Foundation uses tax-exempt status to fund anti-union efforts

Bill Knight column for Mon, Tues. or Wed., May 29, 30 or 31

It’s no shock that wealthy interests tend to oppose organized labor, but it’s stunning to learn that some well-heeled foundations essentially use money that should go to the public treasury to fight unions – despite an average of 64.2 percent of Americans who approve of labor unions over the last 80 years, according to Gallup polls.

At the center of such efforts is the Lynde and Harry Bradley Foundation (the Bradley Foundation), which has led a national effort to de-fund and destroy labor unions, according to the Madison, Wis., Center for Media and Democracy (CMD), a nonprofit advocacy group that uncovered key documents.

More significantly is that the Milwaukee-based Bradley Foundation relies on its tax-exempt status to promote Republicans’ goal of weakening unions for political purposes.

The Bradley Foundation is a nonprofit private foundation with assets of $845,139,789, according to GuideStar USA, Inc. an information service maintaining a comprehensive database on nonprofits. Federal tax law rewards charitable giving through the 501(c)(3) designation, like other exemptions encourage home buying/lending, marriage and other social positives. But legally, charities with tax exemptions via 501(c)(3) status are prohibited from participating in partisan politics.

“There is no basis for the proposition that ‘de-funding labor unions’ is a charitable purpose within the Internal Revenue Code,” CMD was told by attorney Marcus Owen, former director of the Exempt Organizations Division of the Internal Revenue Service for 10 years.

Alone and through donations to similar anti-union groups, the Bradley Foundation’s most significant labor targets include geographic areas (like the state of Washington), plus public employees and teachers.

“Many have felt for a while that the system was rigged – we could see it on the ground as folks living paycheck to paycheck worked harder than ever but couldn’t get ahead and schoolteachers faced a steady diet of demonization and budget cuts,” said Randi Weingarten, president of the American Federation of Teachers. . “This expose on the Bradley Foundation and its grantees makes crystal clear it was rigged – by a deliberate strategy to undercut the power of everyday people.”

Besides labor’s comparatively modest financial resources, it has considerable “boots on the ground” to get out the vote and, through allied Political Action Committees (PACs), help candidates who support collective bargaining. So it can be a political force.

But PACs are subject to taxation under Internal Revenue Code Sec. 527. What’s “charitable” about others’ union-busting? Nothing.

“Tax-exempt status is reserved for charitable, educational, and other genuinely non-partisan causes,” commented Eric Havian, an attorney with the Bay Area law firm Constantine Cannon, which specializes in IRS and other whistleblower complaints. “It should not cynically be claimed for organizations whose mission is to boost the fortunes of one political party at the expense of another.”

The Bradley Foundation assisted one of the Right’s highest-profile groups, the American Legislative Exchange Council (ALEC) with $1.1 million in contributions between 1986-2015, CMD reported. ALEC and the Heritage Foundation are among groups that push a new strategy to impose Right to Work through local ordinances in areas where states resist the anti-union measure, which prohibits labor contracts requiring workers in unionized bargaining units to share in the costs of organizing and enforcing contracts. In Illinois, for example, GOP Gov. Bruce Rauner backs the scheme, attempted by Lake County’s village of Lincolnshire, a measure struck down in federal court in January.

Politically, the union-busting effort is a transparent attempt to benefit Republicans. Specifically, the Freedom Foundation’s Jeff Rhodes in a recent essay in The Hill attributed Trump’s election to the destruction of unions in key states.

“Did the labor reforms enacted in Wisconsin and neighboring Michigan help Donald Trump win those states?” asked Matt Patterson, director of the Center for Worker Freedom at Americans for Tax Reform. “No question in my mind.”

Still, even with an onslaught of anti-union propaganda in recent years, 56 percent of Americans continue to approve of unions, according to Gallup’s most recent poll, last year.

In the shadows, exploiting their tax-exempt status, are the following anti-union nonprofits (and their assets) that received contributions from the Bradley Foundation, says CMD (which itself has assets of $379,260, GuideStar says): Americans for Tax Reform and partners including the Randolph Fundation ($11,682,411 in assets); ALEC and partners including the State Policy Network ($5,107,279); Education Action Group Foundation ($454,135); Freedom Foundation ($11,333,627); Barry Goldwater Institute for Public Policy Research ($5,069,202); Hudson Institute ($39,904,608); Independence Institute ($5,147,253); Liberty Foundation of America ($138,951); Mackinac Center for Public Policy ($11,123,297); Manhattan Institute for Policy Research ($20,727,480); National Right To Work Legal Foundation ($20,910,465); Opportunity Ohio ($520,313); and Wisconsin Institute for Law and Liberty ($3,368,483).