Congress Used to Regulate Philanthropies, Now They Benefit From Them

These organizations have a significant influence on public policy in America, all while stretching the law to enrich themselves.

WASHINGTON – MARCH 10: Bill Gates (L), co-founder and co-chair of the Bill & Melinda Gates Foundation, and former U.S. President Bill Clinton shake hands after testifying before the Senate Foreign Relations Committee on Capitol Hill March 10, 2010 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

In the 1960s, when populist politicians tended to be white, Southern, and Democratic, two powerful members of the House of Representatives, Wright Patman and Wilbur Mills, took aim at private foundations and their “special” status in the nonprofit world.

Beginning in 1962, Patman led a series of investigations into how foundations were being used to avoid taxes, protect family economic interests, and promote narrow political agendas. In 1969, Mills, as chairman of the Ways and Means Committee, held hearings on private foundations that included an infamous performance by McGeorge Bundy, President of the Ford Foundation. The result was sweeping legislation that forced foundations to pay out a specified amount of money each year in grants, limited their ability to control for-profit businesses, and restricted their involvement in voter registration and other political activities.

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