No federal agency works as much with nonprofits as the Department of Health and Human Services. That is one reason Xavier Becerra, President-elect Biden’s pick to lead the agency, will face opposition. His record, as California attorney general since 2017 and in Congress for nearly a quarter-century, has been one of hostility to nonprofit institutions and the donors who support them.
In the House Mr. Becerra often accused charitable foundations of failing to donate funds equitably. “At some point, the numbers don’t lie and someone needs to do something, especially when you’re using the taxpayers of America’s money to do your philanthropic work,” Mr. Becerra told the Council on Foundations in 2008. He asserted that there was “disproportionate giving . . . skewed against people of color.”
Not content merely to criticize, Mr. Becerra threatened to use federal power to get his way. “We’re not trying to mandate something,” Mr. Becerra told the council, “but we will if you don’t act.”
He referred to the tax exemption for charitable foundations as a “$32 billion earmark” and cited an “obligation to make sure those $32 billion that would have gone to the federal government are used for a . . . public good.”
There has never been any requirement that charitable funds be allocated according to the “public good,” whoever defines that, or to any particular cause. People and institutions are permitted to claim deductions for gifts to any Internal Revenue Service-verified charitable organization, ranging from schools and soup kitchens to museums and symphony orchestras. The IRS has identified 29 types of organizations that qualify. Their purposes can be educational, religious, scientific, literary or even athletic. The exemption is a recognition that the public good arises from a plurality of different efforts. The claim that charities must serve a particular definition of the public good destroys the rationale for the exemption.