"Uncharitable Think Tanks" by Faith Stevelman

Alternate Title

Uncharitable Think Tanks

Faith Stevelman, New York Law SchoolFollow

Keywords

Business Organizations Law, Environmental Law, Law and Politics, Law and Society, Nonprofit Organizations Law, Oil Gas and Mineral Law, Taxation-Federal

Abstract

As people debate whether the Heritage Foundation’s Project 2025 is good policy, what’s being overlooked is that it’s likely unlawful as the work product of a charitable think tank. (Think tanks nearly always are qualified as charities under the tax code.) To reinforce think tanks’ educational mission, tax law sets rigorous content requirements for their materials. It also bans them from campaigning, sharply limits their lobbying, and prohibits their benefiting private parties. The doctrines are intended to keep think tanks charity-worthy educators, but they have not succeeded.

Ironically, the failure reflects other features of tax law that incentivize using think tanks as politicized advocates. Tax law offers donors anonymity and offsets the cost of donations through the charitable deduction. And because think tanks are government-approved educators, their messaging enjoys enhanced credibility, hence often greater influence. No other advertising, lobbying, campaigning vehicle, or even other nonprofit form, confers this set of advantages.

Part I lays out the paradigm of charitable education that is intended to govern think tanks’ affairs. To provide a contrast with the modern ones, it presents a portrait of old school think tanks—described as “universities without students.” Next it explores the historic difficulty of finding legal rules to define charitable education for public-facing speakers like think tanks.

The factual core of the Article, Part II, describes think tanks that publish climate denial and obstruct climate-friendly laws. It is the first account of such think tanks in legal scholarship—a void that’s surprising because the phenomenon is ongoing since the 1990s. The facts reveal the need to reform think tanks’ status in tax exempt law. They also tell a story of importance in itself—how government subsidized, formally charitable actors have thwarted understanding of climate change and stymied positive law reforms. The facts provide a foundation for future research in climate law, lobbying and campaign finance, and political theory and sociology.

In another scholarly first, Part III applies each of the four core doctrines for charities to think tanks. In addition to flouting the content standards for charitable education, it finds think tanks persistently benefit private persons, engage in banned campaigning, and lobby beyond their limits. This conduct all violates the legal standards for charitable educators. Accordingly, Part IV proposes that the IRS should recognize modern think tanks as § 501(c)(4) nonprofits, not charities. As § 501(c)(4)s, they could be bold advocates without violating the law. The educational speech, private benefits, lobbying, and even most campaigning limits would fallaway. No longer government-endorsed educators, they would have to earn their influence. Nor would donors receive tax deductions for gifts. Section501(c)(4)s think tanks would still provide donors anonymity, but at least politically active § 501(c)(4)s are receiving scrutiny from law reformers. The use of charitable think tanks as conduits for dark money, in contrast, has remained invisible until now.