Making the Case for Nonprofit Nonpartisanship
Shortly before Congress left Washington, DC for the Easter/Passover recess, broad nationwide coalitions of charitable nonprofits, religious congregations, and foundations made strong statements in support of the protections of nonpartisanship embedded in the federal tax code through the 1954 Johnson Amendment. On April 5, 2017, the Community Letter in Support of Nonpartisanship, signed by nearly 4,500 organizations, sent a clear message to Congress: maintain the current law that protects nonprofit organizations from partisan politics and being hounded for political contributions and endorsements. See the news release. A day earlier, a diverse coalition of 99 religious and denominational organizations delivered a separate letter to House and Senate leaders that emphasized, "The charitable sector, particularly houses of worship, should not become another cog in a political machine or another loophole in campaign finance laws."
Nonprofit leaders are concerned that legislation seeking to repeal or weaken current-law protections could severely harm their organizations and those they serve. Existing stand-alone legislation (H.R. 172 and S.264/H.R. 781) could get inserted in comprehensive tax reform bills, as the House tax committee chairman declared in February, or attached to appropriations or other
measures moving in Congress. Earlier this month, the Governor and Attorney General of Texas sent a letter to 23 Republican in the House and Senate urging swift passage of legislation to weaken the Johnson Amendment, using as their rationale the discredited allegation that preachers are not able to bring “a faith perspective to the pressing political issues of the day.” See Washington Post coverage for the state of play on the issue and go to www.GiveVoice.org for more background information.
Immediate Priority: Funding the Federal Government
When Congress returns next Monday from a two-week recess, it will have only five days to resolve thousands of spending decisions that go into funding the federal government. The existing stopgap funding bill, known as the Continuing Resolution or “CR,” expires on April 28, and the federal government must shut down unless additional funds are appropriated. The regular process for reaching a bipartisan agreement to fund the government through September was thrown into further disarray in recent weeks when the Trump Administration requested additional spending for defense and initial payments for building a wall on the southern border. Senior lawmakers from both parties publicly rejected those requests, but other than
common support for the need to avoid shutting down the government no official plan has been announced.
Uncertainty in Student Debt Forgiveness Program
The student loan forgiveness program is in turmoil as the U.S. Department of Education changes policies and lawsuits challenge loan processing charges and practices. Last week, Education Secretary Betsy DeVos issued a memorandum to the Department’s student aid office withdrawing two memoranda issued by the Obama Administration that focused on helping borrowers manage and discharge their student loan debt. Also, late last year, the American Bar Association filed a lawsuit against the U.S. Education Department seeking to reverse the Department's decision to retroactively refuse to honor loan forgiveness commitments it made under the Public Service Loan Forgiveness (PSLF) to individuals who have - in reliance on those commitments - dedicated their careers to public service. The suit claims the Department of Education approved public service work prior to changing the eligibility requirements, and that individuals made decisions based on the approval that were then retracted. In a legal filing, the Education Department responded that borrowers could not rely on the program’s administrator to say accurately whether they qualify for debt forgiveness.
The Public Service Loan Forgiveness program allows former students to have their remaining government student debt forgiven after they make 120 qualifying monthly payments while working full-time for governments or qualifying nonprofit organizations. The program was established ten years ago and 2017 marks the first time that students are eligible to secure the debt forgiveness. This comes at a time when more than 42 million people owe $1.3 trillion in student debt. CalNonprofits set up the Nonprofit Student Debt Project to
educate, advocate, and engage the nonprofit community on the impact and problem of student debt on the nonprofit workforce and what can be done about it. Its recent survey found that student debt negatively affects staff recruitment, retention, and diversity.
- ICE Suspending Sanctuary Jurisdiction Reporting: Immigration and Customs Enforcement suspended temporarily its recently adopted practice of issuing weekly reports identifying which cities and counties are not cooperating with federal deportation efforts. Often referred to as “sanctuary cities,” localities have been targeted by the Trump Administration for not complying with requests that they detain individuals identified by ICE as subject to deportation. Yet courts have typically sided with the localities that questioned the legality of holding individuals
without due process. Attorney General Jeff Sessions has stated that the Justice Department still plans to withhold federal grants from sanctuary jurisdictions.
- Trump Approves State Curbs on Planned Parenthood: A measure passed by Congress and signed by President Trump last week empowers states to withhold federal funds from Planned Parenthood and other nonprofits providing reproductive health services. The bill overrides a rule adopted late in the Obama administration that required states to distribute federal dollars to qualified health providers – typically nonprofits – for family planning services, including contraception, sexually transmitted diseases, fertility, pregnancy care, and breast and cervical cancer
screening, without regard for whether the providers also performed abortions. Federal law currently prohibits government funding of abortion, except in cases of rape or incest, or to save a woman's life.
New Mexico Donor Disclosure Bill Vetoed
The Governor of New Mexico vetoed a bill that would have defined “independent expenditure” and required charitable nonprofits to disclose the names of donors if engaging in certain activities such as advocacy on ballot measures. The legislation would have required disclosure for most types of political advertising expenditures of more than $1,000. Some groups currently provide this information, but charitable nonprofits are exempt. While framed as promoting transparency and making information
available on “dark money,” the measure could have had a chilling effect on nonprofit engagement in advocacy and discouraged charitable donations. In her veto statement, Governor Martinez explained, “The requirements in this bill would likely discourage charities and other groups that are primarily non-political from advocating for their cause and could also discourage individuals from giving to charities.”
Taxes, Fees, & PILOTs
- Fees & PILOTs: The St. Paul, Minnesota City Council is exploring whether to seek payments in lieu of taxes (PILOTs) from charitable nonprofits to generate revenue lost as a result of a state Supreme Court ruling. Last summer, the court struck down a street maintenance fee assessed against nonprofits, ruling that St. Paul improperly attempted to circumvent the state constitution’s prohibition against taxing the property of charitable nonprofits by disguising a “tax” by
relabeling it a “fee.” To implement the plan for PILOTs, city officials are seeking a formal study by the Citizens League, funded in part by the St. Paul Foundation and the Bigelow Foundation. The study reportedly will include a committee of members of the nonprofit and for-profit sectors.
- Property Taxes: The City of Elgin, Illinois, is considering new zoning regulations to discourage the location of nonprofits in downtown to instead make room for retail, restaurants, and entertainment. The Mayor opposes the restrictions on nonprofits and calls the proposal “very dangerous.” Council staff are researching the legality and precedent of commercial district zoning ordinances.
Government-Nonprofit Contracting Reform Update
Reining in Red Tape
The creation of the White House Office of American Innovation (OAI) should draw attention, once again, to the states as “laboratories of democracy” in identifying and solving problems in government. The new White House office seeks to reduce the federal bureaucracy by implementing private sector solutions to regulatory and process reforms. A number of states have been convening government and nonprofit task forces – some for several years now – that have streamlined and simplified grant and contracting systems. See Partnering for Impact for a more thorough discussion of past collaborations between state governments and nonprofits to enhance performance and reduce costs.
The latest efforts are in North Carolina, where the House of Representatives approved a regulatory reform bill this month that, among other things, would authorize the Joint Legislative Program Evaluation Division to study the red tape that nonprofits experience when providing services pursuant to state grants and contracts. The study stems from research showing that half of North Carolina nonprofits with government grants and contracts are paid late by government agencies and that
three-fourths of these nonprofits experience unnecessarily burdensome application and reporting requirements. A separate bill in North Carolina would create a Department of Health and Human Services working group to examine duplicative administrative requirements for behavioral health service providers.
In Support of Nonpartisanship … in Their Own Words
Politicians give speeches. Policy analysts write position papers. Lobbyists craft talking points. All may be smart, sincere, and finely honed. But nothing compares with the passion, purpose, and prose of frontline nonprofits and foundations when it comes to policy proposals that undermine their ability to advance their missions.
The above statement is made evident by individuals who, when signing their organizations onto the Community Letter in Support of Nonpartisanship, shared their insights about what’s right with current law and what’s wrong with efforts to repeal or weaken nonprofit nonpartisanship that is codified in Section 501(c)(3) as the Johnson Amendment. Here is a sampling of comments from the front lines of community engagement, in their own words.
Nonpartisanship Is Necessary
“We are Democrats, Republicans and Independents all working together as volunteers to support and advocate for the refuge and the sea turtles we all love. Our leaders chose to organize as a 501(c)(3) specifically because being nonpartisan is critical to achievement of our mission. We don't wish to ever find ourselves in a position of resisting pressure from one side or the other to endorse candidates or make campaign contributions.” Friends of the Carr Refuge, Indian
Harbour Beach, Florida
“As a faith-based organization, it is imperative that the pulpits of our church congregations not be co-opted as political allies. Our work depends on a bi-partisan support of issues of justice and love, neither of which can be ascribed to one party.” Lutheran Social Services of the Southwest, Phoenix, Arizona
”Partisanship has no place in the one-on-one personal advocacy our program provides to abused and/or neglected children ages newborn to 18. Please DO NOT AGREE to repeal the Johnson Amendment.” CASA of Cherokee County, Tahlequah, Oklahoma
“Keeping the nonprofit sector separate from partisan politics is absolutely essential to our ability to work for ALL Americans without the suspicion of partisan political motivation. Please do not repeal this important piece of clarifying legislation.” Lancaster County Community Foundation, Lancaster, Pennsylvania
Adverse Consequences of Ending the Protection from Partisanship
“Every dollar that could be coerced from us for a political donation will result in 3 less meals to those in need.” Columbia Pacific Food Bank, Saint Helens, Oregon
“At Summit, we help many underfunded, underprivileged children and adults who are not able to afford mental health treatment themselves. If the bill passes, there will be many who will not be helped. These people will go on throughout life suffering from mental and emotional issues and many parents who will have no support or guidance.” Summit Community Counseling, Taylorsville, Utah
“As a member of the community, a board member for another nonprofit, and a staffer for the Food Bank, I am against the repeal of the Johnson Amendment. The major downside to changing nonprofit electioneering rules is that it would change our focus from policies to politics. This could put us at risk of being held hostage by a board member or donor who demands that we align our organization with their partisan political affiliation.” Regional Food Bank of Oklahoma, Oklahoma City, Oklahoma
Taxpayers Shouldn’t be Paying for Political Views
“I believe tax exempt status is a privilege that comes with some responsibilities. The principles of character and honor, as well as our Christian values, tell us to honor those who bless us. To me, that means we don't take a privilege like tax exempt status and use it to leverage further benefits from the system.” Habitat for Humanity Abilene, Inc., Abilene, Texas
One Bad Apple …
“Tax deductions should be reserved for helping our fellow man or woman and the children of our community. I cannot support allowing nonprofits to engage in politics in any way. Currently nonprofits are able to raise community dollars for the good of the community which reduces the burden on government. Right now the system in not broken and does not need mending.” Texas signer requesting anonymity
And Finally, the Bottom Line
“We exist to do good - Congress should not allow nonprofits to do bad.” Green:Inspired:Art, New York, New York
“The Johnson Amendment helps keep church and politics separate, foundations true to their mission and maintains the public trust. Do NOT destroy it. Thank you.” Kentucky signer requesting anonymity