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Steve Bannon and the Perils of Nonprofit Involvement in Government’s Business

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Steve Bannon and the Perils of Nonprofit Involvement in Government’s Business

The Chronicle of Philanthropy August 31, 2020
OtherPhilanthropy

Former White House adviser Steve Bannon’s indictment raises obvious questions about the integrity of a man who, along with his alleged co-conspirators, is accused of siphoning funds for personal use from the nonprofit they set up to help fund the Trump administration’s border wall. But their actions also raise another, less obvious question about whether nonprofits should play a role in funding government programs.

That, after all, was the public premise of Bannon’s We Build the Wall GoFundMe campaign. It promised to direct 100 percent of funds toward building a wall to limit illegal immigration along the U.S.-Mexico border — a central promise of Trump’s 2016 presidential campaign and one likely to elicit donations from the president’s supporters. Indeed, the campaign is said to have raised $25 million and then transferred the money into a charity controlled by Bannon — Citizens of the American Republic, which served as the vehicle for sending funds to the federal government.

Such an arrangement, even if Bannon and his compatriots had not allegedly siphoned off funds, is an unhealthy precedent for American democracy and a truly independent “independent sector.” Government budget decisions must be made democratically through the deliberations of those elected to office. For nonprofits to put their fingers on the scale of government appropriations risks distorting the will of the people.

That doesn’t mean such arrangements should never be permitted. But to have legitimacy, they need to be backed by democratically supported legislation. Charter schools, for example, are allowed to supplement government funding with private donations — an approach legitimized by typical state charter-school legislation, which provides government funding for operations but not for the school buildings themselves. This has stoked controversy, including the charge that charter schools are the product of what educator Diane Ravitch famously called a “billionaire boys’ club.”

Continue reading the entire piece here in The Chronicle of Philanthropy

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Howard Husock is a senior fellow at the Manhattan Institute, where he directs the Tocqueville Project, and author of the new book, Who Killed Civil Society?

Photo by Sean Gallup/Getty Images

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