Citizens United Ruling

On January 21, 2010, the United States Supreme Court ruled in Citizens United v. Federal Election Commission that corporations (including nonprofit corporations and unions) may make direct expenditures on political advertising in support of or in opposition to a candidate for public office.  While nonprofit leaders and commentators are still analyzing what this means for the nonprofit sector, there is no doubt that this 5-4 split decision will have tremendous impact on future campaigns and heighten the importance of nonprofit advocacy.

According to The New York Times, President Obama called the decision "a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."  In an opinion piece for The Chronicle of Philanthropy, Leslie Lenkowsky adds that nonprofit leaders are worried that the decision "will make elected officials more sensitive to business interests than to the social causes they try to represent."

Organizations that are exempt under Section 501(c)(3) of the Internal Revenue Code are not directly affected by the ruling and remain subject to the prohibition against electioneering.  A 501(c)(3) organization is expressly described by the Code as one "which 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."

But, as the Michigan Nonprofit Association points out, 501(c)(3) organizations "are absolutely allowed to be actively involved in [certain] nonpartisan election activity such as voter registration, voter education, candidate education and get-out-the-vote efforts.  These activities will be more important than ever in ensuring an active and well informed citizenry within our state and communities, given the increased number of dollars that will become available to individual candidates as a result of this ruling."

The National Journal asks, "[W]hich groups will flourish most under the new regime, and which will face constraints?  What types of spending will be permitted, and how much must be disclosed?  These and other questions are already consuming election lawyers around town and putting pressure on the Federal Election Commission to clarify muddy areas of the law."

"The biggest unanswered question is what defines coordination between a corporation, union or other political player and a candidate.  In Citizens United v. FEC, the high court lifted only the restrictions on so-called independent expenditures – that is, the political money corporations may spend when they are not coordinating their activities with specific candidates."

Additional Resources:

Nonprofit Electoral Advocacy After Citizens United – Alliance for Justice

Citizens United Decided: An Upheaval of Campaign Finance Law – OMB Watch

US Supreme Court Lifts Restrictions on Corporate Campaign Spending – Independent Sector