Protecting the Johnson Amendment and Nonprofit Nonpartisanship

For 65 years, an important provision in the federal tax code has successfully protected charitable nonprofits, religious congregations, and foundations from being hounded by politicians, political operatives, and paid political consultants seeking political endorsements, financial contributions, and more. That provision, sometimes called the Johnson Amendment, has in recent years been threatened by bills and extraneous riders to spending legislation seeking to completely repeal or substantially weaken this longstanding protection in the law. Although couched as attempts to promote religious freedom and free speech, the legislative proposals would have the effect of politicizing and thereby erasing the public’s high trust in charities, houses of worship, and foundations to benefit politicians and paid political consultants. In addition to legislative action, politicians encourage charitable organizations to endorse candidates, essentially encouraging them to violate the law.

Where We Stand

“The National Council of Nonprofits has long held that the public’s overall trust in the sector would diminish and thus limit the effectiveness of the nonprofit community if individual 501(c)(3) organizations came to be regarded as Democratic charities or Republican charities instead of the nonpartisan problem solvers that they are.”

Public Policy Agenda

The National Council of Nonprofits has consistently expressed our position in favor of “preserving the integrity of charitable nonprofits by supporting the tax-law ban on electioneering and partisan political activities.”

Status

Previous legislation, including budget deals and versions of the 2017 federal tax law, included provisions that would have significantly undermined the longstanding Johnson Amendment, the provision of federal tax law that protects charitable nonprofits, houses of worship, and foundations from demands from politicians and others for endorsements and other support. Bills have been reintroduced to weaken the protection.

If enacted in the future, anti-Johnson Amendment provisions would politicize charitable nonprofits, houses of worship, and foundations by plunging them into the caustic partisanship that bedevils our country. Notably, the proposals would encourage creation of sham organizations, divert contributions from other nonprofits to fund partisan churches, and bring discredit to the broad charitable nonprofit community. This change to the Johnson Amendment would be contrary to the views of the vast majority of organizations that benefit from the law, as reflected in the Community Letter in Support of Nonpartisanship, signed by more than 5,800 organizations in all 50 states, in the Faith Voices letter signed by more than 4,300 faith leaders, in the separate letter signed by more than 100 denominations and major religious organizations, and the law enforcement community, as well as polls showing that 72 percent of the public support keeping the Johnson Amendment in place and nearly 90 percent of evangelical pastors who say it is wrong for preachers to endorse candidates from the pulpit.

More recently, individuals in the Administration and some in Congress encouraged charitable organizations to violate the Johnson Amendment by claiming that it is not being enforced or has been “gotten rid of.” These claims have been proven false. The law remains in effect and any nonprofit engaging in partisan, election-related activities risks federal and state enforcement actions, as well as earning the disrespect of legitimate charitable organizations and funders in their communities.

Why It Matters

The tax-law provision is the final clause of Section 501(c)(3), which provides that in exchange for tax-exempt status, a charitable nonprofit, foundation, or religious 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.” Since 1954, that language has served to protect charitable nonprofits and foundations – and the donating public. It helps to ensure that organizations dedicated to the public good in communities remain above the political fray.

Our society is better today, because 501(c)(3) organizations operate as safe havens from the caustic partisanship that currently is bedeviling our country, as places where people can come together to actually solve community problems rather than just posture and remain torn apart. Repeal or revision of the law would damage the integrity and effectiveness of all charitable nonprofits and foundations.

Background

Congress first exempted from taxation organizations operating “solely for charitable, religious, or educational purposes” in 1894. Since then, Congress has added amendments expanding the list to include several other entities that can qualify for tax exemption. Congress also has added three major conditions: to receive the benefits of tax exemptions, those organizations (1) cannot pay out profits (no private inurement); (2) spend a substantial part of their activities lobbying; or (3) engage in partisan, election-related activities (the provision at issue now). Organizations can do any of those, of course, but then they risk losing their tax-exempt status.

Congress adopted the main part of the provision being challenged now in 1954 when Senate Minority Leader Johnson offered it as an amendment – which is why it is sometimes called “the Johnson Amendment.” Additional language was added to that provision in 1978 (the “or in opposition to” parenthetical): “does 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."

Efforts have been made to repeal or weaken the Johnson Amendment by stand-alone legislation or attachment to must-pass legislation such as appropriations bills. President Trump issued an Executive Order on May 4, 2017 in an attempt to weaken the Johnson Amendment. Later that year, the Justice Department submitted a brief in Freedom From Religion Foundation v. Trump, defending the Executive Order while raising questions about the substance of the Order. The government admitted, “The text of the Executive Order itself does not purport to exempt religious organizations from the political campaign activity provisions of § 501(c)(3), nor does it privilege religious organizations over secular organizations. Rather, … [it] merely directs the Government not to take adverse action against religious organizations that it would not take against other organizations in the enforcement of the § 501(c)(3) restrictions.”

Language that would have undermined the Johnson Amendment was excluded from the final version of the 2017 federal tax law by the Senate Parliamentarian because it would violate the Byrd Rule, a technical Senate requirement. The House-passed tax reform legislation, Tax Cuts and Jobs Act (H.R. 1), included a provision, at Section 5201, that would have created a giant loophole in the absolute ban on nonprofit politicking by enabling all 501(c)(3) organizations to endorse candidates for public office when communicating “in the ordinary course of the organization’s regular and customary activities,” such as speaking on weekly or daily broadcasts or publishing election editions of magazines, and when spending “not more than de minimis incremental expenses,” an undefined term. The nonpartisan Joint Committee on Taxation determined that the House language would have cost the U.S. Treasury more than $2 billion because donors to political campaigns would likely shift their giving to newly partisan churches and charitable organizations to secure – for the first time – a charitable tax deduction for their purely political giving.

Statements of Support for Nonprofit Nonpartisanship

• Baptist Joint Committee for Religious Liberty
• BoardSource
• Council on Foundations
• United Philanthropy Forum (formerly the Forum of Regional Associations of Grantmakers)
• Independent Sector
• National Association of State Charities Officials
• National Council of Nonprofits
• Religious and Denominational Organizations
• Rockefeller Brothers Fund
• More

Editorials

• Johnson Amendment crucial as a protection of church, state separation, Tulsa World, Tulsa, OK, February 17, 2019.
• Charitable, This Isn't, The Columbian, Vancouver, WA, July 29, 2018.
• Don't weaken the ban on politics in the pulpit, Los Angeles Times, Los Angeles, CA, March 6, 2018.
• The House tax bill unleashes a dangerous avalanche of campaign cash, The Washington Post, Washington, DC, November 18, 2017.
• More

Op-Eds and Letters to the Editor

• The Johnson Amendment's Fate After the 2018 Elections: The Fight Continues, David L. Thompson, Vice President of Public Policy, National Council of Nonprofits, November 7, 2018.
• Could This Political Environment Get More Toxic for Nonprofits? The Answer Is Yes -- Unless You Act Today, Nonprofit Quarterly, July 24, 2018, Tim Delaney, President and CEO of the National Council of Nonprofits.
• Setting the record straight on charities and political speech, The Hill, Washington, DC, March 14, 2018, Tim Delaney, President and CEO of the National Council of Nonprofits.
• Nonprofits should educate voters, not endorse candidates, The Journal Record, Oklahoma City, OK, February 28, 2018, Marnie Taylor, President and CEO of the Oklahoma Center for Nonprofits. 
• There's a wolf in sheep's clothing hiding in the GOP tax bill, The Hill, Washington, DC, November 8, 2017, Tim Delaney, President and CEO of the National Council of Nonprofits and Amanda Tyler, Executive Director of the Baptist Joint Committee for Religious Liberty.
• Congress, defend the common law and common sense of nonpartisanship, The Hill, Washington, DC, September 7, 2017, Karen Gano, Board President of the National Association of State Charity Officials, and Tim Delaney, President and CEO of the National Council of Nonprofits.
• More

News Releases

• National Council of Nonprofits Communicates Nonprofits' Priorities to Incoming Chairs of Tax Committees, National Council of Nonprofits, November 26, 2018.
• Nonprofits to Politicians: We Are Neither Your Pawns Nor Your Piggybanks, National Council of Nonprofits, July 19, 2018.
• Nonprofit, Foundation Leaders Oppose Ban of Amendments to Remove anti-Johnson Amendment Rider from Appropriations Bill, Council on Foundations, Independent Sector, National Council of Nonprofits, and National Human Services Assembly, July 16, 2018.
• Nonprofit and Philanthropic Leaders Call on Congress to Leave the Johnson Amendment Alone, National Council of Nonprofits, February 8, 2018.
• Johnson Amendment Language Exclusion from Tax Bill a (Temporary) Victory for Nonprofits, Houses of Worship, and Foundations, National Council of Nonprofits, December 15, 2017.
• More

Additional Resources

• Gov. Cuomo signs new law restricting nonprofits from endorsing candidates, WIVB, Albany, NY, October 23, 2019.
• President Trump's shifting claim that 'we got rid' of the Johnson Amendment, Washington Post, Washington, DC, May 9, 2019. 
• Letter to Appropriations Financial Services and General Government Subcommittees, More than 100 National Nonprofits, April 25, 2019.
• Letter to Members of Congress Opposing Repeal of the Johnson Amendment, BoardSource, Council on Foundations, Independent Sector, National Council of Nonprofits, National Human Services Assembly, and United Philanthropy Forum, December 12, 2018.
• Fight to preserve Johnson Amendment continues amid new repeal efforts, Charles Stewart Mott Foundation, September 14, 2018.
• Podcast: A look at the Johnson Amendment with Amanda Tyler and Tim Delaney, Baptist Joint Committee, February 26, 2018.
• An Open Letter to the Hundreds of Millions of Americans Who Have Worked for, Volunteered for, Donated to, or Benefited from the Work of a Charitable Nonprofit: i.e., every living person in the USA, Nonprofit Quarterly, Boston, MA, November 29, 2017, Tim Delaney, President and CEO of the National Council of Nonprofits.
• Community Letter in Support of Nonpartisanship, Updated September 5, 2017.
• More

Webpages

• Protecting Nonprofit Nonpartisanship | Initial Commentary, February 5, 2017
• Protecting Nonprofit Nonpartisanship | Common Questions and Answers, March 2, 2017
• Protecting Nonprofit Nonpartisanship | Executive Order, May 18, 2017
• Protecting Nonprofit Nonpartisanship | Legislative Challenge, May 18, 2017
• Resources on How the New Federal Tax Law Impacts Charitable Nonprofits
• Political Campaign Activities - Risks to Tax-Exempt Status