When Donald Trump publicly vowed one year ago to revoke Harvard University’s tax-exempt status, a step lacking in any colorable legal basis, he sent a shock wave through America’s nonprofit and philanthropic community. It was part of a multi-fronted onslaught that included investigations, loose talk of confiscating endowments, and even a move to purge ideologically unwelcome nonprofits from the public service loan forgiveness program. In 2021, vice-president-to-be J.D. Vance, then running for an Ohio Senate seat, said that while the Ford Foundation, the Gates Foundation, and Harvard “pretend to be charities” and get corresponding tax treatment, they are “fundamentally cancers on American society.”
There is a contrasting story to be told, though, about how the freedom to give without asking government permission or approval has given America a $600 billion philanthropic sector with unique accomplishments in advancing science, health, education, religion, and culture, among other endeavors – no other country comes anywhere close to matching it.
Last month, Cato convened a panel at its headquarters to discuss, in the words of moderator Maria Santos Bier, who directs foundation and corporate relations at Cato, “some of the threats to philanthropy today and what shared principles can safeguard it.” Attended or watched by many in the philanthropic and nonprofit worlds, the event was covered in the Chronicle of Philanthropy under the headline “Left and Right Join to Defend Nonprofit Rights.”
Joining us were two major figures in contemporary American philanthropy: Lawson Bader, president and CEO at DonorsTrust, which helps right-of-center benefactors create donor-advised funds (DAFs), and John Palfrey, president of the John D. and Catherine T. MacArthur Foundation, known for supporting many progressive causes. I was on the panel as well.
Much common ground was in evidence: on the importance of neutral and impartial law to govern the nonprofit and charitable world, on the strong spillover benefits of the sector, and on the dangers to be apprehended from government encroachment and arbitrary official action.
Palfrey called the philanthropic sector part of “what makes America so distinctive” and joined Maria Santos Bier in discussing how Tocqueville saw Americans’ habits of voluntary association as essential to its fledgling democracy. While MacArthur’s grantmaking has often brought it under criticism from varying quarters, he said the latest developments have meant that the rule of law “has needed to be defended in ways I didn’t expect.”
Palfrey expanded on these points in his 2025 MacArthur President’s Essay, several of whose themes were also explored by Bader in a widely noted essay late last year. In that piece, Bader called Trump’s move against Harvard “a political attack” on “the entire framework of American charitable independence…. History teaches that when politicians exploit the tax code to punish ideological opponents, civil liberties suffer.”
At the Cato panel, Bader noted that policy attacks on philanthropy used to come mostly from the left end of the spectrum, particularly in measures aimed at curtailing donor privacy (in the 1958 case of NAACP v. Alabama ex rel. Patterson the Supreme Court recognized some such rights as grounded in the First Amendment, with echoes that have continued through the present day). Now, he noted, at the state level, “there are just as many Republicans demanding to see donor lists as there are Democrats.”
But if fellow conservatives decide to cheer the “weaponization of government power” against philanthropy, Bader warned, “it’s only going to come back to haunt us.” Private philanthropy is crucial in providing alternate sources of support for those who may be cut out of governing circles: “Having independent sources of power in this country is the basis of a free society.”
You can watch here.