The U.S. Supreme Court building in Washington, DC, on May 17, 2021.
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isThe Ark’s money has reached the Supreme Court: Donors are increasingly putting money into what are called donor-advised funds, which function like piggy banks for giving to nonprofits, which then channel the money to legally savvy nonprofits that can help pay attorneys’ fees, submit briefs and, donors surely hope, influence decisions.
The best part about this is that nonprofits can hide the identity of their donors because individuals don’t give directly to nonprofits, but instead move the money through intermediary funds. According to 2022 tax returns, the most recent year available, donors have sent more than $48 million through donor-advised funds to groups with major cases before the Supreme Court this season. That represents 44% of all money that went to these groups, which reported spending $26 million on litigation.
Despite the lack of transparency, names sometimes slip through. For example, billionaire Hobby Lobby founder David Green has acknowledged giving to two major donor-advised funds, the National Christian Foundation and the Servant Foundation. The two organizations sent $32 million in 2022 to the Alliance Defending Freedom, the legal group behind the lawsuits that sought to overturn Roe v. Wade and restrict abortion this term. The amount Green donated remains a mystery.
Other lightning rods for the right – the Kochs, Olins, DeVos, Saar and Bradleys – are all connected to Donors Trust, a donor-advised fund provider that funnels money to conservative causes. One of the main beneficiaries is the New Civil Liberties Union, a right-wing group involved in lawsuits over guns, social media platforms and the federal bureaucracy. The New Civil Liberties Union received 21% of its total budget of $4.8 million in 2022 from Donors Trust. Donors Trust CEO Lawson Bader said the group is “not directly or indirectly involved in any cases before the U.S. Supreme Court,” even after Forbes pointed out that groups like the New Civil Liberties Union have received millions of dollars from people with Donors Trust accounts.
Donor-advised funds are a growing philanthropic trend, even among people who aren’t interested in putting money into politics. One selling point is that donors can give a lump sum to a fund, receive an immediate full tax deduction, and then watch their contributions distribute over an unlimited number of years. Billionaires Mark Zuckerberg, Elon Musk, Larry Page, and Paul Singer have all welcomed donations to donor-advised funds, and more frugal people can also access them. Fidelity, Charles Schwab, Vanguard, Morgan Stanley, and Goldman Sachs all have affiliated charities that offer donor-advised funds to the general public. Annual contributions to donor-advised funds will more than double from 2018 to 2022, to $85.5 billion, according to the National Charitable Trust.
This suggests that more and more money will continue to flow to these groups and there will be less transparency about who is funding some of the country’s most important litigation.
