Don’t Weaken the Existing Ban on Electioneering by 501(c)(3) Organizations

Proposed “Johnson Amendment” repeal would harm 501(c)(3)s 

U.S. Capitol
U.S. Capitol, Washington, DC

by Linda M. Czipo

Since 1954, tax law has contained a provision prohibiting 501(c)(3) organizations from directly or indirectly attempting to influence the election or defeat of any candidate for public office. This ban, also known as the Johnson Amendment for its sponsor, then-Senator Lyndon B. Johnson, applies not only to churches, but to all 501(c)(3) organizations.

During the February 2, 2017, National Prayer Breakfast, President Trump renewed his call for a repeal of the 62-year-old ban, and several different bills have been introduced in Congress to weaken or completely repeal it. The Center for Non-Profits strongly opposes repeal and supports preserving the current law.

The current ban provides an important buffer between partisan politics and charitable or philanthropic works. A hallmark of the charitable community is its ability to unify stakeholders and tackle important problems without regard to partisan labels. As the National Council of Nonprofits has pointed out, if the Johnson Amendment is repealed, charities risk becoming identified more with a specific political party and less as the problem-solvers they are.

Repeal would all but guarantee the infusion of “dark money” into charitable work and would undermine public trust in the integrity of charitable organizations.Dark money” refers to the use of non-charitable entities such as 501(c)(4), 501(c)(6), and other vehicles, for political contributions without the legal requirement to disclose the source of these donations. Under the existing law, 501(c)(3) organizations are barred from accepting or using funds for partisan political purposes (this is often a source of confusion among policy makers, press and the public who are unaware of the clear differences between 501(c)(3) organizations and non-charitable non-profits). If the Johnson Amendment is repealed, donors could turn charitable organizations into conduits to funnel contributions to political candidates and campaigns – and these contributions would be tax-deductible. Charities and foundations would also become vulnerable to untoward political pressures – for endorsements, campaign contributions, and other kinds of support – that would effectively divert scarce resources from public benefit missions to partisan political purposes.

Donor privacy could be at risk. In the wake of the U.S. Supreme Court’s Citizens United ruling and the proliferation of political organizations such as 501(c)(4) entities, 527 political action committees and others, efforts have been mounting at the national and state levels to shine a bright light on money in politics by requiring identification of political donors. Donor privacy has long been considered sacrosanct in the charitable world, and precisely because of the existing ban on electioneering, there is a strong rationale for excluding 501(c)(3) organizations from the donor disclosure requirements targeted at political organizations and activities. If the Johnson Amendment were weakened or repealed, the distinction between 501(c)(3) organizations and political organizations would become effectively meaningless, and donor privacy harder to protect.

Non-profit leaders can already speak out in their individual capacities. Proponents of repeal argue that it is needed on free speech grounds in order to allow religious leaders to express views about candidates and campaigns. But religious leaders, like any individual associated with a charity, are always free to make public statements endorsing or opposing candidates in elections – as long as they do so as individuals and not on behalf or in representation of the institution or with use of its resources. And current law already permits 501(c)(3) public charities (including houses of worship) and their representatives to engage in issue advocacy, limited lobbying, and voter engagement, all on a nonpartisan basis.

Non-profit advocacy is a critical part of public discourse and sound public policy. The current, longstanding ban on electioneering helps to preserve the integrity of, and trust in, charities and foundations, and also shields them from untoward pressures that could undermine their independent advocacy voice. Individuals who wish to endorse candidates should do so in their individual capacities, and organizations that wish to become involved in partisan politics should use one of the other vehicles, such as 501(c)(4), Section 527, or other non-charitable structures available for this purpose. Repealing the Johnson Amendment would cause incalculable damage to charitable and philanthropic organizations and to the public causes we serve. The current law should be preserved.

For more information about how you can help to preserve the nonpartisanship of our nation’s charitable and philanthropic organizations, contact us at the Center.

Linda M. Czipo is President & CEO of the Center for Non-Profits, New Jersey’s statewide umbrella organization for the charitable community. Through advocacy, public education, technical assistance and cost-saving member services, the Center works to build the power of New Jersey’s non-profit community to improve the quality of life for the people of our state. 

 

 

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2 Comments

  1. Your argument re: Donor privacy is, I would contend, your strongest. Unfortunately, your argument that non-profit leaders, as well as church leaders, can speak out as individuals, while technically true is practically false. The news is full of instances where a business or organization receives negative press because of the public statements of an officer or even an employee. Our attorneys strongly advise that no employee of our organization make any public comment that might be construed to be political in nature. That includes social media posts. Our organization provides services to veterans and we cannot make comment about legislation dealing with the Veterans Administration because that might be deemed political by an observer.

  2. Dear Gene,

    Thanks so much for taking the time to comment.

    I think the question of whether leaders are, in practical terms, effectively precluded from speaking out on the issues is highly dependent on the philosophies of the individual organization. Certainly organizations should take care to adopt policies and train staff, board and volunteers in order to avoid crossing the line into illegal partisan activity or electioneering. Assuming that these laws are obeyed, whether an organization or its representatives decide to become involved in public policy (through advocacy and lobbying) is obviously a question that its board and leadership should consider very carefully. But many organizations and leaders do engage in advocacy regularly and to great effect, advancing their organization’s mission significantly for the people and causes they serve (see http://www.standforyourmission.org). In your case, if the issue is important enough, perhaps the potential benefits of speaking out (including the opportunity to educate and enlighten your observer as well as promote policies that benefit your constituents) might outweigh the perceived benefits of keeping silent. Either way, I’m not sure how repealing or weakening the Johnson Amendment would actually address the problem you’re describing.

    There’s also the important question of the balance between free speech rights of employees (on their own time and with their own resources) and the employer’s requirements; perhaps we’ll invite an attorney to post a future guest blog on this topic.

    The Alliance for Justice’s Bolder Advocacy site (www.bolderadvocacy.org ) has a wealth of information to help organizations navigate the rules, including fact sheets (http://www.bolderadvocacy.org/wp-content/uploads/2012/05/Election_Activities_of_Individuals_Associated_with_501c3_Organizations.pdf ), sample election season policies for 501(c)(3)s (http://www.bolderadvocacy.org/wp-content/uploads/2014/07/Sample_501c3_Policy_for_Election_Season.pdf ) and more.

    I appreciate your taking the time to weigh in, and hope we can keep the conversation going.

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