Should Nonprofits Be Allowed to Engage in Political Activity?

by lizard

I read a great op-ed yesterday (h/t problembear) from Missoula’s United Way CEO, Susuan Hay Patrick, titled Montana Nonprofits: The Economic Engines That Could. Here’s some of the more impactful info about Montana nonprofits:

Nonprofits employ 45,000 people throughout Montana, making our sector one of the largest in the state. We’re bigger than the for-profit finance, insurance, real estate, and arts & entertainment sectors combined. According to the Montana Nonprofit Association, Montana’s 2,000+ charitable nonprofit employers contribute over $1.5 billion annually to our state’s wage base.

But our reach extends beyond our payroll. The work of nonprofits ripples out into the state’s economy. People want to live, work, play and go to school in a place that offers strong cultural, recreational, and educational opportunities; where we care for our kids and our seniors and our parks and trails and pets; where folks can find meaningful volunteer opportunities and a chance to give back. A vibrant nonprofit sector helps ensure a high quality of life – and that’s good for Montana’s economy.

Nonprofits do an awful lot for very little. Eighty-one percent of Montana nonprofits have budgets of less than $100,000. Despite these meager resources, nonprofits are mighty “little engines that could,” achieving results far beyond what they spend to do do.

Nonprofits that have the 501(c)(3) designation are prohibited from engaging in political activity. That means they can’t:

  • endorsing a candidate for public office
  • contributing money to political campaigns
  • making verbal or written public statements supporting or criticizing candidates
  • distributing statements prepared by others that favor or oppose any candidate
  • allowing a candidate to use an organization’s assets or facilities (unless other candidates are given the same opportunity)
  • criticizing or supporting candidates on nonprofit websites or through links to other websites, and
  • placing signs on nonprofit property supporting or opposing candidates.

Robert Egger, founder of the DC Central Kitchen, thinks that should change. Last summer Egger wrote an intriguing post, titled Does Sexism Keep Nonprofits Out of Politics? Here’s why Egger thinks the Nonprofit sector needs to change:

Late last week, in response to a report from the Commission on Accountability and Policy for Religious Organizations (advocating for nonprofits and churches to be able to directly engage in partisan politics), Diana Aviv, the CEO of Independent Sector, issued a rather predictable statement “Urging Public Officials to Reject Recommendations to Allow Political Activity by Charities.”

I understand this historic point of view, but rather than call for open debate about our role, she shut the door with this definitive closing sentence, “501(c)(3) organizations, as the public trust demands, should remain above the political fray, advocating and informing leaders, but never engaging in political activity.”

Needless to say, I disagree.

Before you say it, I will….YES, it would be messy. YES, it would change the very nature of our sector. YES, it would open the door for conflict and collusion. But we don”t have a choice. Here’s why:

First, businesses now have unfettered ability to engage in politics, and can help elect leaders who create laws and policies that affect our work, the communities we serve, and the economy that binds us together. Democracy isn’t easy, and it’s patently undemocratic for our sector to not have that equal right. For those who suggest we trade those rights for “tax-deductions,” I would counter with: corporate America solicits and receives tax breaks too, on a level equal or greater than those afforded to nonprofits, and that does not disqualify them.

Second, our role in the economy is undeniable. We are the third largest employer in America, pay payroll taxes, and attract significant financial investment into every community we touch. Our work sets the social stage for traditional businesses (and cities) to thrive. This should give us equal rights and political voice as we debate the future.

Third, as my friend Joel Berg was quick to point out in a discussion about Independent Sector’s statement, “In a democracy, there should be no activity more noble than political activity. This idea that non-profits are pure and righteous — and that somehow evil, slimy, politics is beneath them — is both an insult to democracy, and absurd self-aggrandizement on behalf of the nonprofit sector.”

Egger goes on in his post to explain the role he claims sexism has played. It’s interesting and worth considering.

Nonprofits have incredibly beneficial impacts on local communities. Maybe someday nonprofits will be allowed to engage in the political activity the for-profit sector currently dominates.

  1. evdebs

    What you’re asking for is for the billionaire Koch brothers to be able to dump tens of millions into political campaigns and write it off their taxes (the damn little they pay).

    This is a very, very bad idea.

    The 501(c)3 restrictions have kept them from doing a lot of damage, though they’re using 501(c)4s (non deductible) to accomplish the demise of democracy and to conceal their donor status.

    If a 501(c)3 wants to engage in political activity (substantial lobbying), they can spin off a 501(c)4. For 13 years, I’ve sat on one board that has done that. There are still limitations, such as endorsements of specific political candidates, but that’s not a bad thing.

    The Sierra Fund spun off EarthJustice, for instance. (Formerly the Sierra Club Legal Defense and Education Fund.

    • lizard19

      yeah, you are probably right. I heard Egger speak a few years ago and I pushed back at his assertion it was do-or-die for the nonprofit sector.

  2. Here’s the money quote:

    Rather than pick up where King and Kennedy left off, with the goal of economic inclusion and equality, they were forced into — or accepted — the narrow confines of “charity,” with its flawed power dynamic that emphasized the redemption of the giver over the liberation of the receiver.”

    They “accepted” the dynamic of having to take money from the .01% for their salaries to do their good deeds. But as John Stauber points out in “The Progressive Movement is a PR Front for Rich Democrats”

    Real movements are not the creation of and beholden to millionaires.

    Real movements work for the liberty of the worker. Real movements are about where “profit” goes. Back to the worker.

    The demonizing of Russia and Putin is, in essence, the demonizing of the idea of the liberation of the “receiver”; the idea of the Russian revolution, flawed as it was. All this gobbly gook about 501 this and 401K that is just more about propping up a failed system than getting out of a rigged game. But, for now, why not change the rules. But just be aware that it is tinkering and won’t really change much. The status quo must be protected.

  3. steve kelly

    All very interesting looking backwards through the lense of politics.

    All tax exempt organizations, however, including the NFL and Chamber of Commerce, divert potential tax revenue away from expenditures for government programs and services. Just because 501(c)(3) status is regulated from direct participation in electoral politics per se, does not mean that those organizations do not have tremendous collective political influence.

    Control, as usual, flows from the top down. Foundations and trusts that give large sums to organizations dictate limits on actions that may harm the reputation of elected officials or govenment agencies. The larger the budget, the greater control over message and program. In the end, there are very few grassroots groups able to compete against the big ones, who in turn fight to protect the status quo, which in turn serves those with the money. Very neat and sanitized, but very corrupt and pretzel-like. The system is broken.

    • JC

      All that trust and foundation money (like Pew) in effect is lobbying money and graft used to control nonprofit missions and operations. It also is used to create organizations dedicated to very political motives — like the Campaign for Americas Wilderness (not).

      And of course, we just need to look at the political work of nonprofits like MWA doing the bidding of politicians and foundations in their support of Jon Tester’s logging bill. They are essentially just a contractor doing Pew’s bidding in under-the-radar politics.

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