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Op-ed Placement

Non-Profit Organizations, the '1 Percent,' and the PPP

BY Adam Brandon and Parissa Sedghi
05/13/2020
Originally Published in Real Clear Markets by Adam Brandon and Parissa Sedghi on 5/13/20.

Every movement, whether cultural, educational or political, has rich patrons. There’s no getting around this truth. Just as there are no companies and no jobs without the unspent wealth of the very rich, neither are there non-profits.

As the President and Vice President of FreedomWorks, a non-profit activist organization, we understand the above truth well. Absent the extraordinary generosity of some incredibly committed, and very well-to-do donors, FreedomWorks would not exist.

Some will reflexively respond that since FreedomWorks’ mission is largely defined by the pursuit of lower taxes and limited government, that our organization needn’t ever fear a lack of funding. If the popular narrative is correct, the rich will act in their economic self-interest. This self-interest will include supporting organizations that strive to shrink the amount of private sector wealth creation that the federal government arrogates to itself. It’s a reasonable supposition at first glance, but one that doesn’t stand up to historical reality.

Going back to Eugene McCarthy’s nascent and ultimately unsuccessful bid for the presidency in 1968, and surely before then, there have long been very deep-pocketed supporters of left-leaning causes. In the case of McCarthy, four particularly rich individuals led by Stewart Mott bankrolled his presidential campaign. Though McCarthy didn’t make it to the White House, his presidential run changed the course of U.S. history for the better for it hastening the U.S.’s departure from the Vietnam War.

As we see it, the less that the rich are taxed, the better. Unspent wealth funds the creation of businesses that transform how we live, work and travel, and just the same it changes the terms of the political debate. While we don’t share the politics of billionaires like George Soros and Tom Steyer, we also don’t want to live in a country where they can’t make their views, and those of the left-leaning organizations they support, known.

To be clear, competition lifts all boats. Absent vigorous challenges to the views of organizations like FreedomWorks from politically liberal organizations, it’s safe to say that organizations like ours will stagnate. So let a thousand flowers bloom, we say. Lower taxes and limited government won’t just power economic growth if we’re to be believed, we also think more money backing all sides of the policy debate will foster better, more informed debate from both sides on the way to better policy outcomes.

Thinking about the present and the future, one of many reasons we’ve been so skeptical about the responses of local, state and national politicians to the new coronavirus is rooted in our belief that economic growth is the biggest foe of virus and disease the world has ever known. Prior to immense wealth creation in the U.S., and worldwide, illnesses like pneumonia were known as “Captain of Man’s Death.” Lest readers forget, World War I was the first war in which more people died from combat than from disease.

What changed? Wealth creation did. As more and more individuals achieved wondrous commercial advances, exponentially more wealth was created so that creative scientific and medical minds could be matched with capital to pursue cures for what used to be certain killers. The result has been better and longer lives for all.

Fast forward to the present, our view has consistently been that precisely because the unknowns have outweighed the knowns with a new virus, that the answer should have been and should still be freedom. Freedom produces abundant information and immense wealth, while one-size-fits-all solutions produce blindness and economic decline. We felt this way even when experts were predicting millions of American deaths. History is clear that poverty is the most lethal human condition of all, while wealth is once again the greatest enemy of ill health. If the new coronavirus looms as a seriously lethal threat, the last thing politicians should do is plan economic contraction.

As evidenced by tens of millions unemployed, and millions of businesses bankrupted, politicians on all levels (and regardless of Party affiliation) didn’t heed our views. Some are relieved they didn’t, while some are terrified by how quickly the world’s most dynamic economy could be shrunken by command-and-control.

Whatever the answer, we say the U.S. needs a vigorous policy debate now more than ever. Both sides, ideally funded in copious fashion by their wealthy patrons, should conduct a civil battle about the future of our country.

Which brings us to the Paycheck Protection Program (PPP). What to do?

Up front, we will say it deeply saddens us how the very politicians who oversaw so much economic wreckage should then arrogate to themselves $2.9 trillion to throw money at the consequences of their actions. Command-and-control created the economic meltdown, so the idea that politicians should take greater control over the economy through trillions more in spending strikes us as incredibly backwards.

But since the money is going to be spent no matter what, it might surprise some readers to know that we support the accession of PPP funds by some non-profits with varying missions and ideologies. The economic truth informing our view is that behind every non-profit is a rich person, or many rich people. The annual federal taxes paid by these “1 percenters” amount to nearly half of all federal taxes collected, so as we see it, organizations that access PPP funds are retrieving a small percentage of the taxes already paid by their supporters.

Notable here is that FreedomWorks will not be accepting PPP funds. Though we felt we owed it to our benefactors to apply, we ultimately decided that with government, there’s no such thing as “free.” The lockdowns have had a horrible impact on our organization, forcing the mothballing of our grassroots program and the cancelation of our main fundraising event of the year. As much we felt it was our job to take back for our donors some of what they hand over, the conclusion of FreedomWorks management was that it was not something we were comfortable with doing.

Our one true goal is a political future in which Congress can’t so easily raise $2.9 trillion to spend in such short order. FreedomWorks is, and always will be, about limited government. In carrying out this debate, we look forward to engaging our ideological opposites in vigorous discussion; discussion that is once again made possible by the well-heeled on both sides who, despite differing views, want the best for this great nation.

*Adam Brandon is president of FreedomWorks where Parissa Sedghi is vice president. *