Ahead of Trump’s inauguration, philanthropy is fueling political activism on the right and left

In just a few days, Donald Trump will return to the White House, and the political activist class is already in full gear. Behind both sides of the political aisle are well-resourced supporters who can fund movements and influence agendas. Beyond outright political donations to candidates and political action committees is a vast array of philanthropies that, while not permitted to get directly involved in politics, can shape ideologies and mobilize support via think tanks, awareness campaigns, protest movements, and legal aid in judicial test cases.

Shortly before the election, the Wall Street Journal probed one example of this growing trend in a lengthy piece that outlined a world of donors and philanthropic organizations supporting conservative causes. They include “election integrity” campaigns, which critics see as shorthand for election denialism. Fast Company contacted seven organizations mentioned in the article. One of them, DonorsTrust, responded.

“DonorsTrust was specifically created 25 years ago to work with self-identified conservative [donors],” says the nonprofit charitable organization’s president and CEO Lawson Bader. He then amends that a tad, calling the donors “conservatarian” to include libertarian-minded givers.

A booming charity tool

DonorsTrust specializes in a type of philanthropy called a donor-advised fund (DAF). DAFs are taking off due to their low overhead costs, generous tax deductions for donors, lenient regulation, and ability to give anonymously. For the uninitiated, DAFs can take a moment to wrap one’s head around. Patrons deposit money in funds, which are administered by a nonprofit sponsor organization. This is a lot cheaper than setting up a full-fledged foundation, but there’s a trade-off. Donors can “advise” a sponsor like DonorsTrust on where they would like the money to go, and the sponsor usually goes along, but donors do not have final say.

DAFs are the fastest-growing charitable vehicle in the U.S. About four-fifths were opened after 2010, with about a quarter starting up since 2020, according to the Dorothy A. Johnson Center for Philanthropy. Their donations have nearly doubled from 2019, hitting about $55 billion in 2023, per the National Philanthropic Trust. Fidelity Charitable, National Philanthropic Trust, and DAFgiving360 (formerly Schwab Charitable) are by far the biggest sponsors, according to research by the progressive Institute for Policy Studies (IPS), with their donors supporting a vast range of charities.

But smaller, ideological-oriented sponsors still move a lot of money. Bader says that DonorsTrust has channeled about $2.3 billion of its contributors’ tax-exempt giving to charities since its founding in 1999. Donors can now select from a menu of about 4,000 organizations that have been nominated by contributors and vetted for their adherence to conservative or libertarian principles. They include think tanks like the libertarian Cato Institute as well as the right-wing student-focused Turning Point USA. Another is the Alliance Defending Freedom, a Christian legal organization that’s defended clients such as cakemaker Jack Phillips and graphic artist Lorie Smith, who both refuse to produce content supporting same-sex marriage. Not all the causes are politics or policy focused; donations also go to disaster relief, animal shelters, and religious organizations (mostly Christian).

DAFs aren’t just a tool of the right. Bader says that DonorsTrust was modeled on the progressive Tides Foundation, which was founded in 1976 and aims “to shift power and resources to marginalized communities,” according to executive director Peter Martin. Through DAFs and other fundraising, Tides backs “initiatives,” such as the Healthy Democracy Fund, whose purpose is, “to close the voter turnout gap for marginalized communities,” says Martin.

That includes what Tides’ chief partnerships officer Dan Shannon calls, “nonpartisan civic engagement activity” in support of eight state and local ballot measures on abortion rights, cannabis, and legislative redistricting in the 2023-2024 election cycle. Another initiative, Resist Project 2025, funds efforts to counteract potential Trump administration policies based on the policy blueprint created by the nonprofit Heritage Foundation. (Trump claims to have no connection to the project.) While most Tides funding goes toward what Shannon calls “social Justice organizations,” donors also support other causes, such as art education for high school students.

Tides offers DAFs as well as other ways to give, such as one-off individual contributions to its initiatives. It’s granted about $5.9 billion to nonprofit organizations since 1989, with about 65% of that flowing through DAFs.

Is it dark money?

The IRS requires DAF sponsors to list all the nonprofits that they contribute $5,000 or more to and to specify the total amount each receives. But they aren’t required to disclose individual grants or which donors provided the funds. “We are oftentimes criticized for being a sort of dark money thing,” says Bader, “but the anonymity is left to the donor entirely.” Traditional foundations have to report what organizations they fund directly, but they can also funnel their money through a DAF, hiding what they support.

“This is what has caused a lot of confusion around, on the right, obviously, who’s funding Project 2025, who’s funding coordinated right-wing organizing efforts,” says Bella DeVaan, associate director of the Charity Reform Initiative at IPS.

DonorsTrust funders can also anonymously support The Heritage Foundation, which produced Project 2025. (Bader says that most grants to Heritage or other organizations are “general operations grants,” and he does not know how Heritage chooses to spend them.)

“But also, I think you’ve seen Republican concern . . . about the Tides Foundation putting money into groups that are supportive of campus encampments,” protesting the war in Gaza, says IPS’s DeVaan. For instance, Tides has funded the organizations Jewish Voice for Peace and IfNotNow. Critics, such as the Anti-Defamation League, have accused these groups of promoting antisemitism. Shannon contends that the funding was distributed prior to the 2023 Hamas attacks on Israel, but adds that Tides supports free speech for the organizations it funds and calls protest a valid form of activism.

A March 2024 survey sponsored by IPS and the conservative-leaning Giving Review indicates support for transparency across ideologies. Ninety-two percent of those who identified as “left,” 84% as “moderate,” and 74% as “right” agreed strongly or somewhat that wealthy donors who receive tax benefits should have to report large contributions, due to the influence they can have on nonprofits. But they didn’t have much context: Only 17% of the 1,005 American adults who took the survey had even heard of DAFs.

Is it political?

DAF sponsors and many other tax-exempt nonprofits that fall under a section of the U.S. Internal Revenue Code called 501(c)(3) are prohibited from “participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.” But there’s a wide gray area. The Heritage Foundation, itself a 501(c)(3), doesn’t specifically endorse Donald Trump as president. But Project 2025, authored by Trump administration veterans, many of whom may return this year, lays out a detailed agenda specifically for a conservative administration.

Tides, meanwhile, is accused of partisanship due to some of its biggest backers. For instance, Open Society Foundations, founded by polarizing Democratic megadonor George Soros, reports contributing more than $20 million to the Tides Foundation over the years.

The lines get blurrier with DAF support for so-called “social welfare” organizations classified under the next section of the tax code, called 501(c)(4). (The Tides Foundation, for instance, has a sister organization called Tides Advocacy that falls under this category and has also received tens of millions of dollars from Open Society.) Social welfare organizations are allowed to spend unlimited money on lobbying and typically up to 50% supporting or opposing political candidates. (Although a recent 5th Circuit Court of Appeals ruling might ultimately restrict this spending.) Social welfare groups don’t have to reveal their contributors, even the DAF sponsors such as DonorsTrust or Tides, creating two levels of anonymity for DAF donors.

A nonprofit such as a DAF is allowed to contribute to a social welfare organization, as long the money is designated for nonpolitical work “[For] the Healthy Democracy Fund, about half of our grants this year went out to 501(c)(4) [organizations] for their charitable, nonpartisan activity,” says Peter Martin of Tides. “We find that to be a very valid, valuable use of charitable 501(c)(3) resources.”

On the right, Turning Point USA, for instance, is a 501(c)(3) charity but has a social welfare sister group called Turning Point Action, which is a clear supporter of Donald Trump. Charlie Kirk, the founder of both organizations, even addressed the latest Republican National Convention.

Unlike Tides, DonorsTrust says that it does not allow any donations to social welfare organizations. “It may be possible, but that’s like threading the proverbial camel through the eye of a needle and pretty much impossible without extreme tax risk to the DAF provider,” says Bader.

Calls for reform

The biggest complaint against DAFs isn’t their spending—it’s actually their lack of spending. Unlike traditional foundations, which are required to spend a portion of their funds each year, DAFs can hold onto their money indefinitely—even though donors get a tax deduction the year they put the money into the DAF.

In this respect, ideologically driven DAFs are setting a shining example. On average, Tides DAFs pay out 54% of their funds each year, says Shannon. At DonorsTrust, it’s between 60% and 100%,” according to Bader.

Failed bipartisan bills, known as the ACE Act, would have regulated DAFs and foundations more tightly, such as requiring DAFs to pay out at least 5% of funds per year. They also had some transparency measures, such as requiring foundations to reveal the money they funnel through DAFs.

In 2024, IPS launched a campaign called Donor Revolt for Charity Reform, endorsed by “nearly 350” philanthropists, says DeVaan, pushing for even stricter legislation. That includes requiring individual DAFs to reveal the organizations that they fund. While the organization is working to build support with politicians, nobody on Capitol Hall has come out to express support for the campaign, Davaan says.

For now, DAFs will continue allowing donors to anonymously fund any cause—from animal shelters to protest movements and think tanks developing political agendas.