Nonprofits: The Scam of the NGO is Bigger Than You Think

Making a Mountain out of a Mountain

This may come as a shock, but sometimes Elon Musk gets carried away when he makes some of his claims, such as when he said the Wisconsin Supreme Court race last year could affect the entire destiny of mankind.

Not that he was out of the ballpark altogether. The election of Susan Crawford likely won’t bring western civilization as we know it to an end, but it just might be the end of the line for prosperity and freedom here in Wisconsin for a long, long time. After the court’s most recent decision, all of us in Wisconsin are living in a giant bureaucratic jail cell, and the wacko court is your new parole board.

So yeah, Elon was onto something.

He was also onto something back in March when called government-funded nonprofits “a gigantic scam, like one of the biggest, maybe the biggest scam ever.”

On this one Musk was not only in the ballpark, he smashed a home run. In fact, this time Musk may be understating the threat. Government-funded NGOs (Non-Governmental Organizations) are not only swindling the American taxpayer by heisting billions of dollars out of our pockets to directly support a hefty menu of left-wing parlor games, they have also come to represent what has been correctly called a fifth branch of government.

They are central to the scheme of money laundering that keeps the bureaucratic collectivist state lubricated and humming along.

At long last, in the new Trump administration, a day of reckoning may be coming. At least the dirty laundry of NGOs is being brought out of the closeted hamper. To be sure, it’s been a rough few months for left-wing nonprofits since Musk made his remarks, and it doesn’t look like things are going to get any better for them any time soon.

There may be a set of rogue federal judges trying to desperately prop up the quickly degrading myth that most government-funded nonprofits are neutral and dedicated organizations providing valuable services to needy communities, but that line of defense is rapidly crumbling.

Rather, the fact that many of the largest nonprofits are cogs in a gigantic political machine whose very existence poses a lethal threat to democratic governance is being exposed in multiple venues. In June, Congress’s DOGE (Department of Government Efficiency) committee zeroed in on nonprofits and substantiated many of Musk’s claims. The Trump administration has also tried to whack billions in contracts with nonprofits, and, while a few federal judges have sidetracked some of those efforts so far, the briefs in the case show without question that many nonprofits are merely vehicles for taxpayer-funded pursuits of radical, extremist agendas.

Last week the volley continued when the House Judiciary Subcommittee on Oversight held yet another hearing to display just how the well-oiled machinery works—“How Leftist Nonprofit Networks Exploit Federal Tax Dollars to Advance a Radical Agenda”—and examined a paper trail of corruption that leads right back to globalist grifters.

All well done, but here’s the most important point of this column: None of this is new. It has all been exposed, and buried, before. Way back during the Obama administration, the GOP-minority staff delivered a blistering report exposing the same network, but nothing ever happened. That’s partly because Barack Obama was president and Donald Trump wasn’t, and because the corporate media’s credibility had not yet imploded in such spectacular fashion.

This time, this fraudulent scheme must not only be exposed but the network demolished. The point about the survival of this vital cog in the bureaucratic machine goes way beyond demonstrating the depth and resiliency of the deep state, and the degree to which the federal treasury has been pilfered. It goes to the way the left is deconstructing democracy itself through gaslighting and graft.

To say it another way, the NGO network is the beating and fraudulently bleeding heart of a massive movement to seize all power for the progressive left. The constitutional stake must be driven right through it.

That guy again

On July 15, right at the outset of the hearing on leftist nonprofits, subcommittee chairman Jefferson Van Drew (R-New Jersey) offered a sweeping indictment of the government’s grant economy and its nonprofit infrastructure.

In just a few short minutes, he laid out the essentials of what we really need to know.

“Today’s hearing will expose how leftist nonprofit networks hijack and exploit your federal tax dollars to advance a radical agenda,” Van Drew said. “Your tax dollars, your money, money that you earned and you worked hard for have been funneling into left-wing nonprofits pushing extremist causes.”

That assertion wasn’t just speculation, Van Drew asserted.

“It’s not just an idea,” he said...

Regardless of what one’s opinion of the ideology is, Van Drew said, it is an abuse of power, and one that has been quietly restructuring American society in ways no one asked for and they certainly never voted for.

“The last administration dispersed $3 billion to a migrant housing group whose employees were accused of sexually abusing children,” he said. “Nearly $1 million went to a group linked to riots in Los Angeles. Over $1.8 million meant for women’s safety overseas was instead used to promote gender ideology through LGBTQ+ grants.”

Van Drew fingered globalist billionaire George Soros as a ringleader in the non-profit scheme.

“And then there’s the biggest culprit of them all, the mastermind, the guy behind the curtain, the guy in the dark, George Soros,” he said. “Who is he? What’s he about? He’s not just another billionaire with strong opinions. We got plenty of them. He’s the architect of an international leftwing influence machine. His Open Society Foundation sits at the center of a global web of nonprofits, grant recipients, political operatives, and shadow partners.”

Despite his vast wealth, Van Drew said, Soros also takes our tax dollars.

“The Vera Institute of Justice, Soros connected, received over $60 million in federal contracts from Democrats,” he said. “Impact Justice, also Soros connected, took in over $30 million to push weak-on-crime agendas instead of prosecuting criminals.”

Beyond the efforts of Soros, Van Drew said Democrats funneled over $1 billion in DEI-related (Diversity, Equity, and Inclusion) grants through the Department of Education.

“They sent taxpayer funds to anti-Israel groups and climate radicals determined to dismantle American energy independence,” he said.

Van Drew said the hearing wasn’t just about spreadsheets. He then got to the real point about the existence of the NGO network: “It’s not just about budget line items. It’s about who controls the country. Unelected billionaires or the people who live, vote, and work here. It’s about restoring accountability and ending ideological freeloading on the taxpayers’ dime.”

In testimony, the subcommittee heard from Scott Walter, the president of Capital Research Center, who explained the many pernicious ways grant recipients bully their way into getting what they want politically. For example, Walter testified, nonprofit grant recipients aren’t afraid to bite the hand that feeds them.

Walter also called federal funding of politically active environmentalist groups “a vast morass of corruption”: “[T]he Climate Judiciary Project [is] run by the Environmental Law Institute—an institute that from 2021 to 2024 enjoyed millions of dollars of awards for grants and contracts from the Environmental Protection Agency (EPA); the Departments of Justice, Homeland Security, Agriculture, and State; and the National Science Foundation.”

Its Climate Judiciary Project is allegedly ‘educating’ federal and state judges about climate change and related litigation designed to extract billions of dollars from energy companies, Walter testified.

Tyler O’Neil, a writer for The Daily Signal, testified that, while direct grants and contracts from the federal government to left-wing activist groups rightly draw attention, government union funding often flies under the radar.

“About a quarter of federal employees are union members, and the major government unions don’t just negotiate for perks like working from home,” O’Neil testified. “They also bankroll the same leftist groups that sent staff and policy recommendations into the Biden administration, using the bureaucracy to force leftist ideology on the American people.”

According to O’Neil’s testimony, the Service Employees International Union gave $1.6 million to New Venture Fund, which he called a dark money pass-through nonprofit that cloaks which donors give to which projects, from 2013 to 2022.

“SEIU also gave $5.2 million to Sixteen Thirty Fund, New Venture Fund’s sister nonprofit, from 2013 to 2023,” he testified. “The union gave $1.8 million to the Tides Foundation, another dark money pass-through nonprofit that supports anti-Israel rioters, among other things, from 2012 to 2016. The SEIU also gave $1.1 million to Tides Advocacy Fund (a sister of Tides) from 2011 to 2019.”

The ultimate implication is, the nonprofit scheme exists not just to effectively steal taxpayer cash for the globalist enterprise. It does that, but in addition it works as a methodically constructed machine whose job it is to run the government. We know the truth now that the Biden White House was run by Biden’s small circle of senior advisors, with the help of Jill Biden, Hunter Biden, and a few cabinet officials. That’s scary enough, but what’s even scarier is that the government could—and has—run without any of them. The collectivist government-nonprofit-foundation-globalist corporate enterprise makes policy and law and lines its own pockets, virtually untouched, and has done so for years.

At a June 4 DOGE hearing chaired by Rep. Marjorie Taylor Greene (R-Georgia), which also focused on NGOs, Greene said the corrupt ties that bind left-wing NGOs, Democrat elected officials, Democrat political appointees, and deep state bureaucrats had exploited the taxpayer purse to achieve policy ends opposed by the very Americans forced to fund them.

That intricate web of connections is how elected and appointed Democrat officials and allied NGOs work together, Greene alleged.

“Federal agencies fund the NGOs and the NGOs shape the agencies’ behavior,” she said. “It can be hard to tell where the government ends and the NGO begins. The non-profits essentially serve as an arm of the government. To put it another way, if the permanent bureaucracy is the de-facto fourth branch of government, then these leftist NGOs are the fifth.”

Who needs a White House when we have the Deep State

All of this is shocking, shocking, as they say, but what’s even more shocking is that it was all exposed more than 10 years ago during the Obama administration. Naturally the media shunned the truth, the implications of which go deeper than even the lawmakers at recent hearings may have been realized.

How deep this deep state “club” operates was thoroughly substantiated in a startling and comprehensive 2014 report by the GOP minority staff of the United States Senate Committee on Environment and Public Works, “The Chain of Environmental Command: How a Club of Billionaires and Their Foundations Control the Environmental Movement and Obama’s EPA.”

The congressional report asked (just as Van Drew did two weeks ago): Just who is calling the shots? In answering that question, the authors provided what they called a textbook case of a powerful consortium of special interests, government bureaucracies, and foundation-funded media, all of which worked to elude congressional authority and enact laws by executive fiat. Though they perhaps underestimated the role of EPA bureaucrats, that’s quibbling. What they did, without even knowing it, was glimpse the collectivist bureaucracy at work, by any other name.

Here’s how the authors described it: “In reality, an elite group of left-wing millionaires and billionaires, which this report refers to as the ‘Billionaire’s Club,’ directs and controls the far-left environmental movement, which in turn controls major policy decisions and lobbies on behalf of the U.S. Environmental Protection Agency (EPA).”

The committee’s staff members recognized the ‘club’ as the potent political machine it was, and they were able to peel away enough layers of media camouflage and organizational dissimulation to both witness and understand the critical nature of the internal transactions taking place.

“The evidence provided in this report highlights the lengths the far-left environmental movement goes to hide sources of funding and to disguise their actions—bought and paid for by millionaires and billionaires—as charitable acts in service of their fellow man,” the authors wrote.

The starting point, the authors stated, was an exclusive group of wealthy individuals who directed and funded the far-left environmental movement. Among them were the Rockefeller Brothers Fund, the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, the Schmidt Family Foundation, the Sea Change Foundation, the Park Foundation, and the Marisla Foundation. And unlike most foundations, the report continued, those private foundations did not generally donate to altruistic or philanthropic causes but engaged in “prescriptive grantmaking,” whereby they funded nonprofit beneficiaries whose actions and work fit their environmental agendas.

All of the beneficiaries were leftist environmental organizations.

In addition to the foundations, Billionaire’s Club members donated directly to public charities, the report continued, and the charities receiving the most were those with affiliated organizations that engaged in activities designed to influence elections and that had no restrictions on lobbying efforts. To be sure, the funds going to those affiliates had to be earmarked for charitable activities; however, significant benefits accrued to the beneficiary, the authors asserted.

“While the law requires a clear separation between the activities of the (charity) and the (affiliate), evidence suggests that in numerous instances, (they) share the same space, staff and board members,” the report stated.

In practice, then, the funds were paying the staff and overhead—the main freight—of the lobbying affiliates. What’s more, many of the charities self-identified as activist organizations, including the Natural Resources Defense Council, Sierra Club, Environmental Defense Fund, League of Conservation Voters, Greenpeace, Center for Biological Diversity, National Wildlife Federation, and the World Wildlife Fund, all of whom, the report stated, acted as the public face of the environmental movement.

Another technique used by the foundations to fund favored charities was to serve as the charity’s fiscal sponsor, the authors observed, whereby the sponsor sold its nonprofit status to a group for a fee, and the sponsor receiving the fee served as an official recipient for the group’s charitable donations. There are various reasons why some groups used fiscal sponsors—some didn’t have tax-exempt status; others did but wanted the administrative and political benefits of working under a coordinated umbrella.

So, the report contended, there was an extraordinary nexus between a wealthy elite, their private foundations, and public charities—all carrying the water for a so-called grassroots environmental movement, and doing so with significant tax advantages. It was classic bureaucratic collectivism, the way wealthy corporate interests and their corporate-sponsored foundations allied with leftist identity groups and nonprofits to achieve political clout and influence. Whereas in the old days of robber barons, old-fashioned crony capitalists merely bought their politicians in back rooms where the only smoke screen came from the puffs of cigars, these days uber-wealthy corporatists have put down the tobacco and picked up special-interest identity groups and nonprofits, aka “grassroots movements,” to blow their political smoke.

Many of those groups worked in tandem through centralized entities designed to coordinate the goals and activities of the special-interest donors and the special-interest environmental identifiers.

“One of the central planners in environmental strategy is the Environmental Grantmakers Association (EGA), but they are not the only force out there,” the report stated. “The Democracy Alliance executes a complimentary but larger-scaled effort to funnel funds into far-left political outcomes, which encompasses the same desired environmental policies as EGA. Finally, the Divest/Invest movement employs moral sentiments to pressure like-minded foundations to divest from fossil fuels, and invest in charity or renewable projects. Each of these groups has directed foundation dollars towards a specific and coordinated political agenda, which is then executed by environmental activists and so-called grassroots organizers.”

For example, the report continued, EGA has nearly 200 members, and, in 2011, EGA member organizations collectively donated about $1.13 billion to environmental causes, or 40 percent of all foundation giving. Its members include the Tides Foundation, William & Flora Hewlett Foundation, Wallace Global Fund, Schmidt Family Foundation, Rockefeller Brothers Fund, Inc., Marisla Foundation, David and Lucile Packard Foundation, and Gordon and Betty Moore Foundation.

In its latest update, as of 2022, its membership had expanded to more than 200 foundations, and that year EGA members gave a record high $2.7 billion to environmental causes.

In the truest fashion of old-style politics, then, the special interests are funneling political money and mobilizing to achieve a political result. But, unlike in the old days of smoke-filled rooms, when special interests would throw their efforts into funding and electing puppet politicians, these days they’re not interested so much in influencing elected officials. Instead, and this is a critical distinction, it’s the bureaucracy the special interests want to curry favor with.

Of course there’s all sort of cross-pollination. The Billionaire’s Club achieved many of its successes through the ‘capture’ of key EPA employees, the authors concluded. So powerfully funded special interests manufactured the bureaucrats and then provided feathered beds to keep them happy and safe, just like they used to do with elected officials, all the more important since the bureaucrats have become de facto lawmakers in the regulatory state.

Meanwhile, not only were members of the billionaire’s club reaping huge tax benefits, but the government itself was further fueling the nonprofit axis with other grants: Under President Obama, the report stated, EPA gave more than $27 million in taxpayer-funded grants to major environmental groups such as the Natural Resources Defense Council and Environmental Defense Fund and others, as well as hundreds of thousands of dollars to lesser-known extreme groups such as the Louisiana Bucket Brigade, despite challenges by state regulators.

Moving away from the ledge

With such a thriving network working so hard for so long—and with no one confronting it even after it was exposed in 2014—it’s no wonder the federal government is so powerful and, in so many ways, totalitarian.

The question is, now that it has been exposed again, what is to be done?

Actually, at least as a starting point, Vice-President JD Vance offered some thoughts on that very question before he was even a senator. Back in 2021, Vance had grasped what was going on in the nonprofit trenches.

As such, he asserted in multiple talks that “all across our country, we have nonprofits, big foundations, that are effectively social justice hedge funds.” He also penned an op-ed for Newsweek entitled “Stop Treating Left-Wing Advocacy Groups Like Charities.”

In his piece, Vance produced even more examples of the nonprofit scam, pointing to the Ford Foundation specifically.

“…While theoretically dedicated to charity, the president of the Ford Foundation, Darren Walker, has been on the board of some of America’s largest and wealthiest corporations, and collects well over $1 million a year in various forms of compensation,” Vance wrote. “Meanwhile, the foundation he runs possesses $16 billion of assets. Left-wing activism pays very well, it turns out, so long as it’s packaged as charity.”

Vance pointed out that the Ford Foundation was hardly alone but was “merely one fish in an ocean of endowments and foundations dedicated to left-wing causes.” He also understood the damage these enterprises do, in addition to grabbing taxpayer dollars:

Vance wrote that the “dirty little secret” of well-endowed leftism was that it depended on special favors from the government.

“Thanks to its endowment, Harvard operates as a hedge fund with a university on top,” he wrote. “But the difference between Harvard’s endowment and any other hedge fund is that normal hedge funds pay substantial taxes and Harvard pays almost nothing. That’s right: when you call your hedge fund a charity, you get to pay your employees exorbitant salaries, accumulate billions in financial gains and then avoid any tax.”

Vance said the only thing to do was tax the assets of the foundations, and shrink their size over time.

“It’s preposterous that my middle-class aunt pays a higher tax rate than the $41 billion Harvard endowment,” he wrote. “But the power of these institutions also creates a massive left-wing bias at the heart of our society. The Left has stashed a trillion-dollar war chest and protected it from ever paying a nickel in tax.”

Why should Harvard pay nothing while a married couple with three kids pays a lot? Vance asked.

The then Senate candidate proposed that any charitable organization with an endowment over $100 million must spend 20 percent of its endowment each year, or else lose its nonprofit status and the preferential treatment of its income, which Vance argued would allow colleges and other secular nonprofits to maintain an endowment without accumulating a war chest of money.

Others have also proposed much tighter rules for qualifying as a nonprofit in the first place, and to heavily penalize activities not directly related to their core mission. There are other ways for corralling the power of the nonprofit sector, but cutting them off from government funding must be at the heart of any reform.

Otherwise it’s all performative. As Vance wrote:

Amen to that.