Strip Tax Exemptions From All Woke Nonprofits, Not Just Harvard

Last week, President Trump suggested taking away Harvard University’s tax-exempt status, and his administration began stripping the institution’s federal financial benefits. This is a good move.

Back when the administration was taking away some of Columbia University’s federal funding over antisemitism, I wrote in my policy newsletter that the administration should submit Ivy League universities to an escalating pressure campaign, including the use of Emergency Economic Powers Act authorities to freeze university funds. The ultimate goal should be putting these elite institutions under direct government conservatorship to reform them thoroughly so they can do their work, which is to train pro-American future U.S. elites.

But here’s another idea — broader than the Ivy League, and potentially far more impactful. At a time the federal government is weighed down by unsustainable deficits, we must explore new avenues for revenue generation. One such opportunity lies in the vast and largely unaccountable world of tax-exempt nonprofit organizations.

These organizations enjoy enormous tax privileges granted on the premise that they serve the public good. But many, either officially or in practice, are little more than leftist political operations and slush funds.

These non-profits should lose their tax-exempt status. And there’s a very easy way to do it: all of them have DEI departments. In Bob Jones University v. United States (1983), the Supreme Court held that nonprofit institutions that act in ways contrary to “fundamental public policy,” specifically through racial discrimination, can have their tax-exempt status revoked by the IRS.

The same principle should apply to any large nonprofit that has a DEI initiative or office. DEI initiatives are just a polite word for race (and sex) discrimination.

Why, then, should nonprofits be held to a special standard? They are granted a special tax break because they putatively serve the public good, but instead they institutionalize racial discrimination.

There’s another thing to take into account: the non-profit sector in the United States is enormous. As of recent estimates, tax-exempt nonprofit entities hold between $3.8 and $4.3 trillion in assets. Of that total, approximately $3.2 to $3.3 trillion is held by non-religious nonprofits — entities such as universities, health-care organizations, and philanthropic foundations.

These are the institutions most likely to have implemented DEI in hiring, admissions, and grant-making. They are also the most likely to be staffed and managed by progressive ideologues hostile to America. Tomorrow, the IRS could blanket-remove these institutions’ tax-exempt status.

Now, simply revoking the tax-exempt status of these nonprofits, while justifiable, would not significantly increase taxpayer revenue, nor significantly dent these massive pools of wealth. Most nonprofits operate close to break-even or in the red, meaning that subjecting them to the corporate income tax (currently 21 percent) would generate only limited funds.

In addition, many of these institutions could easily restructure their finances — by shifting spending to internal programs, increasing executive compensation, or expanding assets — to minimize taxable income. Removing tax exemption would hit their future income, as donations would dry up since donors would no longer get a tax break, but it would leave their massive assets untouched.

That’s why, to both raise meaningful revenue and rebalance the power of America’s nonprofit sector, I have proposed a new asset-based tax targeting large non-religious nonprofits that have implemented DEI programming. This tax would apply in addition to the removal of their tax-exempt status. Here’s a proposal I think makes sense:

• 1 percent annually on assets between $10 million and $100 million
• 2 percent on assets between $100 million and $200 million
• 3 percent on assets between $200 million and $1 billion
• 5 percent on assets above $1 billion

This graduated asset tax would be relatively light at the low end, sparing smaller organizations that may have been swept up in DEI trends without serious ideological commitment. But for the massive educational and philanthropic empires that now serve as ideological enforcement arms for elite leftism, this tax would be a financial gut punch — and rightly so.

Having crunched some numbers, I estimate that applying this tax to qualifying nonprofits would generate between $111 billion and $136 billion in annual revenue. That’s real money — more than the entire federal budget for the Department of Education, and enough to make a significant dent in the national deficit. It would also send a clear message: if you want to operate as a nonprofit, you must serve the public interest — not ideological fads that divide Americans along racial and gender lines.

There’s an obvious inspiration. In the 16th century, King Henry VIII dissolved England’s monasteries — not merely for theological reasons, but because the monastic orders had become politically powerful, economically independent, and ideologically oppositional to royal authority.

Today’s DEI-driven nonprofit complex functions similarly: ideologically homogenous, politically oppositional, and economically self-sufficient. It is a parallel state operating within the American system — with no accountability to voters, too little transparency, and no commitment to legal neutrality.

Just as dissolving the monasteries allowed England to redirect wealth toward national priorities, dismantling today’s monasteries — the DEI nonprofit empire — would free up resources and reduce the cultural influence of a radicalized elite.

Some will argue that targeting DEI nonprofits in this way is punitive or authoritarian. But the opposite is true. Tax exemption is not a right, it is a privilege granted in return for public service. Organizations that reject basic American legal principles, such as equal treatment under the law, should not enjoy special status.

This reform would not end civil society. It would rebalance it — shifting power away from ideologically captured institutions and toward a public that increasingly sees them as out of touch, if not outright hostile.

America faces crises of fiscal responsibility and cultural cohesion. Reining in the bloated nonprofit sector — particularly those organizations advancing divisive and potentially unlawful DEI initiatives — offers a unique opportunity to address both challenges at once.

By revoking tax-exempt status, imposing a progressive asset tax, and asserting the principle that public privilege demands public accountability, we can simultaneously raise revenue, restore civil rights protections, and begin the long-overdue task of reclaiming our institutions. Let the reckoning begin.

Pascal-Emmanuel Gobry is the publisher of PolicySphere, a daily newsletter covering policy in DC.