundtable places a premium on the value of civic education, both as a cause for donors to fund and as a boon to donors themselves. “Voters who understand core principles such as federalism and constitutional rights will be in a better position to assess policy goals and to consider whether concerns are best addressed at the national level instead of through the states or the private sector, including philanthropy,” Kissel said.

Of course, institutions like the electoral college and even the Senate are constituted in a way that currently favors the Republican Party. And as several of our contributors discussed in a piece last fall, “urban, racially and ethnically diverse localities with progressive agendas” have suffered some of the heaviest fallout from state-level preemption of local laws.

4. Protecting the Vote

We hear a lot about threats to a fair 2020 election: Russian hackers, voter suppression, voter fraud, media bias, disinformation through Facebook and YouTube—the list is long, and funders are giving to combat the threats.

According to Montez at the Democracy Alliance, concerns are on the rise from donors that communities of color are being targeted with misinformation, especially online, during the 2020 cycle. Countermeasures could include narrative and messaging campaigns (more on that in a bit), but it’ll be hard to stem the flow of misinformation as long as platforms like Facebook continue to permit deceptive messaging.

An easier lift for interested funders may be to back places like the Campaign Legal Center, a D.C.-based outfit that litigates campaign law and monitors attempts to restrict voter access in the states. The Campaign Legal Center relies on funders from both sides of the aisle to carry out its mission, which it hopes will move from “reactive litigation” toward long-term goals like reconstituting the Voting Rights Act and defanging the plutocrat-friendly vision of free speech espoused in 2010’s Citizens United v. FEC decision.

It’ll be difficult to focus on the long term this year. Election protection litigators like the Campaign Legal Center, the ACLU and the NAACP Legal Defense and Educational Fund will have a lot on their hands as threats to voting rights, like partisan purges of voting rolls, spring up in the states and have to be tamped down in an endless game of whack-a-mole. The good news is that more donations will likely flow to this kind of work as November approaches. The bad news is that to get a real handle on threats to voting rights, advocates need to work around Shelby County v. Holder, a 2013 Supreme Court decision that gutted the Department of Justice’s power to curtail voter suppression in the states.

Nevertheless, there’s a good deal of infrastructure in place to take on state-based challenges to voting access, including legal actors like CLC, collaborative funds like NEO Philanthropy’s State Infrastructure Fund, and the 100+ organizations that make up the Election Protection coalition. Still, the funding situation is far from ideal, given how central all of this is to a healthy democracy. According to Candid, foundation grants to influence voting access and election administration totaled only about $42 million since 2017.

5. Restricting the vote

It’s impossible to discuss protecting the vote without covering the other side of the story. As mentioned, the 2013 Shelby County v. Holder decision made it much easier for state and local jurisdictions to advance voter suppression measures. Voter ID laws in particular have been a flashpoint for those debates, with conservative advocates citing the need to prevent voter fraud while liberals claim discrimination. Judging from progressives’ hopes for a left-leaning “new American majority,” it’s easy to see what has conservatives worried. So far, key groups within this would-be majority—like Latinos and millennials—vote at much lower rates than older, right-leaning whites, and according to many critics, the GOP’s goal is to keep it that way through voter suppression efforts.

Unfortunately for us at Inside Philanthropy, it’s not easy to determine who’s actually funding voter suppression. Some of the money to push voter ID and similar restrictions flows through c4s and other political channels whose donors enjoy a legal right to anonymity. Other contributions are c3-designated, but originate from DAFs with no obligation to disclose their donors. We can, however, guess at the identities of some of the bigger players. Take Art Pope and Robert Mercer, who’ve both shown a willingness to pull any lever—political and philanthropic alike—to advance right-wing ideology and secure electoral wins. Or the funders of Judicial Watch, a watchdog group that litigates to police voter rolls for “fraud,” effectively suppressing turnout among people of color.

The fact that tax-deductible c3 dollars are being used to suppress the vote at all certainly violates the spirit of the law, if not the law itself. “Politics is ugly,” said Bader of DonorsTrust when I asked him about voter suppression. “At the end of the day, [these narratives] are partly an outcome of the Citizens United decision. That frustration has spilled into the c3 world, which is why we’re having these conversations on disclosure.” Bader said he’d rather the conversation focus on the world of political giving—where most efforts around voter suppression take place—rather than philanthropy. When it’s about c3 funding, he said, “that starts to affect the idea that positive philanthropy is part of a free speech expression, which requires tolerance for a lot of people.”

Philanthropy has always backstopped this country’s strong third sector of voluntary associations, a sector that both upholds and benefits from the free speech protection enshrined in our constitution. The challenge we face is two opposing sides, with opposing donors, each of which believe the other is unfairly limiting its own political speech and power. Getting past that deadlock without actually disenfranchising anyone should be top of mind for any funder interested in protecting American democracy.

6. Getting Digital

Competing online is just as crucial as getting organizers out into the field, and the Trump campaign’s massive digital ad buys have progressives worried—that, and the Democrats’ need to compete amongst themselves in the primary while Trump builds momentum for the general election. Without delving too far into political campaign spending, it’s worth noting that there are avenues progressive donors can take to offset the conservative advantage online. For some venture philanthropists, upping the left’s online game is a priority on par with funneling resources to ground-level groups.

According to Sarah Williams at Propel Capital, funders should think of the two strategies as part of a unified push to build power. “People are finally understanding how this kind of organizing and engagement expands the electorate, bringing in high-potential voters whom nobody has talked to before,” she said. The ventures in Propel Capital’s Propel Democracy portfolio include ACRONYM, which runs paid ads, digital media campaigns, and online voter mobilization programs, as well as A/B Partners, a digital storytelling outfit.

The hurdle for progressive nonprofits this year will be to find and hire enough digital communications talent to build out the state-level campaigns that organizers favor. The talent pipeline tends to be gobbled up by presidential campaigns, Montez of the Democracy Alliance told me. “The challenge is finding folks who can do this type of work who live or want to live in states like Michigan or Arizona,” he said.

7. Changing Narratives

As the short-term digital game plays out for the rest of this year, some funders and donor organizers have their eyes on a more elusive prize: narrative and culture change. While those terms do get thrown around a lot, there’s much to be gained by influencing how people think about the election and its consequences.

“Recognizing that there is a need to shift voter perceptions around civic engagement in advance of a cycle, funders have invested in these practices early to meet the needs we anticipate in the year ahead,” said FCCP’s Kristin Purdy. She cites innovative story-driven work by the organizing group Color of Change and the Midwest Culture Lab, a program of the Alliance for Youth Organizing. Donors to Color of Change include the Democracy Alliance and George Soros, while the Alliance for Youth Organizing counts the Ford Foundation and NEO Philanthropy among its supporters.

Ideologically pointed storytelling campaigns designed to drum up activism and get out the vote are only one way funders impact narrative. Funders like the Knight Foundation, Pierre Omidyar and others sustain financially embattled investigative journalism outfits that, by their very nature, combat misinformation and provide the public with a window beyond the agenda-setting of moneyed interests on either side. Something similar can be said for funders of research into issues of political substance.

The line between journalism and propaganda isn’t always as clear as we’d prefer, and the case can be made that ideologically pointed takes are necessary to correct longstanding social attitudes that work against underprivileged groups. That’s certainly the position of many funders on the left working for racial justice, gender equity and LGBTQ rights. On the other hand, conservative funders tend to frame questions of narrative around the need to preserve the American civic model. Funders in Philanthropy Roundtable’s network “often take a long view and see voter education in terms of understanding core principles and institutions of our government rather than where to find the voting booths,” Kissel said.

8. Building Long-term Power

We’ve often pointed to the strategic gulf between conservative funders willing to engage in political giving to defend their values and the liberal mainstream’s tendency to steer clear of politics. The right’s long-term vision and robust state-based advocacy has paid dividends, shifting the body politic away from New Deal assumptions and into a frame of mind favoring laissez-faire economics and Trump’s social policies.

Democrats’ successful push to retake the House in 2018 depended a great deal on progressive donors for whom Trump’s unexpected victory served as a wake-up call. The left is now scrambling to get its act together before this November. But in what can only be a win for philanthropy’s overall effectiveness, funders on both sides are now attuned to the importance of building power over the long term. That manifests in different ways, from libertarian funders’ decades-long support for academics steeped in the free market, to the progressive General Service Foundation’s recent moves to shift its grantmaking toward practices better in line with long-term power-building.

Since 2016, the General Service Foundation has “streamlined [its] application process, increased grant terms, defaulted to general operating support grants and replaced written final reports with phone calls,” said Executive Director Dimple Abichandani. GSF also increased its grants payout and moved its cycle to resource all grantees by June of this year, as well as through next spring. “Funding beyond 2020 is critical, because we know that whatever the outcome of next year’s election will be, there will be a need for increased resources going into 2021,” Abichandani said.

Whatever form these shifts in practice take, and whichever side they benefit, more funders than ever before are thinking about long-term power. That’s certainly the case for donors on the right, whose patience for multi-decade influence-building has paid dividends. What’s less certain is whether the current appetite for long-term power among funders on the left is a consequence of the Trump era or part of a broader turn toward politicized giving across the field. Either way, the 2020 election is only an early act in a much longer drama about interested money in a nation founded on the idea that the common person should have a voice in politics.

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