Nonprofit Nonpartisanship Threatened

Re-posting! The Johnson Amendment is threatened in the current budget negotiations - see previous post re legislative update from CalNonprofits.  Just one more thing for nonprofits to pay attention to, I know.  If you weren't calling your senators and representatives before, call them now!

I’m going to really try to not make this dry and boring because I want you to all pay close attention.  Stealth efforts are underway to undermine nonprofit nonpartisanship protections. As you all know, the last clause in the section 501(c)(3) tax code prohibits nonprofit organizations, including faith based organizations, from participating in, or intervening in any political campaign on behalf of (or in opposition to) any candidate for public office.  While this may at times feel constricting, and forces working to undermine these protections do cite the limitations on free speech, the benefits are real and include: tax exemption, and eligibility to receive tax-deductible donations.  The conditions for receiving these benefits are: no private profit; lobbying limits (gray area); and nonpartisanship. This is a big deal. 

Why is this a big deal?

1. Nonprofit organizations have the trust of the communities we serve in large part because we are nonpartisan problem-solvers. A weakening of the prohibition on partisan political action risks an erosion of that trust. For example, why would people donate to a mission-driven organization if they don’t trust that their donation will be applied to mission rather than diverted to support a candidate for political office?  It also risks internal strife.  Consider what would happen if board members become distracted from mission and conflicted with each other over partisan disagreements (Send a donation to my candidate!  No! Send a donation to my candidate!).

2. Nonprofit organizations and faith communities alike would become vulnerable to manipulation by candidates and special interests.  Paid partisan advertisements in your weekly sermon anyone?? Special interests would start offering churches and nonprofit organizations money to meet their budgets for quid pro quo, eroding our power as moral and spiritual leaders.

3. Provides a new arena for dark money, or undisclosed political contributions, further weakening our fragile and stressed political system.

What is happening?

President Trump has issued an Executive Order that, while circuitous and confusing indicates that he is suspending enforcement of the Johnson Amendment (that last clause prohibiting nonprofit partisanship). We have yet to understand the impact but it is a signal of his support for eliminating the Johnson Amendment.  Legislative challenges include:

·         A move to repeal H.R. 172 (Johnson Amendment) and strike out all of that final provision.  This would take away all restrictions on using money for partisan, election-related activity.

·         A move to weaken the Johnson Amendment via the Free Speech Fairness Act.  This would include provisions for permitting partisan activity if it is: 1) Made in the ordinary course of the organization’s regular and customary activities in carrying out its purpose.  The slippery slope here is definition.  Take for example, a religious broadcaster reaching a huge audience. An endorsement would take place during regular and customary activities, and have a huge impact that would change the complexion of the nonprofit or faith community mission.  And 2) If it results in the organization incurring de minimum incremental expenses.  Consider the case of a college president sending out an email to all alumni endorsing a candidate or requesting a candidate donation.  Minimal expense; huge impact; and diversion from mission.

The first hurdle is on July 13 where there will be a congressional vote on Financial Services Appropriations.  Section 116 sets up hurdles so that the IRS could never enforce the Johnson Amendment with houses of worship.  If you see this before then, ask your legislators to strip out Section 116.

Attempts to repeal or weaken the Johnson Amendment will probably never be introduced on their own, but rather attached to other legislation.  Our advocacy organizations (CalNonprofits) will be watching for it to be attached to tax reform or debt ceiling related legislation, and will let us know what to do.

What can you do now?  Yes, this is the ask!

If you are a California nonprofit, go to www.GiveVoice.org and sign the community Letter in Support of Nonpartisanship.  So far, 157 California organizations have signed – CalNonprofits is hoping to double that.  Nationally, more than 4,850 organizations have signed.  There is more information and there are more suggestions there.

·         Call your member of congress.

·         Set up in-district meetings.

·         Write local op-eds.

·         Lobby your own networks (yup, I’m lobbying you!).

·         Talk about this!  The Johnson Amendment is not well known or understood and we need to change that in order to be successful.