Congress Increases Efforts to Politicize Nonprofits
Nonprofits Need to Act Now to Protect Their Way of Life
Last week, a majority of the U.S. House Appropriations Committee – relying on misleading information, and ignoring express warnings – voted to advance an unconstitutional and unworkable provision that would forever taint all charitable nonprofits with the rancor of partisan politics, dividing boards, destroying the public’s trust in 501(c)(3) organizations, and making it far more difficult to raise funds to advance missions. Unless charitable nonprofits, houses of worship, and foundations immediately engage to protect their way of life in serving the public free from causic partisanship, they will be tarnished by special interests seeking to manipulate and polarize the 501(c)(3) community for their own
There is real urgency, because the full House could vote on the disputed appropriations bill as early as next week. Even if they vote later, your voice is needed to inform Representatives and Senators now to block other bad legislation. This Special Edition of Nonprofit Advocacy Matters is designed to highlight the immediate threats to the nonprofit community, provide background and context to the benefits of nonprofit nonpartisanship, and lay out immediate action steps all readers can take to strengthen our collective advocacy position in support of nonpartisanship. Learn more by going to www.GiveVoice.org.
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House Appropriations Committee Votes to Politicize Nonprofits
Last week, the U.S. House Appropriations Committee approved a spending bill for fiscal year 2018 that includes an extraneous provision or rider (Section 116) making it virtually impossible for the Internal Revenue Service to enforce the law against certain nonprofits for even the most egregious violations of the law requiring nonprofit nonpartisanship, the law sometimes called the Johnson Amendment.
If It Just Gives Churches a Free Pass to Violate the Law, Why Should I Care?
All 501(c)(3) orgs should recognize that -
• Even if only a few groups take contributions they receive for their missions and redirect funds to give to political candidates, every donor will be reluctant to give to other groups for fear that their donations will likewise be misused.
• Dollars diverted to Republican churches or Democratic churches are dollars denied to legitimate nonprofits struggling to fund needed and appreciated services in communities. Do you have current donors who would jump at the chance to get a tax deduction and fund their partisan agendas? Can you be sure they will stay with you and pass up the tax deduction?
• When the guaranteed constitutional challenge (Establishment Clause) is won in the courts, is this Congress likely to accept the judgment, or are we likely to see renewed efforts to repeal and/or weaken the Johnson Amendment as applied to all of us?
Weakening the protections of the Johnson Amendment for any of us weakens it for all of us.
The provision essentially gives churches and their auxiliaries a free pass for violating the law that prevents charitable nonprofits, including houses of worship, and foundations from endorsing or opposing candidates or diverting nonprofit assets to fund political campaigns. The rider offers no reductions or lessening of the restrictions on enforcement against secular organizations and leaders, thus creating a framework that explicitly encourages discriminatory enforcement of the law.
During the Committee's debate, an amendment was proposed to strike Section 116 from the bill. The chief proponent of gutting the Johnson Amendment, Rep. John Culberson (R-TX), presented misstatements of fact and law in defense of his position, citing one situation from more than 20 years ago not involving the IRS as his only proof of alleged widespread abuse by the IRS of speech rights of churches. Eight Representatives spoke in support of removing the rider, expressing concern about the negative impact of partisan politics on the integrity of houses of worship and nonprofits, while pointing out that 501(c)(3) organizations retain their ability to speak to the issues of the day without restriction.
When votes were cast, the motion to remove the harmful rider failed by a relatively close vote of 24 to 28. The vote in support of nonpartisanship was actually bipartisan as two Republicans, Charles Dent (R-PA) and Scott Taylor (R-VA), voted with all Democrats to remove the measure that would make it virtually impossible for the IRS to enforce the Johnson Amendment for even the most egregious violations.
Many in the nonprofit community believe the rider is fatally flawed in that it would erect unconstitutional and unreasonable hurdles on enforcing the law that ensures nonpartisanship. If enacted, the provision would damage public trust in all charitable nonprofits as one segment of the community, perhaps even just a few churches, invite partisan politics into the sector.
Other Harmful Legislative Proposals Looming
The legislative challenge described above demonstrates that the effort to repeal or weaken the law on nonprofit nonpartisanship is very real and remains a serious threat to the nonprofit and philanthropic communities. Multiple bills to repeal or weaken the Johnson Amendment are pending in Congress, any one of which could be attached to must-pass legislation.
In addition to the Financial Services rider, three other bills would gut protections in current law that shield nonprofits from demands for political endorsements and campaign contributions. One bill, H.R. 172, would completely repeal the “no partisan politicking” provision, subjecting nonprofits to demands/requests to get involved in partisan political electioneering, including using charitable, religious, and foundation assets to make political donations. Such a move would not only allow people to get tax deductions for making political donations, but also force the public to effectively be
subsidizing that speech by others. Two other bills, S.264 and H.R. 781, would substantially weaken the law by allowing leaders of individual 501(c)(3) entities to endorse candidates for public office and engage in some partisan electioneering activities.
The appropriations rider also shows that efforts to undermine the Johnson Amendment can come in the form of additions to other legislation. Republican leaders in the House reportedly are considering combining all 12 appropriations bills into one mammoth or omnibus spending bill to be voted on the last week of July. In the coming weeks, the Senate and House may consider other legislation, like raising the federal debt ceiling before leaving for the August recess. In the fall, tax writers are seeking to address comprehensive tax reform in earnest; the Chairman of the House Ways and Means Committee announced his support last winter for inserting repeal of the Johnson Amendment into his draft of tax reform. All of these threats make
clear that nonprofits must remain vigilant to ensure the wellbeing and effectiveness of the work of 501(c)(3) organizations is not undermined through uninformed attacks on the Johnson Amendment.
History and Background on the Johnson Amendment
Section 501(c)(3) of the federal tax code establishes three conditions that organizations must comply with to receive the special benefits of being eligible to receive tax deductible donations and tax-exempt status. The third condition provides that an organization may "not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office." It is sometimes called “the Johnson Amendment” after then-Minority Leader Lyndon Johnson (D-TX), who first proposed the amendment in 1954. The amendment was accepted without controversy by Finance Committee Chairman Milliken (R-CO) and Senate Majority Leader
Knowland (R-CA), passed by the Republican-controlled Senate, and incorporated in the Internal Revenue Act of 1954 that President Eisenhower signed on July 29, 1954. Importantly, the provision was incorporated into the bi-partisan Tax Reform Act of 1986 (P.L. 99-514), and strengthened the following year in the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-391), both bills signed by President Reagan. In short, the protection of charitable nonprofits, houses of worship, and foundations has always been a bi-partisan concern, indeed a nonpartisan concern, of Congress. That is, until recently.
The Public Strongly Supports Keeping the Johnson Amendment
The vast majority of Americans and charitable nonprofits, houses of worship, and foundations firmly believes that 501(c)(3) organizations should remain dedicated solely to the public good and should stay away from base partisan politics. We encourage you to consider the following facts:
- Nearly three out of four American voters (72 percent) want to keep the current rules protecting 501(c)(3) organizations from partisan political activity, according to a poll conducted in March 2017.
- 89 percent of evangelical pastors oppose the idea of clergy mixing partisan politics and religion by endorsing candidates from the pulpit, according to a survey conducted in February 2017 by the National Association of Evangelicals.
- Nearly 100 national and state religious and denominational organizations signed a letter to Congress stressing: “People of faith do not want partisan political fights infiltrating their houses of worship. Houses of worship are spaces for members of religious communities to come together, not be divided along political lines; faith ought to be a source of connection and community, not division and discord.”
- More than 3,000 religious leaders (so far) have signed a letter declaring they are “strongly opposed to any effort to repeal or weaken current law that protects houses of worship from becoming centers of partisan politics,” in part because “issuing endorsements would be highly divisive and have a detrimental impact of congregational unity and civil discourse.”
- More than 4,850 charitable, religious, and philanthropic organizations (so far) from all 50 states have signed the Community Letter in Support of Nonprofit Nonpartisanship, demonstrating strong opposition to proposals to politicize our community by repealing or weakening the Johnson Amendment, in part because “nonpartisanship is a cornerstone principle that has strengthened the public’s trust” in the charitable community by screening out “doubts and suspicions regarding ulterior partisan motives … as undoubtedly would occur if even just a few charitable organizations
engaged in partisan politics.”
What You Can Do To Protect Nonprofits
All individuals and organizations committed to nonprofit nonpartisanship – and the effectiveness and community unity it generates – need to take actions to get informed and lift their voices. Here are three (of many) actions you can take now:
- Sign the Letter: Join more than 4,850 organizations – charitable nonprofits, religious institutions, foundations, and for-profits from across the country – that have already taken a stand by signing the Community Letter in Support of Nonpartisanship and showing that we intend to resist any and all efforts to politicize our sector by weakening or repealing this longstanding protection in federal tax law that keeps 501(c)(3) organizations away from endorsing, opposing, or contributing to political candidates. Not sure if your organization has already signed? Check here.
- Spread the Word: Forward this message to three or more colleagues and encourage them to sign their organizations onto the Community Letter. Click here for an easy way to do it.
- Make the Calls: Call your Representative and two Senators and tell them to preserve current law that protects charitable nonprofits, including houses of worship, and foundations, as well as the millions of people we serve every day. Letters are good, personal meetings are great, but a phone call from you now is quick, easy, and effective. You can call the main Capitol switchboard at (202) 225-3121 and ask for your elected officials.
The following are the remarks by Rev. Dr. Rick Schlosser, Executive Director of the California Council of Churches and California Church IMPACT, on a July 12 webinar on the Johnson Amendment that his organization co-hosted with CalNonprofits, the state association of nonprofits in California. After hearing Rev. Dr. Schlosser explain the faith perspective on nonpartisanship, we can only add, “Well said.”
“Separation of church and state is the best protection that religion could possibly have. It puts all faiths on an even footing, and it prevents the dominance of any one over others.
“Demanding the rights to endorse partisan candidates while still being a tax-exempt organization is a foolish notion. Once churches start down that practice they become vulnerable to manipulation by moneyed candidates and by special interests. They open themselves to shredding their key role as moral and spiritual leaders and risk decimating their own ranks – not over their faith principles but around competing and often base politics.
“I’ve never talked to a pastor yet who has not wondered how they are going to meet their budget for that year. And can you imagine what the consequences could be if special interests started offering churches money to meet their budget and oh, by the way, later you find out that there’s a quid pro quo required for that.
“Now congregations, nonprofits too, may always speak to principles. They may always advocate for nonpartisan issues linked to their mission and work. You can always advocate for or oppose issues and legislation.
“But the minute they demand the freedom to be partisan or support or oppose individual candidates, they not only lose their justification for tax exemption, they lose their power as moral and spiritual leaders. Now that may be an unintended consequence, but it is not an unforeseen one.
“Preserving the Johnson Amendment serves both state and religion well. And one reason why this is so urgent today is that an amendment to weaken enforcement of the Johnson Amendment will be considered in the House tomorrow, so we need immediate action on this issue.”