While graduations may have resulted in a temporary halt to pro-Gaza campus encampments and protests, major U.S. philanthropies continue to violate their tax-exempt status by secretly funneling donations to antisemitic and pro-Hamas groups planning to disrupt the Democratic National Convention and reignite campus protests this fall.
A recent report by the Coalition for a Safer Web reveals a complex organizational and financial structure that controls and coordinates much of the pro-Gaza unrest, and it shows how grassroots groups have been infiltrated by legacy far-left extremist organizations.
The report is an eye-opening account of how much the pro-Palestinian protest movement has been hijacked by foreign and domestic far-left actors, including antifa, anti-war organizations, Marxist-Leninist organizations, and an assortment of professionally compensated agitators beholden to foreign influencers.
While even the vilest speech may be protected under the Constitution, a line is crossed when antisemitic and extremist groups are funded by donors and recipients claiming tax-exempt status in violation of Section 501 of the Internal Revenue Code, which expressly prohibits groups claiming tax-exempt status from donating to groups trafficking in racial hatred and violence.
In its report, CSW disclosed that major nonprofit philanthropies claiming tax-exempt status, notably the Goldman Sachs Philanthropy Fund, the Soros Open Society Foundation, the Rockefeller Brothers Fund, and the Tides Foundation, were funneling tax-deductible donations to extremist groups and projects with a long history of promoting antisemitism in violation of the Internal Revenue Code.
Tax-exempt dollars have flowed to a collection of far-left fringe groups, including the Marxist-Leninist, D.C.-based ANSWER Coalition, CODE PINK, the People’s Forum, Jewish Voice for Peace, and al Adwa, which have organized, promoted, and provided logistical support for “Zionist-free” and antisemitic encampments on college campuses and protests.
Tents, barricades, helmets, gas masks, and fast-food deliveries needed to sustain the protests were not magically falling from heaven onto pro-Gaza encampments. The hired help for these protest groups consists of predominantly professionally trained, well-compensated outside agitators dispatched by the ANSWER Coalition and other tax-exempt claiming organizations.
Under Section 501 of the code, philanthropies and other nonprofit groups granted tax-exempt status are exempt from federal and state corporate income taxes. Additionally, most financial and in-kind contributions to these charities enable donors to deem their donations tax-exempt.
However, as a condition of their tax exemption, 501(c)(3) organizations are required to work in the public good and must file IRS Form 990 each year detailing the sources and recipients of their funding. They are strictly prohibited from engaging in politics, let alone promoting hate and unrest.
Various methods are being used by highly regarded foundations to end-run the Internal Revenue Code to fund extremist groups that peddle hate.
One ruse relied on by the Goldman Sachs Philanthropy Fund is to channel donor-directed funds from a client account held by Neville Singham, a Shanghai-based antisemitic communist sympathizer, even though the fund is prohibited under its tax-exemption status from channeling tax-exempt donations directly from a donor to a targeted donor recipient — in this case, the Party for Socialism and Liberation, the largest antisemitic communist party in the U.S. PSL, in turn, is directly funding antisemitic and pro-Hamas unrest instigators and their organizational allies.
In order to circumvent disclosure and reporting requirements under various state and federal laws, several philanthropic organizations, notably the Tides Foundation, camouflage donations to antisemitic and pro-Hamas groups by relying on a funding transfer system to suspect groups called “fiscal sponsorship.”
Under this ploy, Tides designates an otherwise Form 990-reportable grant to a third-party recipient as a Tides-managed project. The third-party extremist recipient (e.g., “MPower,” “Zealous,” and “WithinOurLifetime”) receives Tides’s operational support to plan campus and other disruptions, including payroll processing, health insurance, legal oversight, and personnel management, all outside the prying eyes of the media and tax authorities.
The “fiscal sponsor” loophole in Section 501 enables Tides to avoid having to report its donations to extremist groups, and these extremist groups, in turn, are not required to report their donations from Tides to the IRS.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
CSW filed complaints with the IRS inspector general against the Soros Open Society Foundation and the Goldman Sachs Philanthropy Fund for knowingly violating Section 501 by donating to antisemitic organizations. CSW is also demanding the IRS take regulatory action against the Tides Foundation to end the charade it relies on to mask donations to antisemitic and extremist groups by designating them as “fiscal sponsorships.”
But CSW’s IRS filings are no substitute for swift action by the Biden administration and Congress to review the tax-exempt status of nonprofit organizations and their projects that promote hate and violence.
Marc Ginsberg is the president of Coalition for a Safer Web. He is an international attorney who also served as a senior White House Middle East adviser, ambassador to Morocco, and special envoy for Mediterranean trade and security.