• September 22, 2014

Politics and Philanthropy

Tuesday, February 12, at 12 noon, U.S. Eastern time

The 2008 election is already proving to be one of the most exciting in recent memory.

But while the campaign is getting a lot of attention, many nonprofit leaders are unsure about what the ultimate result will mean for charities. They are also unsettled about how they can appropriately take part in the election process without violating federal laws and alienating supporters.

The Guest

Some of the top experts on philanthropy and politics will be available to answer your questions about the election - and what it means for your charity.

A transcript of the chat follows.

Peter Panepento (Moderator):
    Welcome to today's live discussion about the 2008 election and philanthropy. The election is certainly on everyone's minds today here in the Washington, D.C., area, where voters are casting their ballots in the primary. What will those votes mean to nonprofit organizations and foundations? Hopefully today's discussion can offer some insights. And to answer your questions, we have two fantastic guests -- Kay Guinane, the director of nonprofit speech rights for OMB Watch here in Washington, and Laurette Edelmann, assistant director of the New Hampshire Center for Nonprofits. Please feel free to submit your questions and join the conversation.

Kay Guinane:
    I am pleased that the Chronicle of Philanthropy has chosen this important topic for discussion. While I can share what we know from IRS Revenue Rulings, statements and enforcement actions, there are no set rules defining what charities and religious organizations can and cannot do when it comes to nonpartisan voter engagement work. That means I cannot give definitive answers to many questions. Also, my answers are not intended to be legal advice, and should not be used for that purpose.

Question from Jill Leininger, Vermont Studio Center:
    The 2008 appropriation for the National Endowment for the Arts (NEA) is the highest its been since 1992 ($144.7 million). As an arts advocate, I'm curious to hear about the various candidates' records on funding arts agencies in their states. Who has the best track record? Do you think a potential recession threatens this positive trend of reinvestment?

Kay Guinane:
    The focus of the NH Nonprofit Primary Project was educating the presidential candidates on the needs and impact of the nonprofit sector as a whole, and we did not ask industry-specific questions at the bird-dogging events. We tracked the answers to 3 basic questions: 1) How the candidate has interacted with nonprofits in their life/career; 2) How would they strength the economic and social impact of the sector; and 3) How would they partner with us to achieve their vision for America. You can see/read our results on our website, http://www.nhnonprofits.org.

Peter Panepento (Moderator):
    For more on the efforts by Laurette's Edelmann's group's efforts to interact with the candidates as part of the New Hampshire Primary Project, see the Chronicle's recent coverage: http://philanthropy.com/free/articles/v20/i07/07004901.htm

Question from Peter Panepento:
    In recent years, the IRS has taken an aggressive approach to patrolling whether nonprofit groups are crossing the line when it comes to supporting individual candidates. Do you think that this effort is prompting groups from engaging their supporters in the political process? Kay Guinane:
    There is no way to measure things that don't happen- so it is difficult to know how much the IRS enforcement program has prevented 501(c)(3) organizations from engaging in the political process. Their engagement must be nonpartisan about candidates, but not about issues. But our fear is that highly publicized IRS enforcement cases discourage groups from speaking out on issues or encouraging their supporters to vote.

One reason we have this problem is that there are no clear rules defining what is and is not partisan voter engagement activity. OMB Watch believes the IRS should develop clear rules so that any 501(c)(3) organization could get involved and know they are safe from IRS investigation or sanction. The IRS rules defining lobbying are clear, and we believe it is possible to do the same for nonpartisan voter engagement activities.

Kay Guinane:
    The NH Nonprofit Primary Project was developed as a pilot for other states/associations to intersect with presidential candidates and begin meaningful discussions about the needs, strengths and challenges of the nonprofit sector. When asked our 3 project questions, candidates at first answered with lofty "50,000 foot" platitudes, but with more education, most moved into deeper discussions about what a real asset the nonprofit sector is to the country.

Kay Guinane:
    Here are two resources for 501(c)(3) organizations interested in voter engagement work:

1. NPAction.org, the online library for nonprofit advocacy, has case studies of successful voter engagement efforts, as well as how to information and links to resources.

2. The Alliance for Justice provides technical assistance to nonprofits on advocacy questions. Go to their website at http://www.afj.org, and at the bottom of the homepage there is a link for technical assistance.

Question from Peter Panepento:
    How much attention are the candidates paying to issues that are important to the nonprofit sector? Are these issues getting crowded out by other concerns such as the war in Iraq and the economy?

Kay Guinane:
    Hi, Peter. I can tell you that the candidates were paying a lot more attention to our issues at the end of the project than they were at the beginning! Educating the candidates (over and over) about the overall economic impact of the sector in the country (employing 10% of America's workforce, representing 8% of the GDP) was critical. Responses to our 3 questions ranged from "You are doing the Lord's work" to "I have just finalized a nonprofit position paper." Though the issues of the Iraq war and the economy certainly generated more questions at the bird-dogging events, by the end of the project, the candidates were specifically identifying how nonprofits play key roles in each.

Question from Peter Panepento:
    Can you give some examples of the types of interactions the candidates have had with the people involved with the New Hampshire Primary Project?

Kay Guinane:
    Our project members intersected in many ways because of the unique NH primary system. We "bird-dogged" at Town Hall meetings, at "Politics & Eggs" events hosted by local businesses, at a candidate Q&A event hosted by our organization, in local diners where the candidates recognized our members and shared a meal with them, and met one-on-one in the back hallways at candidate forums. We were able to ask our questions of all the major presidential candidates -- their responses and video can be found at our website, http://www.nhnonprofits.org.

Question from Sarah Sampsel:
    Should nonprofits be barred from making political endorsements? Does OMB Watch think charities should be allowed to advocate for or against individual candidates or parties? Kay Guinane:
    OMB Watch believes the ban on partisan activity by 501(c)(3) organizations serves two useful purposes: it gives society a nonpartisan sector, and it protects charities and religious organizations from political pressure to donate to campaigns. All other nonprofits can endorse candidates, and individuals who are leaders or staff of 501(c)(3) groups can endorse candidates in their individual capacity.

We have opposed bills that would allow religious organizations to endorse candidates and take sides in elections. That is because we think it would be unfair to exempt religious groups from the ban and not other 501(c)(3)s, and also because a nonpartisan sector can play an important public role in voter registration and education activities.

Peter Panepento (Moderator):
    We've gotten some interesting questions thus far. But we definitely have time for many more. If you have a question about politics, the election and charities, please click on the "ask a question" link and fire away.

Question from Peter Panepento:
    What types of campaign activity are acceptable for tax-exempt organizations? Kay Guinane:
    There are many tupes of tax-exempt organizations, from day care centers to veterans organizations to farmer coops. The only category that is barred from favoring or opposing candidates in elections is 501(c)(3), which includes charities, religious, educational and scientific organizations.

These groups can do all the nonpartisan voter engagement work they wish, but they cannot directly or indirectly support candidates. So there is no allowable campaigning for candidates for these groups, but they can run a "campaign" to get more people registered to vote.

Question from Peter Panepento:
    Can you offer an example or two of nonprofit groups that have run successful voter education campaigns? What elements are needed to make them successful under the framework of IRS rules?

Kay Guinane:
    The Western States Center's Voter Organizing Training and Empowerment Project is one example. They train nonprofits on how to do voter engagement work. A detailed description is on NPAction.org's homepage. In addition, the Vote for Homes! Coalition in Pennsylvania registered over 8,500 voters in 2006, and at the same time used the election to promote their mission of helping the homeless. Details are at http://www.npaction.org/article/articleview/732/1/222.

Another example of nonpartisan civic participation is Rock the Vote's online voter registration widget, which is available free to any nonprofit to post on their website. It is a http://www.rockthevote.com. It allows visitors to a group's website to sign up for issue updates from the group at the same time they register to vote.

Question from Peter Panepento:
    How much information should candidates be giving about their past donations to charitable organizations? Does their personal giving offer any indication of how they will set priorities once they are in office?

Kay Guinane:
    Most candidates were very open about their past involvement with nonprofits -- we did not ask them about their donations specifically. The candidates who spoke of their volunteerism, time spent on boards, and time as employees of nonprofits seemed to engage much more quickly in conversations with us about ways they would strength the sector economically and socially. Examples include a candidate who has been active in arts/music organizations who spoke of the importance of the arts in our society and the need for increased funding for the schools in this area, and another candidate whose interest in helping working parents spoke of eliminating hurdles and/or increasing gov't subsidies for agencies that provide childcare.

Question from Stacy Palmer, The Chronicle of Philanthropy:
    Robert Egger triggered a debate in our pages last summer by suggesting that nonprofit groups should be allowed to directly engage in partisan politics. Do you think that would be a good thing or is it dangerous for nonprofit groups to get more directly involved in campaigns? (The article is available at http://philanthropy.com/premium/articles/v19/i16/16005901.htm)

Kay Guinane:
    I think it would be dangerous for 501(c)(3) organizations to take sides in campaigns. But I think it would be very healthy for them to become more involved in the election process, educating voters and helping make sure the electoral process is working like it should.

But if we take sides for or against a candidate or a political party, we become targets for political fundraisers and donors that don't necessarily care about our mission. We would subject our issue advocacy to campaign finance regulation more than it already is. That would threaten donor privacy, and potentially limit tax deductibility of contributions.

It is possible for any group that wants to takes sides on candidates to form an affiliated 501(c)(4) organization, which can endorse candidates, rate or compare candidates, etc.

Question from Stacy Palmer, The Chronicle of Philanthropy:
    William Schambra suggested in our pages that nonprofit groups could suffer a backlash from the public if they engage in too much advocacy -- especially if they seem to be encouraging government to spend more money. Do you think that is a valid concern? (His article is online at http://philanthropy.com/premium/articles/v20/i05/05004701.htm)

Kay Guinane:
    I'm not sure what "too much" advocacy is, but I do believe it is a valid concern if we do not continue our efforts to educate the public about the economic value of the services that nonprofits provide and the economic result if those services are not provided.

Question from Stacy Palmer, The Chronicle of Philanthropy:
    If you could write the platform on nonprofit issues for the party conventions this summer, what issues would you focus on?

Kay Guinane:
    Our core issue would be that the nonprofit sector has a voice and seat at policy tables at all levels of government.

Peter Panepento (Moderator):
    Our experts still time for more of your questions. Hit the "ask a question" link and type in your question to get their answers.

Question from Peter Panepento:
    Kay, you make an excellent point about c4 organizations. Are these organizations working effectively -- or are the laws that govern c4's flawed, as well? Kay Guinane:
    There are many successful partnerships between affiliated 501(c)(3) and (c)(4) organizations. IRS rules do not limit how much lobbying 501(c)(4)s can do, but their electoral work cannot be their major purpose. (A nonprofit whose major purpose is to influence elections is tax exempt under Section 527 of the tax code.)

The sticky question for 501(c)(4)s is how much electoral work they can do before it becomes their major purpose. The IRS has not cleary defined this. It is also important that the electoral work be related to the 501(c)(4) group's overall mission.

The Alliance for Justice has a good publication about the law for (c)(3) and (c)(4) groups working together: It is called The Connection and can be ordered through their website http://www.afj.org.

The Western States Center is a 501(c)(3) organization with an affilated (c)(4). You can see more about them at http://www.westernstatescenter.org

Question from Ann Lehman:
    What percentage of nonprofits do you think are currently involved in any way with elections issues and what do you suggest to increase this amount?

Kay Guinane:
    Based on our experience with the NH Nonprofit Primary Project, the percentage is low -- partly due to staffing levels that do not allow for additional activities involving these issues and partly because of uncertainty around what is legal. Educating nonprofit groups about what they can and cannot do was a big part of our initial activities. Our project legal advisor developed a set of guidelines to assist organizations and their boards; they can be found on our website. We will continue our education efforts as we begin to look to state and local government officials who are setting policies impacting the sector. We are in the process of compiling an educational video that can be used by organizations in other states to begin their own bird-dogging activities.

Question from Peter Panepento:
    Have you gotten any response from current lawmakers about clarifying the campaign rules for nonprofits? Kay Guinane:
    We have not had any response yet, although last year several members of Congress wrote to the IRS protesting enforcement action that appeared to punish issue advocacy critical of the President's war policies. In 2005 Rep. Adam Schiff (D-CA) sought a GAO investigation into the IRS's new enforcement program, but it did not go forward.

In the long run, it will help if 501(c)(3)s can agree on a proposed set of clear rules and encourage Congress and/or the IRS to adopt them. This will be a long term effort, but it is badly needed.

Question from Ann Lehman:
    What do you think are the most pressing issues nonprofit sector should be asking candidates about in the 2008 election?

Kay Guinane:
    How will they strengthen the economic and social capacity of the sector? How will they partner with the sector to achieve their vision for America?

The most important thing for us to do is to keep asking these questions until they answer with specifics. Many candidates initially answered with "increase volunteers" when we began our project. By asking pointed follow-up questions such as how they would ready the sector to receive more volunteers and how that would address the issue of sustainability, the candidates had to think deeper and idenfity more concrete ideas.

Kay Guinane:
    Thank you for the opportunity to participate in the event. I hope that 501(c)(3)organizations will not hesitate to be good nonprofit citizens in this election year, and do what they can to inform voters and help election officials make the process work smoothly.

Peter Panepento (Moderator):
    Thank you to everyone who joined us for today's live discussion on the election and charities.

Join us next Tuesday at noon Eastern time for a conversation about how nonprofit groups can do to manage their way through a possible recession. Our panel includes author Michael Seltzer and fund-raising expert Robert Sharpe.

Add Your Comment

Commenting is closed.

  • 1255 Twenty-Third St, N.W.
  • Washington, D.C. 20037
subscribe today

Raise more money and increase awareness with trusted insight.