The Nonprofit Shield: How 501(c)(3)s Became Part of the Lawfare-Industrial Complex

One of the greatest asymmetries in American politics has nothing to do with campaign fundraising or media bias. It lies in how the Left and the Right have approached America’s nonprofit sector.

For decades, conservatives largely viewed 501(c)(3) organizations as charities, educational institutions, think tanks, and public-interest groups operating outside day-to-day politics. Progressives saw something else entirely.

To the modern Left, a tax-exempt nonprofit is not merely a charity. It is an instrument for shaping public opinion, manufacturing false consensus, coordinating litigation, and, perhaps most importantly, supplying the media with talking points, all beneath the veneer of credibility conferred by an ostensibly independent organization.

The tax exemption itself is only part of the advantage. The greater benefit is legitimacy. Most Americans assume that because an organization has received tax-exempt status, the government has somehow endorsed its work or certified its neutrality. That assumption is false, but it is politically valuable, and progressive activists recognized its value decades ago.

There is nothing improper about a nonprofit advancing progressive ideas. Nor is there anything improper about conservatives creating organizations that promote conservative ideas. Since the D.C. Circuit’s decision in Big Mama Rag v. United States, federal tax law has largely abandoned the notion that educational organizations must present both sides of controversial issues. Advocacy, standing alone, is generally not enough to jeopardize tax-exempt status.

The problem is not ideology.

The problem arises when organizations present political advocacy as neutral expertise, market advocacy as independent scholarship, or cultivate the appearance of objective authority while participating in interconnected political campaigns whose participants continually validate and amplify one another.

That model became unmistakable during Russiagate and later during the lawfare campaigns against President Trump. Again and again, the same ecosystem emerged: tax-exempt organizations, advocacy groups, think tanks, academics, former government officials, media outlets, and litigation organizations reinforcing one another’s narratives while presenting themselves as independent voices.

Many of the most influential institutions within that ecosystem operate as 501(c)(3) organizations. The Lawfare Institute, the Brookings Institution, CREW, the Wikimedia Foundation, and numerous others enjoy the financial benefits and institutional credibility of tax-exempt status while influencing, in different ways, litigation, public policy, media narratives, and public opinion.

None of this is necessarily unlawful. Congress has never prohibited tax-exempt organizations from expressing ideological viewpoints.

But tax-exempt status is not a license to escape scrutiny.

When organizations claiming charitable or educational status become central participants in political campaigns, regulators should ask whether they remain faithful to the purposes for which Congress granted those privileges. Those questions should be asked without regard to ideology.

Former Acting U.S. Attorney Ed Martin was willing to ask some of them, including whether the Wikimedia Foundation was operating consistently with its tax-exempt purposes. Whether one agreed with the specifics is almost beside the point. The principle was correct. Nonprofit status should never place an institution beyond legitimate examination.

The Covid era reinforced the same lesson. Organizations and experts presented as independent scientific authorities were often deeply intertwined with government agencies, grant-making institutions, and political decision makers. Their apparent independence conferred legitimacy on government narratives and policies that might otherwise have faced far greater scrutiny. Institutional credibility itself became a political weapon.

This did not happen overnight. It was built over decades.

Too many conservatives continue to behave as though the nonprofit sector were governed by political neutrality, professional detachment, and a shared commitment to institutional restraint. It is not. The nonprofit sector has become one of the principal arenas in which political influence is accumulated, narratives are developed, litigation is supported, and public opinion is shaped.

That does not mean the answer is to weaponize the IRS against political opponents. Nor does it mean nonprofit organizations should be viewed with automatic suspicion.

It means the law should be enforced consistently. Organizations that receive the substantial benefits of tax-exempt status should be held to the same legal standards regardless of ideology.

But accountability alone is not enough.

Conservatives must also recognize what the Left understood long ago: institutions matter.

If one side has spent decades building research organizations, litigation centers, educational nonprofits, and policy institutes that shape the national conversation, the answer is not merely to criticize those institutions. It is to build better ones.

Lawfare rarely begins in a courtroom. It begins in institutions that generate narratives, manufacture credibility, influence policymakers, and shape public perception long before a lawsuit, investigation, or bar complaint is ever filed.

Many of those institutions operate behind the shield of tax-exempt status. They are not merely observers of political conflict. They are among its most important participants.

Anyone serious about confronting the lawfare-industrial complex must therefore do more than expose the institutions that sustain it. They must begin building institutions capable of defeating it.

This essay forms part of the intellectual foundation on which we are building the Counterlawfare Institute, an independent, grassroots institution being created from the ground up to confront the lawfare-industrial complex. We have no endowment, corporate patron, or political machine behind us. We rely on readers who understand that institutions capable of challenging entrenched power do not build themselves. If you believe this work is necessary, please help us build the Counterlawfare Institute by supporting us here.