WNY Executive Director’s Network: government

Keeping Politics at Bay for

Charitable Nonprofits and Foundations

Oppose Efforts to Repeal or Weaken
the “Johnson Amendment”

Is it too much to ask that the charitable nonprofit and foundation community be respected and protected as the safe space from the damaging effects of partisan politics? The immediate answer from scores of 501(c)(3) leaders so far – and potentially tens of thousands of organizations – is – No, it is not too much to ask that nonpartisanship remains a cornerstone principle of what it means to be a charity or a

foundation. By signing onto the Community Letter in Support of Nonpartisanship, charitable nonprofits, private foundations, religious groups, and their vast numbers of supporters can send a clear signal to Congress and the Administration that partisan politics has no place in the 501(c)(3) community. Join others from across the country to show that we intend to resist any and all efforts to weaken or repeal this longstanding protection in federal tax law that keeps 501(c)(3) organizations away from endorsing, opposing, or contributing to political candidates.

Why Nonpartisanship Matters

Nonpartisanship is a cornerstone principle that has strengthened the public’s trust of the charitable community. In exchange for enjoying tax-exempt status and the ability to receive tax-deductible contributions, 501(c)(3) organizations – charitable nonprofits, including religious congregations, and foundations – agree to not engage in “any political campaign on behalf of (or in opposition to) any candidate for public office.” The quoted and highlighted text is often referred to as the “Johnson Amendment” because it was proposed by then-Senate Minority Leader Johnson to legislation signed by President Eisenhower in 1954.

That provision of law protects the integrity and independence of charitable nonprofits and foundations. It shields the entire 501(c)(3) community against the rancor of partisan politics so the charitable community can be a safe haven where individuals of all beliefs come together to solve community problems free from partisan divisions. It screens out doubts and suspicions regarding ulterior partisan motives of charitable organizations, as undoubtedly would occur if even just a few charitable organizations engaged in partisan politics. Nonpartisan credibility is critical to the ability of 501(c)(3) organizations to work with elected officials of all parties at the local, state, and federal levels to address community needs.

Weakening the law by allowing leaders of individual 501(c)(3) entities to endorse candidates for public office and engage in limited partisan electioneering activities would damage the integrity and effectiveness of all charitable organizations and spawn litigation as innovative partisans seek to expand gray areas in the proposed legislation. Repealing the Johnson Amendment would damage the federal Treasury as people take tax deductions for political contributions they could then funnel through charitable nonprofits, undercut fair elections by providing a loophole to avoid campaign contribution disclosure laws, and empower politicians to exert pressure for access to foundation assets and charitable funds for their own partisan campaigns rather than for the public good.

The Issue: Whether the Johnson Amendment Needs Fixing

In recent weeks, the President vowed to “get rid of and totally destroy the Johnson Amendment,” the Chairman of the House Ways & Means Committee said he intends to repeal the law as part of comprehensive tax reform, and the House Majority Whip became a lead sponsor of one of the bills to weaken the protection. That legislation (H.R.781; S.264) would blur the current clear language (quoted above) that conditions tax-exempt status and the ability to receive tax-deductible contributions in part on not engaging in partisan, election-related activities for or against candidates for public office.

Proponents of the legislation, primarily a subsection of the broad religious community, generally focus on perceived restrictions on preachers who say they want to speak out about issues of the day, plus endorse candidates from the pulpit. Most commentators, however, emphasize the legal reality that charitable nonprofits, including religious congregations, already are free to speak on important matters of the day and advocate on public policy issues and legislation. Private foundations, while barred from most lobbying activities, are free to engage in public debates, promote public education efforts, and fund a wide range of issue-focused activities. Section 501(c)(3) of the federal tax code merely prohibits campaign intervention, defined to include endorsing or opposing candidates for public office, publishing or distributing statements for or against candidates, or using tax-deductible and other resources to support partisan campaign activities. See the recent Chronicle of Philanthropyarticle for a more detailed description of the arguments.

Who’s on the Side of Nonpartisanship?

(and opposes changes to the Johnson Amendment)

Charitable nonprofits and foundations from across the country are beginning to express strong opposition to any efforts to politicize our community by altering the tax-law ban on partisan, election-related activities. The National Council of Nonprofits has taken a strong stance in support of nonprofit nonpartisanship as have several other mainstream nonprofits and associations, including Association of Fundraising Professionals, BoardSource, Independent Sector, and (so far) 23 state associations of nonprofits. Although the issue is frequently couched as a concern to some preachers, numerous faith-based organizations, such as the Baptist Joint Committee for Religious Liberty, Faith Voices Arkansas,Interfaith Alliance, and North Carolina Council of Churches, have expressed strong opposition to changes in the law. Likewise, the Council on Foundations issued a strong statement in support of maintaining nonpartisanship as the hallmark of philanthropy.

Is it Legal for My Organization to Sign Onto the Community Letter in Support of Nonpartisanship?

As noted above, charitable nonprofits have the right to lobby on many legislative issues. Signing the Community Letter in Support of Nonpartisanship is consistent with that legal right. The lobbying rules for private foundations are more restrictive, but in this case organizations, such as the Council on Foundations, have determined that signing onto the letter is legal. The Council on Foundations published a statement clarifying that foundation lobbying on this issue is legal under the “self-defense” exception.

What Good Will It Do to Sign the Community Letter in Support of Nonpartisanship?

Nonprofit and foundation voices matter. A small minority of individuals in the religious community have made the case to some political leaders that allowing churches and charities to endorse political candidates would be good for those preachers and politicians. The truth is that the vast majority of nonprofit and foundation leaders not only oppose changing the law, but see repeal or revision of the Johnson Amendment as being very harmful to the identity, independence, and integrity of our community. As with many issues, numbers matter. The more charitable nonprofits, foundations, religious congregations, and their many supporters – accounting firms, law firms, corporations that care – that stand up for the community and their missions by supporting nonpartisanship, the stronger is the message that changing the Johnson Amendment is unpopular and viewed as destructive by real people back home. Your voice matters!

This newsletter on public policy issues affecting nonprofits is provided as a benefit of membership in the New York Council of Nonprofits, part of the state association network of theNational Council of Nonprofits.

Protecting Nonprofit Nonpartisanship, National Council of Nonprofits web resources

Infographic, “Protecting Nonprofit Nonpartisanship,” National Council of Nonprofits

Worth Quoting“

“With this editorial, NPQ now adds its voice to those who resist any repeal of the Johnson Amendment, and we urge others to do the same. The nonprofit sector should assertively protect itself and the public from this baldly partisan effort.”

-- “Losing the Johnson Amendment Would Destroy the Unique Political Role of Nonprofits,” editorial, Nonprofit Quarterly, February 6, 2017, and quoting, among others, Robert P. Jones, CEO of the Public Religion Research Institute: “Church members could give tax-deductible donations to a church, which would then be used by the church to campaign for a specific candidate. It could effectively turn churches into campaign offices and pastors into party operatives.”

"Politicizing churches is not a solution to a problem – it is a problem in search of a problem.” - “Politicize our charities and churches? No, thanks,” Amanda Tyler, Executive Director of the Baptist Joint Committee for Religious Liberty, Religion News Service, February 9, 2017.

“[W]ith the Johnson Amendment, preachers are totally free to attack greed, support health care, wrestle with war, decry injustice and anything else at the intersection of biblical faith and public policy. We are free to preach on these critical matters which are, first of all, issues of faith planted firmly in the Bible. Preachers can go at the issues full-on – and then let the people decide who gets their vote.”

- “On religious liberty and the Johnson Amendment,” Rev. Jean Larson, ret., Missoulian (MT), February 18, 2017. The Johnson Amendment, she continues, “supports the integrity of churches. It keeps churches from being pawns of big money and restrains the partisan hijacking of our pulpits.”

“The Johnson Amendment has been the target of politicians and preachers who want to politicize pulpits. They may not own up to that fact, but the truth is they want to leverage the voting mass of congregations to turn elections in their favor. They lust for … the ability of the clergy to direct the political clout of the faithful by telling them how to vote.” “Johnson Amendment repeal would ‘destroy’ church unity,” Marv Knox, editor, The Baptist Standard (Feb. 8, 2017).

“The Johnson Amendment, thankfully … keeps the political parties out of our churches. Can you imagine if churches could become a political organ of the Republican or Democratic Parties? Can you anticipate the money and muscle that would be spent to convince church leaders to advocate for one side or the other?”

- “Why we need the Johnson Amendment,” Mathew Whoolery, instructor at Brigham Young University–Idaho, Idaho Standard Journal, February 13, 2017. Whoolery added, “I realized that my time in church, worshipping, is one of the only safe places left in my life where politics doesn’t intrude.”

Worth Reading

Association of Fundraising Professionals Position on Repeal of the Johnson Amendment, February 22, 2017

Baptist Joint Committee for Religious Liberty News Release, February 2, 2017

Council on Foundations Letter to Congress, February 9, 2017

Independent Sector Statement on the Johnson Amendment, February 2, 2017

Interfaith Alliance News Release, February 2, 2017

National Council of Nonprofits Opposes Latest Efforts to Politicize Charitable Nonprofits and Foundations, February 2, 2017

Government Resources

IRS Publication 1828: 501(c)(3) Tax Guide for Churches & Religious Organizations (Rev. 8-2015)

IRS website: “Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations”

1001 G Street NW, Suite 700 East
Washington, DC 20001

www.councilofnonprofits.org

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Wanted: Courageous Board Members

For too long, a myth has hung over the nonprofit community like a scary fog: that nonprofit advocacy is somehow spooky. Nothing could be further from the truth, because advocating for missions is a core part of our sector’s proud legacy. If you eat in smoke-free restaurants, drive safely on divided highways, have a Social Security card, use your civil rights, or are a voting female, then you are benefiting from the past advocacy work of nonprofits – and board members. That’s why we are excited to let you know about a new campaign,Stand For Your Mission, launched to raise awareness - specifically among nonprofit board members - that being an advocate for the nonprofit’s mission is an important role for every board member to play.

Don’t just sit on a board: Stand for your nonprofit’s mission.

The Stand for Your Mission campaign calls on all nonprofit board members to stand up as powerful champions for the missions they serve. The campaign is designed to unleash the full potential of nonprofit organizations to advance their missions in their local communities by engaging board members more directly as advocates on behalf of their organizations.

The goals of the Stand for Your Mission campaign are to:

Bring about a sustainable shift in the understanding and expectations around board engagement in advocacy;
Move advocacy from an ancillary to a key board leadership role; and
Strengthen the nonprofit sector’s ability to advance the public good.

Importantly, this new campaign is not being advanced by ghosts, ghouls, or goblins, but by trusted, mainstream organizations in the nonprofit and grantmaking communities that recognize the need to change the culture around nonprofit advocacy so it is embraced as an effective, everyday tool for advancing nonprofit missions. The National Council of Nonprofits collaborated withBoardSource, the Alliance for Justice (with its Bolder Advocacyinitiative), the Forum of Regional Associations of Grantmakers, the Campion Foundation and John S. and James L. Knight Foundation, to curate a set of core resources for board members, CEOs, and grantmakers. Please share the Stand for Your Mission discussion guide as a useful resource with your board.

Read on for more resources for courageous boards

Talking about That Which Shall Not Be Named [what it really costs to be a charitable nonprofit]

While we wish we could just wave a wand, magical thinking won’t stop those who rate and rank nonprofits by focusing on the cost of a nonprofit’s operations, rather than its impact in solving community challenges. So what can nonprofits do to shake off this aversion to costs? Remember Harry’s invisibility cloak? Throw it off! Be bold and brave enough to have candid conversations with donors about what it really costs to deliver programs and services.

Bring financial sustainability closer in 3 easy steps

First, let’s toss out the shape-shifting term “overhead” that means something different to everybody and instead just call all these costs what they are, whether “fundraising,” or rent, or “general administrative.” Second, let’s ignore any apparent incentives to be fuzzy about the full expenses needed to deliver a nonprofit’s services or programs. Instead, by fully embracing our own costs, nonprofits will help manage expectations about what is really needed to solve problems in communities. Third, let’s find the courage to talk about the costs, especially with donors and grantmakers – and document them, demonstrating accountability and candor consistent with a culture of transparency. We think this is the right approach – and we’re inviting you to join us by:“owning your own costs.”

Read on for more on owning your own costs.

Join us for a Special Webinar to Raise Awareness
About Costs

At the National Council of Nonprofits, we and our State Association network are tackling misconceptions about costs one step at a time. Transparency about costs first requires knowing how much it actually costs to provide services and deliver programs. This means that someone at every nonprofit should be able to properly account for program related costs as well as those costs that cut across all the activities of the nonprofit. We know this can a challenge, so our network is hosting a special program designed to help your nonprofit #OwnYourOwnCosts.

Please join the National Council of Nonprofits and our State Association network for a free webinar about proper cost allocation, so we can all own our own costs and spread the message that all costs, whether for fundraising or administration, or anything else related to advancing our nonprofit’s mission are essential.

Guest speaker: Jeff Russell, founder and CEO of Jitasa

October 23 | 3:30 - 4:30 pm Eastern