In the midst of the IRS’s proposed regulations to impose new restrictions on Section 501(c)(4) social welfare organizations (and the duly deserved emerging backlash against them), it is critically important to remember that both Section 501(c)(3) public charities and Section 501(c)(4) organizations enjoy a First Amendment constitutional right to engage in “issue advocacy,” so long as such communications are not “too” political or otherwise improper. In a nutshell, that means these organizations – and their leaders – should be able to educate people about a wide variety of public policy issues in order to promote their tax-exempt purposes, without losing their tax-exempt status or otherwise being subject to government interference.
A key question exists within this legal paradigm for any nonprofit’s issue advocacy. Namely, if its educational communications address issues that are also covered through politics, then may the IRS therefore question – or even prohibit - such speech? An organization’s involvement in politically tinged issues should not necessarily trigger such government scrutiny. In other words, just because a political party or candidate latches on to public policy issues does not render them “political” per se.
Consider “Free Market America,” a public charity dedicated to promoting free markets, capitalism and related economic principles, and educating people about them. Such principles are not inherently political. Indeed the organization’s activities include purely apolitical expressions of the principles involving moral, spiritual, philosophical, and practical applications. These include human creativity, healthy community development, and personal fiscal responsibility. The organization also promotes debate and advocacy on areas touching the political, such as government debt, legislative approaches to health care reform, and labor-related laws. Notwithstanding these political overlays, Free Market America should still qualify as a Section 501(c)(3) public charity and be able to speak out on issue advocacy. It should not be limited to the less favorable Section 501(c)(4) status or, worse, loss of tax-exempt status altogether.
Or consider environmental, pro-life, and religious liberty organizations, all of which likewise engage in substantial educationally oriented communications on politically sensitive issues. For example, environmental groups may emphasize protecting precious natural resources and promoting energy alternatives. (E.g., “Drive electric” and “Fracking is Bad [or Good].”) Faith-based groups may focus on helping people understand and live out moral and spiritual values. (E.g., Abortion kills a human life and is therefore wrong, regardless of what the law may say.) In the face of legislative and other political involvement in these potentially divisive issues, all of these organizations’ informational efforts could potentially be interpreted as highly politicized. Nevertheless, such political attention should not mandate a communications muzzle on these organizations, as a condition of protecting their tax-exempt status.
Nonprofits that address politically sensitive issues thus need not be inexorably drawn into political dimensions. Rather, they can focus instead on the moral, spiritual, and intellectual aspects of such issues. In other words, they can focus on changing hearts and minds of the people they reach (and perhaps indirectly, the law too). Such aspects transcend both politics and the increasingly partisan stances, as may be played out through the media. But regaining such non-political perspective in issue advocacy, and making it clear to the IRS and others, may be challenging in light of the intensifying politicization of so many issues.
