National Council of Nonprofits’ Response to Ways and Means Committee

On August 14, 2023, the Ways and Means Committee (currently led by the GOP) published a request to nonprofits for information on potential violations of rules on political activities, inappropriate use of charitable funds, and the rise in foreign sources of funding. We have previously written on this request here and re-published a response from five esteemed academics here. There have certainly be other responses to the request, including one from the National Council of Nonprofits, available here, which represents the country’s largest network of nonprofits and serves as one of the sector’s most important advocates.

In a preface to its direct answers to the Ways and Means Committee’s questions, the National Council of Nonprofits highlighted four overarching principles:

Overarching Principle #1: Nonpartisan, Now and Forever.

  • “The overwhelming majority of 501(c)(3) organizations – frontline charities, churches, and foundations – are nonpartisan in law, fact, and culture, and are committed to remaining that way to ensure their integrity and impact.”
  • “The 501(c)(3) nonprofit community stands strongly united in support of the federal law
    requiring nonpartisanship and in opposition to those attempting to politicize the charitable sector in their quest for partisan, personal, and financial gains.”

As a law firm serving nonprofits, we strongly endorse this position and have weighed in on this issue before. See Take Action Today to Protect the Nonprofit, Religious, and Foundation Communities.

Overarching Principle #2: All honest efforts to protect the sector from encroaching partisanship are welcome.

  • “The gutting of the IRS budget over the past decade, plus the 2019 termination of required donor disclosures to the IRS for some non-charitable nonprofits, and a Supreme Court decision and recent state laws blocking reasonable access to evidence of fraud have significantly hindered the ability of federal and state law enforcement to detect and stop bad actors seeking to funnel hidden “dark money” to influence partisan elections.”
  • “It cannot be stated enough that charitable nonprofits rely on public trust. … And that’s why it is grievously offensive when partisans try to take and play off of, and risk destroying, charitable nonprofits’ well-earned public trust.”

These comments go beyond the first principle in emphasizing the danger of partisans creating policy primarily based on how their party is advantaged or disadvantaged by the policy. When Republicans recognized the party’s ability to raise monies from churches, they advocated getting rid of the prohibition against political campaign intervention and even made this part of their party’s platform. But when Democrats followed and surpassed the amounts of monies raised from 501(c)(4) nonprofit organizations, and liberal nonprofits heightened their priority on political matters, many Republicans, including leaders of the Ways and Means Committee, appeared to have retreated from this position, at least for now. The political winds should not determine whether we should keep the 501(c)(3) prohibition against political campaign intervention and whether we should try to create additional prohibitions against permitted political activities for 501(c)(3) organizations.

Overarching Principle #3: Conflation Breeds Confusion.

  • “In the field of nonprofit law, words matter. By that we mean that when vague, undefined terms are bandied about, like “political advocacy” and “political nonprofits,” the public is justifiably confused. It compounds the confusion when the news media, politicians, and activists mislabel organizations using terms that suggest violations of the law that, if labeled more correctly, would lead to accuracy and understanding. Some people may see issues like abortion, immigration, and climate change as “political,” but at their core these are public policy issues that may or may not happen to align with specific political parties at any given time.”
  • “Federal law has long recognized the fundamental distinction for charitable nonprofits between partisan political electioneering (which is expressly forbidden) and permissible nonprofit advocacy, which comes in many forms, including lobbying, engaging in ballot measures (such as initiatives, referenda, and public bonding issues, which the law technically treats as lobbying), and promoting public engagement through nonpartisan election-related activities.”

Words do matter, and we often use terms synonymously that have different legal meanings, which can cause confusion in understanding and advocating for laws. It’s especially abhorrent when partisans take advantage of such confusion to push their policy agendas of the moment and pursue their personal self-interests. There are different types of nonprofits that have different authority and restrictions relating to certain political activities. 501(c)(3) public charities represent one class of nonprofits that are prohibited from political campaign intervention, including endorsing, supporting, or opposing candidates for public office, but they may lawfully engage in many activities some will label “political,” as the National Council of Nonprofits notes above. Still, there is some confusion with some other types of nonprofits, including 501(c)(4) social welfare organizations, regarding how much political campaign intervention is permissible.

Overarching Principle #4: Charitable nonprofits and civic engagement are synonymous.

  • “We reject the premise that an organization must be biased and/or partisan for focusing on registering low-income people or other demographic groups. Quite the contrary, it should be a bedrock principle of civic engagement for all that every person eligible to vote in our democracy should be registered and encouraged to get to the polls.”
  • “While we recognize that the rough and tumble of partisan politics may cause some to discourage voting by perceived opponents, we in the charitable nonprofit world continue to hold true to the long-respected virtue of full voter participation.”