Editors’ Note: This post, from John Witt, inaugurates HistPhil’s book forum on Witt’s recently published The Radical Fund: How a Band of Visionaries and a Million Dollars Upended America (Simon & Schuster, 2025), which chronicles the influence of the American Fund for Public Service, established in 1922. As Witt argues, the Garland Fund, as it was colloquially known, was the most significant effort in the twentieth century to use the products of American financial and industrial capitalism to address the ills of (and promote alternatives to) American financial and industrial capitalism. In an adaptation from the book, Witt discusses how the Fund sought to use the US tax code to further those ends.

In the wake of Charlie Kirk’s assassination earlier this fall, the Vice President of the United States laid political violence at the doorstep of what White House insiders call “the left-wing nonprofit sector.” Tax consequences and criminal investigations seem to be in the offing, and though the connections are tenuous at best, the problem of violence and the nonprofit sector have been improbably thrust together in the disordered autumnal politics of 2025. 

The present pretextual political maneuvering, however, obscures a forgotten historical connection between political violence and nonprofit status under the modern income tax. The story, it turns out, goes back a century, to the origins of the income tax code and to the first self-consciously radical tax-exempt philanthropic foundation of the modern era. The American Fund for Public Service (or the Garland Fund, as it was sometimes known) is the subject of a book I’ve just published. It’s a big book, with lots of threads, ranging from free speech to industrial unions to civil rights. But one electric theme is about tax and the use of political violence to make change in the modern world. 

Founded in 1922 by Harvard dropout Charles Garland, the Garland Fund anticipated the controversies of our time. The fund, which itself was targeted by state and federal officials for its radical associations, used an initial endowment of $1 million to advance the interests of the American working class and racial minorities. Roger Baldwin, who had just founded the ACLU, ran the new foundation alongside a board of directors made up of leaders from organizations that would soon become central to twentieth-century American liberalism. The head of the NAACP, James Weldon Johnson, served on the board. Leaders of the future Congress of Industrial Organizations held multiple seats, while editors at The New Republic and The Nation, along with a handful of socialists and communists, took most of the rest.

The fund’s central projects were economic prosperity for American workers, racial equality for Black Americans, and freedom of speech on picket lines and in classrooms. The directors financed the Scopes trial, the defense of Ossian Sweet, and the NAACP’s first legal defense fund. It supported the earliest unions of the Congress of Industrial Organizations. And it helped launch the lawsuits that later became Brown v. Board of Education, along with a suite of lesser known cases against all-white labor unions.

All of this activity took place, of course, under the still-new income tax treatment of nonprofit organizations. When Congress passed the modern income tax in 1913, it exempted “religious, charitable, scientific, or educational” organizations, as well as any nonprofit “civic league or organization” that was “operated exclusively for the pro­motion of social welfare.” Tax changes during the First World War added yet more advantages, allowing taxpayers to deduct their contributions to certain of these organizations.

What, however, about organizations dedicated to social and political change? The old law of charitable trusts had tried to distinguish advocacy from charity. A landmark nineteenth-century Massachusetts case on the point denied formation of a charitable trust dedicated to agitating for women’s rights; the law does not subsidize its own critique, went the reasoning. 

Concern about tax-preferred private manipulation of public opinion in the wake of the First World War helped revive the old Massachusetts approach. In 1919, the Treasury Department denied tax-exempt status to “associations formed to disseminate controversial or partisan propaganda,” plenty of which had sprung up during the war. As the Treasury now saw matters, Congress had aimed in 1913 to “foster education in the broadest sense,” not to support organizations aiming to foment the rivalry of “one class against another.” The tax code, it reasoned, ought not to “encourage the dissemination of ideas” that would be “to the profit” of one group and the detriment of another. Deductions and exemptions were, the solicitor of internal revenue observed in 1922, acts of “extraordinary grace” to be extended with caution.

The 1919 propaganda rule led the commissioner of internal revenue to disallow the deduction of contributions to the League for Industrial Democracy, run by Socialist Party leader Norman Thomas, citing the league’s advocacy of “drastic political and economic changes.” The influential Court of Appeals for the Second Circuit in New York denied tax exempt status to Margaret Sanger’s American Birth Control League, reasoning that Sanger’s “political agitation” about birth control laws was “outside the statute” and therefore had to be “conducted without pub­lic subvention.”

The fate of Sanger and Thomas at the taxing authorities boded poorly for the new American Fund for Public Service. Thomas was on the fund’s board of directors; Sanger received support from the fund for her efforts to promote birth control and voluntary motherhood, though not for her eugenics work.

Yet from the beginning, Baldwin tried to position the fund for tax exempt status. The Garland Fund’s Delaware corporate charter committed the foundation to “the wellbeing of mankind,” using words the Rockefeller family’s foundations had adopted in the previous decade. The Fund’s mission statement committed it to “charitable, benevolent, and public educational activities,” language drawn straight from the text of the tax law. Baldwin and a lawyer friend even crafted a formal exchange of scripted letters with Garland in 1922 exclusively for purposes of tax avoidance. The text, designed to mimic the preferred terminology of the federal government’s tax regulations, called on the directors of the Fund not to use the money “to the advantage of one individual as opposed to another,” or to the benefit “of one group as opposed to another,” or “one class” as “opposed to another.”

Regardless, the commissioner for internal revenue denied the Garland Fund tax exempt status. The fund, said the commissioner, and not without reason, financed controversial propaganda rather than genuine educational efforts.

But Baldwin was not out of moves. The fund hired tax lawyer Nicholas Kelley, a graduate of Andover, Harvard College, and Harvard Law School who had practiced at the Cravath firm before the war. Kelley’s mother, Florence Kelley, had long been an influential American labor reformer; as a young woman, she had been a personal translator for Karl Marx’s comrade and coauthor Friedrich Engels. Nicholas, who lacked his mother’s socialist passions, would later serve as general counsel to General Motors. But in 1924 he channeled his energies into the federal tax treatment of liberal organizations, helping in particular to craft an as-yet untested theory.

In Kelley’s view, the denial of tax advantaged status to orga­nizations putting out propaganda applied to charities and educational organizations—but not, he argued, to a separate category in the tax code: civic leagues dedicated to promoting the social welfare. Properly understood, Kelley argued, the American Fund was not a charity at all. It offered no alms to people in need. Nor was it an edu­cational organization; it did no teaching, at least not on its own. As Kelley saw it, the Fund was exempt as a civic league.

Kelley’s strategy had a downside. Contributions to tax exempt civic leagues were not deductible for the donor in the way that contributions to tax exempt charities were. But for the American Fund, deductibility of donations was irrelevant. Garland had no need for a deduction for his initial contribution, because he had no income to speak of. For his part, Baldwin had abandoned efforts to solicit further donations for the Fund. For the Fund, exemption was what mattered. And after a year of lobbying, Kelley prevailed. The Bureau of Internal Rev­enue relented. The Garland Fund got its exemption.

For Baldwin and the fund’s liberal directors, the effects were substantial. At the 1920s corporate tax rate of 12.5 percent on net income, the Fund could have owed more than $100,000 in taxes for the seven years from 1922 up to the stock market crash of 1929. Economically speaking, the effect was the same as if Congress had appropriated money to the control of a small cadre of socialists, labor radicals, civil rights advocates, and heterodox lib­erals. 

Fights about the new tax code came alongside a remarkable transformation in left politics in the United States. At the Garland Fund, the new tax regime helped reshape the outlook and approach of the progressive movements whose efforts federal taxpayers’ now implicitly supported.

American labor-capital relations in the decades on either side of the turn of the 20^th century were astonishingly and exceptionally violent. Employers asserted the prerogatives of property against strikers with hired goons, private militias, and legions of Pinkertons. But the American left was badly tarnished by its association with political violence, too. Anarchists bombed the Haymarket demonstrations in 1886, assassinated President William McKinley in 1901, and set off a wagon bomb that killed dozens on Wall Street in 1920. Radical labor organizers in the Industrial Workers of the World, better known as the Wobblies, championed violence and sabotage throughout the 1910s. Fighting was routine on the picket lines of the era’s exceptionally violent labor strikes, with workers often giving as good as they got.

The postwar Garland Fund drew on the energies of earlier radicalisms. Elizabeth Gurley Flynn, one of the chief proselytizers of the Wobblies for more than a decade, joined the fund in the early 1920s, first as secretary and then as member of the board. But on the Fund she helped model a new orientation, one that was embodied in the Brookwood Labor College, a now mostly forgotten institution located on a fifty-three-acre estate amid the horse farms and country mansions of Katonah, New York up the Hudson Valley.

Brookwood was the single largest beneficiary of the Garland Fund largesse. Founded by Abraham Johannes Muste, a thirty-six-year-old pacifist and former Dutch Reformed minister, Brookwood turned pacifism into a powerful model of nonviolent change. For Muste and his faculty, the failure of violence was moral as much as it was strategic. Bombs, assassinations, and fisticuffs were at odds with the world they aimed to create.

Muste assembled a curriculum from the literature of the interfaith pacifist organization known as the Fellowship of Reconciliation, then only a few years old. Drawing on three years studying in India with Mohandas Gandhi, FOR member Richard Gregg wrote in his 1934 bestseller The Power of Non-Violence that “non-violent resistance acts as a sort of moral jiu-jitsu.” It turned the tables on a stronger adversary by using the adversary’s strength against him, illuminating the injustice of his power and causing him, in Gregg’s words, “to lose his moral balance.”

Out went the Wobblies’ old language of class warfare. In came a new ethic of peaceful action. The nonviolence of Muste’s Brookwood eschewed the self-immolating purity of the Wobblies’ wild prewar revolutionary fervor. Instead, the school trained hundreds of working-class organizers in highly practical forms of nonviolence.

In 1930s Detroit, a group of Brookwood-educated labor leaders in the automobile industry adapted Brookwood’s teachings to create a new form of strike, one that abandoned the endemic violence of the picket lines. The sit-down strike replaced fisticuffs on the streets with a self-governing community of workers inside the shuttered factory. Within a few years, the United Auto Workers, led by Brookwood alums, had become one of the most important unions in America, combining the Wobblies’ industrial union structure with an ethic of cooperative industrial democracy that eschewed class warfare in return for a bigger share of the gains from a mass production economy.

For his part, Muste would go on to become one of America’s most renowned pacifists. In the 1940s, he would help found the Congress of Racial Equality, where he mentored key civil rights figures like James Farmer and Bayard Rustin. Martin Luther King Jr. credited Muste as an inspiration for his own practice of nonviolent resistance.

And in Brookwood’s final years, a young man named Myles Horton drew on the Brookwood model to establish the Highlander Folk School in Tennessee, which continued Brookwood’s work as the training ground for nonviolent southern labor organizing campaigns. Across the course of the next two decades, Highlander hosted civil rights figures like King, John Lewis, and Diane Nash. In 1955, a woman named Rosa Parks attended a workshop at Highlander on the significance of the Supreme Court’s decision in Brown v. Board of Education, itself a product of old Garland Fund efforts. When Parks refused to give up her seat on a segregated bus in her hometown of Montgomery, she carried forward the nonviolent protest tradition begun at Brookwood’s tax exempt programming in the 1920s.

Of course, the rise of the tax code’s advantages for qualifying nonprofits alongside the pivot on the left toward nonviolence is not in itself proof that the former caused the latter. Simultaneity need not indicate causation. But tax law’s favorable treatment of nonviolent forms of change helped reshape the landscape of strategic action for midcentury social change. 

In this sense, it’s no coincidence that groups on the left now sometimes decry the risks of movement capture from foundation funding, asserting rallying cries such as Ruth Wilson Gilmore’s “the revolution will not be funded.” The very same tax advantages that the government now wields as a club over the nonprofit sector actually encouraged moderation and strengthened peaceful advocacy. For better and for worse, and mostly for the better, they helped to marginalize factions that veered toward the destructive use of violence.

-John Witt

John Fabian Witt is the Duffy Class of 1960 Professor of Law at Yale Law School and a Professor of History at Yale University, where he teaches and writes on the history of American law and the law of torts. He is the author of eight books, including The Radical Fund: How a Band of Visionaries and a Million Dollars Upended America (2025) and Lincoln’s Code: The Laws of War in American History (2012), which won the Bancroft Prize, was a finalist for the Pulitzer Prize, and was awarded the American Bar Association’s Silver Gavel Award.