The Republican chairman of the powerful House Ways and Means Committee has raised concerns about donations made from a liberal philanthropy to the U.S. Chamber of Commerce, suggesting that the gifts call into question how the two organizations are using their tax-exempt status.
In a Monday letter, Rep. Jason Smith of Missouri wrote to leaders of the U.S. Chamber of Commerce and its associated foundation asking for details about $12 million the organizations had received from the Tides Foundation in the five years that ended in 2022. The letter does not outline specific allegations that either organization ran afoul of rules governing nonprofits. Instead, Smith puzzles over why the chamber, a pro-business stalwart, would accept money from an organization like Tides, which seems worlds apart on many policy debates.
“It seems odd that the foundation would accept funding from a group like the Tides Foundation, which is so focused on activities that are counter to [the U.S. Chamber of Commerce’s] stated mission,” Smith wrote.
While the letter appears to be an attempt to demonstrate the sway progressive donors have in American politics, philanthropy historian Benjamin Soskis called it “a form of ideological policing” by congressional leadership.
Smith’s inquiry “might be an appropriate function of an advocacy organization,” said Soskis, a senior research associate at the Urban Institute’s Center on Nonprofits and Philanthropy. “But it’s not proper congressional oversight.”
Nonprofits Influencing Politics?
In the letter, Chairman Smith notes the committee’s work over the past nine months delving into whether nonprofits have violated rules governing their political activity and on the influence nonprofits have in politics.
Those efforts have zeroed in on the use of philanthropic dollars from donors — such as George Soros, Mark Zuckerberg, and Swiss donor Hansjorg Wyss — to progressive organizations like Arabella Advisors, a for-profit consulting firm that advises a network of liberal nonprofits, and the Tides Foundation, which has received more than $10 million in support from Soros and his Open Society Foundations.
Smith suggests the Tides Foundation supports a number of “anti-business” efforts that run counter to the U.S. Chamber of Commerce’s mission to support free enterprise. He quoted from the Tides Foundation’s website, which states that a “just and equitable future can exist only when communities who have been historically denied power have the social, political, and economic power they need to create it.”
In his letter, Smith also referenced one Tides-supported effort, the International Corporate Accountability Roundtable. The group produced a paper that stated, “Corporations with intentionally complex, opaque supply chains are able to conceal systematic wage theft, forced labor, and attacks against human rights defenders.”
Those activities, Smith suggests, are incompatible with the Chamber’s pro-business agenda.
“Why is the U.S. Chamber of Commerce’s foundation accepting funds from the Tides Foundation, an organization that seems to sponsor and partner with openly anti-business organizations?” the letter asked.
Smith added: “Perhaps the better question is why would the Tides Foundation think that this donation would advance its interests?”
In an email, the Tides Foundation stated that the primary purpose of its grant making to the U.S. Chamber of Commerce Foundation was to support the Hiring Our Heroes program, which it described as “an initiative that connects the military community — service members, military spouses, and veterans — with American businesses to create economic opportunity and a strong and diversified work force.”
The email continued: “It is our view that the request for comment is a politically motivated PR tactic during an election year, driven by actors who disagree with the social-justice work of Tides and our partner organizations. Tides is proud to partner with a broad range of organizations, including 60+ corporate partners, to support social impact and grant-making programs.”
Eric Eversole, vice president of the U.S. Chamber of Commerce and president of the Hiring Our Heroes program, suggested that Smith’s letter appears to have been spurred by “inaccurate reporting” by the Breitbart news site.
He added that the Hiring Our Heroes program has received donations from corporations through donor-advised funds run by the Tides Foundation.
When donors give through a donor-advised fund, they instruct the fund’s sponsor, in this case Tides, which charity they’d like their money to go to. When the gift is made, it is logged in Internal Revenue Service filings as a gift from the sponsor, rather than the original donor, making it impossible to verify the original source of the gift.
The Ways and Means chairman’s interest in the Tides Foundation grants to the chamber reflect a pushback against what many see as the chamber’s tilt to the left in recent years, said William Schambra, co-editor of the Giving Review, a conservative blog on philanthropy.
While there doesn’t seem to be anything nefarious about the donations made through Tides to the Hiring our Heroes program, Schambra said the inability to accurately trace the money back to specific individual donors reflects the concern many have with the use of donor-advised funds to avoid scrutiny of political donations.
“People are using donor-advised funds as a back door to do political spending,” he said.
Chairman Smith’s letter seems to be an attempt to create controversy by associating the Chamber with an ideological adversary, suggested Eric Gorovitz, a tax law attorney specializing in nonprofits.
The committee doesn’t “seem to be concerned about there being any violation of tax law,” he said. “I think they’re just saying, ‘Why are you connected to these bad people?’”
