The Heritage Foundation, a conservative think tank spearheading the ambitious “Project 2025,” is being bankrolled by a growing network of mysterious charity groups. These groups, known as donor-advised funds (DAFs), are operated by the nation’s leading financial firms, exploiting a legal loophole to conceal their ultra-wealthy donors.
DAFs
Since 2020, DAFs have funnelled over $18 million into the Heritage Foundation’s coffers. This figure continues to swell, according to a recent analysis by Lever and research from the Institute for Policy Studies.
Wall Street is aiding the nation’s elite in channelling vast sums to extremist causes, all while maintaining the secrecy and avoiding tax repercussions. Moreover, these firms are spending millions to lobby Congress to preserve this opaque system.
Unlike traditional philanthropic giants which must disclose their donations and recipients, DAFs offer donors anonymity and tax advantages. Once the money is deposited into a DAF, the donor can direct it to any charity, with the source and amount completely obscured.
The Heritage Foundation, like other nonprofits, is not required to disclose its private donors. However, DAFs provide an additional veil of secrecy, along with unique tax benefits. Financial firms that manage these funds also benefit, incentivizing them to market DAFs to their affluent clients.
While DAFs cannot directly fund political campaigns or politicians, they are part of a larger network where the lines between charity and political activism are increasingly blurred. The Heritage Foundation, for instance, can receive donations from DAFs and then route money towards political campaigns through its “sister” dark money arm, Heritage Action for America.
The escalating role of anonymous affluent donors in funding the Heritage Foundation’s expansive right-wing political project raises concerns about the impact of DAFs on democracy. The Internal Revenue Service (IRS) held a public hearing to discuss proposals to tighten regulations around DAFs, but none of the suggestions addressed increasing donor transparency.
Unlike private charitable foundations, DAFs have no deadline for disbursing funds, allowing money to accumulate indefinitely. This arrangement benefits both the original donor and the financial corporations managing the funds.
Project 2025 and Wall Street
The proliferation of DAF schemes contradicts the public benefit intended by tax-deductible charitable donations. The purpose is to serve the common good, not advance personal agendas. Yet, the money donated to the Heritage Foundation is now fuelling Project 2025, a political initiative pushing for a radical reimagining of the country under a second Trump presidency.
Efforts to enhance DAF transparency have faced stiff resistance from Wall Street firms and philanthropic advocates. From 2021 to 2023, investment firms and philanthropic groups spent over $4.6 million lobbying against charity reform. The Accelerating Charitable Efforts (ACE) Act, which proposed reforms including penalties for undistributed assets, was met with fierce opposition and ultimately failed.
The success of Project 2025 could further entrench the opacity of DAFs and the broader dark money ecosystem. The initiative’s policy proposals include overhauling the tax system, limiting tax enforcement resources, and weakening the Federal Election Commission’s authority, potentially exacerbating the influence of money in politics.
Advocates for transparency argue that congressional action is needed to address the issue, as regulators like the IRS have limited power to curb dark money in philanthropy. The call for more transparency in all dark money and DAF operations is growing louder, but the path forward remains uncertain amidst the powerful interests at play.
Source:
Dark Money Just Got Darker: Wall Street Helped Fund Project 2025
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