Thursday, March 30, 2023

Nonprofits, campaign finance and more blows to democracy

                                                        Photo by Jason Dent on Unsplash 

I changed my job in response to the Citizens United decision by the Supreme Court of the United States (SCOTUS). I was convinced at the time (2010) that the Court's decision would lead to the transformation of many nonprofits from advocacy organizations to money laundering tools for political donors. I was right.

It's been hard to prove the scope of this for the very reason it's happening. Nonprofit law allows for donor anonymity; campaign finance law does not. By using nonprofits to "wash" their names from political donations, it makes it very hard to track money back to its source. The amazing web of connections that Jane Mayer drew out in her book Dark Money and ProPublica documented here shows how hard this can be. These concerns were part of what led Rob Reich, Chiara Cordelli and I to write Good Fences: The Importance of Institutional Boundaries in the New Social Economy (2013).


                                                    https://projects.propublica.org/graphics/koch

The rules on donor anonymity that come from the nonprofit sector have proven to be remarkably adaptable tools for "washing" donors' names from political contributions. This can be done by moving money from a c3 to a c4. It can be done by opening and closing a c3 or c4 in-between the required reporting periods. It can be done by creating layers of relationships between c3s and c4s and crowdfunding platforms. It can be done - and is being done - because the laws about nonprofits (and the regulators of them - state attorneys general, the Internal Revenue Service (IRS), and, in the case of Florida, the state Department of Agriculture & Consumer Services) intersect somewhat orthogonally with the laws about elections and political donations (and with the FEC and state level oversight bodies).

What's worse, is that Citizens United was only a point on a path. There are trend lines that can be spotted and forces identified working very hard to further dilute any distinctions between charitable anonymity and political anonymity. Today, in an article by Rick Hasen, an election law expert, I read that we are heading toward:

"..a world in which many of the remaining regulations of money in politics could well be struck down as unconstitutional or rendered wholly ineffective by a Supreme Court increasingly hostile to the goals of campaign finance law and extremely solicitous of religious freedom."(fn)

I can't quote more of the article - and shouldn't have quoted that much - as the article is in draft form and was discussed at a conference celebrating Professor Ellen Aprill. (Grateful to the blog post by Gene Takagi that led me to the event). You can download the draft paper here

In a nutshell, Professor Hasen uses Professor Aprill's work to show the intellectual and legal history that will likely use religious freedom to deregulate political donations. How? Via the deregulation of political activity in churches and houses of worship. There's much more to it (read the paper) but that gets us started. 

What does this mean for nonprofits? More politics. More money laundering. Less trust. 

What does it mean for democracy? More blurring of boundaries between nonprofit and commercial corporations. More anonymous money in politics. Less trust. More plutocratic control. 

It's not a positive tale. But thanks to Professors Aprill and Hasen, we've been warned. So, what are we going to do about it?


(fn)Richard L. Hasen, Nonprofit Law as the Tool to Kill What Remains of Campaign Finance Law: Reluctant Lessons from Ellen Aprill,"Forthcoming, 56 LOYOLA OF LOS ANGELES LAW REVIEW (2023) (special festschrift symposium honoring Ellen Aprill)

Wednesday, March 29, 2023

Civil society and the splitting of the US

 

                                                                    Photo by Viktor Talashuk on Unsplash

Civil society organizations are on the front lines of advocating for or against the most divisive issues in the United States. The following list is organized by rights. The links are almost entirely to civil society organizations fighting to protect the rights to free expression, free assembly, voting, reproduction, and work. Their civil society opponents on these issues are noted under each section.

(I'm sure there's more to add here - feel free to send additions to @mastodon.social@p2173 or comment below)

Book bans, educational censorship and attacks on free expression

Pen America reports there have been 86 state bills proposed that would censor a wide swath of educational materials and ban books, mostly on Black people, LGTBQ+ people, and discussions of critical race and queer theory (college level). An increasing number of these bills allow a single person to request removal of any number of books, and for those books to be removed before any kind of review. Thirty-two states and more than 150 school districts have implemented book bans.

        Notable nonprofits for book bans:

Moms for Liberty, formed in 2021, has 200 local chapters. It is both a c3 and a c4. Other national groups with branches include US Parents Involved in Education (50 chapters), No Left Turn in Education (25), MassResistance (16), Parents’ Rights in Education (12), Mary in the Library (9), County Citizens Defending Freedom USA (5), and Power2Parent (5).

Another 38 state, regional, or community groups advocating for book removals appear unaffiliated with the national groups or with one another.

        Notable nonprofits against: PEN America, American Library Association, many others

Protest bans and attacks on free assembly

Thirty-nine states have passed laws limiting protest. While a handful of jurisdictions have passed laws limiting the use of facial recognition by police, most places have not done so. In 2021, half of the 42 US federal agencies that are part of law enforcement owned or used facial recognition technology. Corporate use of SLAPP lawsuits against individual protestors are rising in numbers. Open carry laws for handguns exist in 36 states and you can carry a long gun openly in 44 states. Guns at protests are hard to square with the idea of peacable assembly. 

Notable organizations promoting protest bans: Police associations, Republican officials,

Notable organizations fighting against them: Civil Liberties Defense Center, ACLU, BLM

                                                    https://worldpopulationreview.com/state-rankings/open-carry-states

Voting rights

As of 2021, nineteen states had passed laws making it harder to vote. Eighteen states were carrying over 152 bills to restrict voting in 2022. 

Notable organizations promoting voting restrictions: Americans For Prosperity, Heritage Foundation, ALEC

Notable organizations fighting against restrictions: Voting Rights Alliance, ACLU, some election administration groups, Fair Fight, Brennan Center, Lawyers Committee for Civil Rights

Reproductive rights

Have split the U.S. in two - with 24 states banning access to abortion. These states are also adding vigilante bonuses and surveilling communications and travel.

Notable organizations promoting reproductive restrictions: see this list

Notable organizations fighting for access to healthcare: see this list

Right to work

These laws, whose name implies one thing but which actually focus on restricting the right for labor to organize, exist in 27 of the 50 states.

Notable organizations promoting voting restrictions: Americans For Prosperity, Heritage Foundation, ALEC, Republican Party

Notable organizations fighting against restrictions: AFL-CIO, SEIU, Center for American Progress, Democrats

Behind all of these organizations are donors. Some are heavily supported by individuals, others by foundations, others by corporations. Many rely on crowdfunding or on a mix of all of these funding structures. Behind each issue, on each side, is a mix of 501c4 and 501c3 organizations - an approach that makes it easy to hide the identities of donors whose interests are primarily political but who desire anonymity. New case law on donor anonymity in such situations, and conservative groups efforts to enable even greater anonymity for political donors, further complicates our ability to know who is funding what. 

I don't have a conclusion to offer to this post. Yet. Instead, view this as "first draft thinking" for Blueprint 2024. I welcome your feedback.

Wednesday, March 15, 2023

SVB, GPT, and the social sector

Photo by Bram Van Oost on Unsplash 

If you’ve been reading the news you know that Silicon Valley Bank (SVB), a bank that heavily caters to VC firms and start ups, collapsed and its depositors are being saved by the US Treasury. You know that hearings are being called for in Congress and the same old battle lines between the wealthy (people and institutions) and everyone else have been re-animated. And you can infer that there was (and is) a whole lot of backroom-ing going on.

You also know that SVB had lots of money in accounts held by nonprofit organizations, including affordable housing organizations. 

You also know that Open AI, the once not-for-profit-now-for-profit research organization has released GPT 4, a large language model (LLM) update to its previously (as in three months ago) released GPT 3. You’ve heard about generative AI, read stories about how “nasty,” “smutty” or “just weird” the outputs of the GPT models are, and you may have even “played” with or worked with these models. On mastodon I found a thread of nonprofit staff sharing stories of how they’re using ChatGPT to expedite the funder-driven time-suck of cutting the 1000 word description of your programs and their world changing effects required by Funder A into a 300 word description for Funder B. 

And you’ve probably seen, perhaps read, maybe skimmed the numerous articles and abundant research on how the LLMs are biased and the outputs are “hallucinations,’ (yes that’s what they’re called). As for SVB, you may have seen stories or tweets or blog posts about how the collapse of SVB will lead to an immediate funding disaster for all Bay Area nonprofits.

I want to posit two things. First, jumping to insights or conclusions right now about the effects of either the bank collapse or generative AI makes for good Twitter (if there is any such thing anymore), but isn’t reality. It’s punditry, lobbying, or sales. Second, think about the intersections between these things - emerging tech systems, corporate hype, cost of living, need for and role of nonprofits, risk management in banking, risk denial in corporations, risk and responsibility of governments, philanthropic product choices by wealthy individuals (DAFs, LLCs, private foundations, community foundations) and, finally, the overlap between these categories in terms of actual number of people involved. 

It’s too soon to know how these things will play out at a sector level. Those on the outside of SVB and/or OpenAI don’t know as much as we think we know. We don’t know all the ways they intersect. The best anyone can be doing right now is 1) finding out if they have exposure to SVB or Credit Suisse, either directly or through their funders (true for startups and nonprofits and mitigate appropriately at the organizational level; and check on your own bank, given potential for ripple effects of individual bank problems; 2) Put on your hype-goggles, convene your nonprofit’s data governance review committee (What? You don’t have one?) and start thinking now about who generative AI helps, what it does well and where it is dangerous, if and how it aligns with the mission of your organization (The mission - not the development or marketing departments' metrics, but the actual mission), where (within what software you use) are algorithms already at work, and what data (on whom) you’d be feeding to a third-party corporation (such as OpenAI) if you start using it and what that means for your constituents. 

These two things - a bank collapse and new technology - ARE likely to have BIG societal impacts. But understanding them will take time. And their impacts won't unfold along "straight lines" from A to B. There will be all kinds of additional "developments," intersections and interactions between impacts, and mitigations and responses. Don't fall for the quick analysis - it’s all operating on incomplete information.*

Just like the weather in California, judging from the winter we’ve had, forecasters (armed with actual meteorological and longitudinal data) are noting that we’re in for a long, strange Spring. That’s about all we can guess is coming from these two recent events. Strange times ahead. Keep your goggles on.

 

 *Speaking of incomplete information, Time Magazine is running a story describing how some of the biggest names in Effective Altruism knew about the financial shenanigans of their most famous, duplicitous member, Sam Bankman-Fried. Yet, they were still "shocked and dismayed" when his crypto-empire turned out to be built on fraud.