by Linda M Czipo
On May 4, President Trump signed an Executive Order declaring the executive branch’s goal to “vigorously enforce Federal law’s robust protections for religious freedom.” Of particular interest to the broad-based charitable community is a provision that purports to make it easier for religious institutions to engage in partisan political speech and electioneering – activities that are prohibited for 501(c)(3) organizations under the “Johnson Amendment.” (Another provision concerns whether insurance companies must cover contraception for individuals if their employers opt out for religious reasons.)
The Center for Non-Profits, the National Council of Nonprofits, hundreds of other national non-profit and faith leaders, and nearly 4500 organizations across the country (including 174 in New Jersey) have come out strongly and repeatedly against weakening the Johnson Amendment, which the President vowed on the campaign trail and in his first weeks in office to “totally destroy.”
The President’s Executive Order is likely to face legal challenges from a variety of organizations, some of which reportedly are already in the process of preparing their legal filings. But in the meantime, what does it actually say, and what does it mean for 501(c)(3) organizations? Arguably, it says and means both nothing and everything simultaneously.
Section 2 of the Executive Order reads:
Respecting Religious and Political Speech. All executive departments and agencies (agencies) shall, to the greatest extent practicable and to the extent permitted by law, respect and protect the freedom of persons and organizations to engage in religious and political speech. In particular, the Secretary of the Treasury shall ensure, to the extent permitted by law, that the Department of the Treasury does not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury. As used in this section, the term “adverse action” means the imposition of any tax or tax penalty; the delay or denial of tax-exempt status; the disallowance of tax deductions for contributions made to entities exempted from taxation under section 501(c)(3) of title 26, United States Code; or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit.
The 97-word second sentence in this section directs the Department of Treasury to not penalize an individual, house of worship or religious organization for engaging in speech if it’s similar to communications that have not been found to be illegal campaign activity. In other words, if a communication wasn’t a problem before, it’s not a problem now – which suggests that if a communication was illegal before (such as saying “the church urges you to vote for candidate X”), it will still be illegal.
For those seeking Johnson Amendment repeal, the Executive Order changes nothing about the actual law, which can only be amended or repealed by Congressional action. Electioneering is still prohibited under the law, and organizations that violate the ban still face severe consequences, up to and including possible loss of tax exemption, so the Center for Non-Profits will continue to caution 501(c)(3) organizations to steer clear of electioneering or partisan political activity. Of course, the rights under current law to advocate and lobby – or to campaign or run for office as an individual – also remain unchanged, which is one of the reasons so many believe that repealing the Johnson Amendment is unnecessary.
Although the actual law remains in effect, the Executive Order opens up a new and alarming can of worms. The Executive Order makes a point of directing that religious entities be protected from adverse consequences for engaging in political speech, but it offers no such assurances for non-religious organizations or leaders who may wish to speak based on their own conscience, moral authority, or deeply held beliefs. This preferential treatment of a small subset of the non-profit community is problematic and constitutionally suspect.
Moreover, the Executive Order and the high-profile signing ceremony send a clear signal that the President expects federal officials to go easy on enforcing the law that for three generations has protected non-profits, foundations and the people we all serve. It must be remembered that only the federal government can enforce the tax laws; there is no private right of action to enforce violations of Section 501(c)(3) of the Internal Revenue Code. If the existing laws against electioneering are to be enforced this selectively – or not at all – then those who feel emboldened by this directive will begin to endorse candidates, blurring the distinction between 501(c)(3)s and other organizations and damaging the public good will and reputations of the entire charitable and foundation community.
And further still, by implicitly encouraging (at least some) 501(c)(3) organizations and leaders to engage in political speech under organization auspices, the Executive Order places the entire charitable and foundation community at risk. While it doesn’t – and can’t – directly open the door for the laundering of dark-money contributions for political candidates, it does make organizations vulnerable to pressure from unscrupulous politicians. It’s not hard to imagine a scenario in which an unethical public official could condition a key legislative vote or position on an organization’s political endorsement. The Johnson Amendment helps to insulate organizations from this kind of heavy-handed tactic by providing clear cover for charities to refuse to cave in to such pressures; the President’s Executive Order will undermine these protections immeasurably.
Ultimately, the real losers are the people who turn to non-profit organizations for services, relief, or spiritual guidance in a safe space free from partisan political intrusions. This Executive Order is the first step along a dangerous path of politicizing the organizations and institutions that have historically been best positioned to serve as bridge-builders and problem-solvers in our communities. It offers none of the added – and, we submit, unnecessary – protections that Johnson Amendment opponents wanted and many of the downsides most feared by those who believe that non-profit nonpartisanship matters. We urge Congress to stand firm in maintaining the protections that the Johnson Amendment provides.
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.