The American nonprofit sector, comprising everything from social justice nonprofits to right-wing think tanks, is widely seen as a moral compass in public life. These organizations claim to serve the common good, benefiting from tax-exempt status under Section 501(c)(3) or 501(c)(4) of the U.S. tax code. But beneath the image of benevolence lies a complex ecosystem where low wages, union resistance, and the concentration of wealth and power are all too common. Whether left-leaning or conservative, many nonprofits operate like corporations in all but name—exploiting public subsidies while avoiding the labor and tax obligations of the private sector.
While liberal nonprofits often claim moral high ground, conservative nonprofits such as the Heritage Foundation, Federalist Society, and Turning Point USA are even more explicit in using their nonprofit status for ideological gain. These organizations are generously funded by a network of wealthy donors and dark money, benefiting from laws that shield donor identities while still providing tax breaks. The New York Times and ProPublica have both documented how right-wing nonprofit networks use complex legal structures to move billions in untraceable funds through donor-advised funds and shell charities to influence elections, judiciary appointments, and public policy—while maintaining nonprofit status.
The 2018 creation of the Marble Freedom Trust, which received $1.6 billion in a single donation from electronics magnate Barre Seid, is one of the most striking examples of how conservative nonprofits benefit from the tax system. The money went to Leonard Leo, architect of the conservative judicial movement, and is being used to reshape American courts and governance—all tax-exempt. These conservative nonprofits rarely face scrutiny from the IRS, while progressive nonprofits, especially those tied to activism or labor organizing, often face intense bureaucratic hurdles or audits.
Despite their wealth, conservative nonprofits are not known for paying living wages to their rank-and-file employees. Just as with liberal nonprofits, a culture of ideological commitment is often used to justify stagnant salaries, limited benefits, and the absence of unions. At places like the Leadership Institute or the Intercollegiate Studies Institute, workers may be expected to accept lower compensation for the “privilege” of advancing a conservative mission. Few, if any, of these organizations are unionized. Interns and entry-level employees are often underpaid, even as their organizations maintain multi-million-dollar budgets and highly paid executive teams.
Meanwhile, liberal and progressive nonprofits often mirror this dynamic. The Southern Poverty Law Center, the ACLU, and the Sierra Club have all faced internal revolts from underpaid and overworked staff seeking union protections and better pay. Despite progressive missions, many of these organizations have resisted unionization, hired union-busting consultants, and continued to pay senior leadership six- or seven-figure salaries. The exploitation is bipartisan, rooted not in ideology but in structure: the tax system enables and incentivizes this behavior.
Across the political spectrum, nonprofits depend heavily on unpaid or underpaid labor. Interns, volunteers, and junior staff are routinely told that their sacrifices serve a greater cause, whether that cause is climate justice or dismantling “woke” education. The result is the same: a hollowing out of labor rights under the banner of purpose. The nonprofit sector has become a vehicle for elite influence—liberal and conservative alike—rather than a true instrument of public good.
Unionization in the nonprofit world remains low. According to the U.S. Bureau of Labor Statistics, nonprofit union membership has barely increased over the past three decades. And while there has been an uptick in union drives at liberal nonprofits, conservative organizations have largely avoided these movements altogether. In fact, many conservative nonprofits are actively hostile to organized labor as a matter of principle. The Heritage Foundation, for example, has long opposed the expansion of labor rights and has advised Republican administrations on how to weaken collective bargaining in the public sector.
As nonprofit wealth grows—particularly through endowments, real estate holdings, and tax-exempt investments—workers at the bottom continue to struggle. In higher education, many private nonprofit colleges and universities pay adjunct professors poverty wages while top administrators earn corporate-level compensation. Religious nonprofits, too, have been found to exploit workers under the guise of spiritual service. Megachurches and faith-based charities sometimes use volunteer labor as a substitute for paid employment, all while claiming tax benefits and avoiding federal labor laws.
Reform is urgently needed. Tax exemption should come with clear standards for labor rights, wage equity, and financial transparency. The IRS must enforce restrictions on political spending by nonprofits, particularly those masquerading as educational institutions while operating as partisan arms. Donor disclosure laws should apply across the board, and tax deductions for mega-donations should be limited unless tied to measurable public benefit. If nonprofits are to retain their privileged legal status, they must meet basic ethical and democratic standards.
Until these changes occur, the nonprofit sector will remain a shadow version of the for-profit world—reaping public subsidies while delivering low wages, avoiding unions, and deepening political inequality. Whether the name on the letterhead reads “Heritage Foundation” or “ACLU,” the structure of exploitation is the same. It's not just a crisis of values. It's a crisis of accountability.
Sources
ProPublica. “How a Billionaire’s Donation Exploded the Conservative Nonprofit World.” August 2022. https://www.propublica.org/article/dark-money-leonard-leo-barre-seid
New York Times. “They Legally Moved Billions to Fund Conservatives.” October 2021. https://www.nytimes.com/2021/10/05/us/politics/dark-money-nonprofits.html
Associated Press. “Why Workers at a Growing Number of Nonprofits Are Unionizing.” June 2023. https://apnews.com/article/7fd961c88c614db47db63ffcd80e084e
PayScale. “Nonprofit Pay Cut: How Much Are You Losing to Do Good?” https://www.payscale.com/research-and-insights/nonprofit-pay-cut
Teen Vogue. “The Nonprofit Industrial Complex: What Is It and How Does It Work?” https://www.teenvogue.com/story/non-profit-industrial-complex-what-is
Bureau of Labor Statistics. “Nonprofit Earnings and Sectoral Employment in the United States Since 1994.” https://www.bls.gov/opub/mlr/2024/article/nonprofit-earnings-and-sectoral-employment-in-the-united-states-since-1994.htm
San Francisco Chronicle. “One of the Bay Area’s Most Progressive Nonprofits Is Warring with Itself.” https://www.sfchronicle.com/opinion/soleilho/article/nonprofit-unions-workers-20038770.php
Reddit. “Antiwork Nonprofit Volunteer Testimonies.” https://www.reddit.com/r/antiwork/comments/uhnrfd
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