As the 2008 election nears, one topic of warning is becoming all the rage, nonprofits that use the campaign season to bring attention to their issues, such as education or healthcare. As the Chronicle of Philanthropy notes, "Nonprofit organizations are stepping up their political activity and becoming more aggressive lobbyists as the presidential primaries draw near, though they must be careful to follow the complex laws governing their tax-exempt status."

A Time magazine article highlights many nonprofits that are doing great work to promote the needs of the nonprofit sector to candidates.

We have noted here before foundations that are becoming more involved with independent campaigns that seek candidates' stance on issues, and investing in new advocacy campaigns to accomplish its policy goals. The example of Ed in '08 and many others are mentioned in the Times article. The routine question arises, how involved should charities get in politics. However, "[Robert] Egger says bring it on. 'Nonprofits have for too long been complacent to let others tell us what we can and can't do."

Egger is not the only nonprofit leader using next year's early primaries to thrust his agenda into the national spotlight. Bill Gates, whose foundation is the world's largest philanthropy, last month called on presidential contenders to commit to expanding the President's Malaria Initiative, a $1.2 billion effort started by President Bush in 2005 to cut malaria deaths by 50% in 15 African nations.

One very impressive example of nonprofits using the election to raise political awareness of the sector is the Primary Project.

This time around, New Hampshire nonprofit leaders are learning the art of bird-dogging. One, Cynthia Mills, CEO of the Manchester-based Tree Care Industry Association, has met 11 candidates at house parties and town hall meetings, peppering them with questions on how they envision a future partnership with the nonprofit sector. The Nonprofit Primary Project hopes to meet with all the presidential hopefuls one-on-one before the January primary

A week has passed since the Federal Election Commission (FEC) approved a new electioneering communications rule to interpret the Supreme Court's June decision in the Wisconsin Right to Life case. With three drafts to consider, the FEC adopted a broad interpretation of evidence of "express advocacy" in ads. Under the rule change an organization may use corporate or union money to run independent ads as long as the overall message is a call to action on a public policy issue and does not mention an election, political party or an opposing candidate, or take a stand on a candidate's character, qualifications or fitness for office. The rule provides for a "safe harbor" and if a communication does not qualify for the safe harbor, the FEC will consider whether the communication includes any "indicia of express advocacy."

Commissioners voted 4-1 to require that financing for any exempt ads paid for by unions or corporations be publicly disclosed. As he has in the past, Commissioner Hans von Spakovsky supported the idea of removing the disclosure requirement, but that motion failed. The FEC disclosure requirement would affect grassroots lobbying, even though in January of this year, Congress unsuccessfully tried to require more disclosure of organizations that engage in grassroots lobbying.

After much contemplation and commentary, most are quick to assume that now corporate and union funding for ads up until elections will just be abundantly out of control. Critics say groups will now be able to run campaign ads disguised as issue ads. The only way to test out this theory is to wait; however, the vagueness of the rule leaves open that possibility. The FEC will likely have to deal with the ramifications and decide whether ads crossed the line. Unfortunately many groups who want to engage in advocacy all year round, even prior to an election, are still left confused.

After the Federal Election Commission (FEC) published a General Counsel's draft final rule last week rule that was significantly different than the rule proposed for public comment, the commissioners this afternoon approved an alternative proposal submitted late today. The rule adopted this afternoon is an amended version of Chairman Lenhard's proposal including an amendment offered by Commissioner Weintraub, making clear that the Commission will take into consideration the ad's content along with whether the ad contains "indicia of express advocacy." The rule also kept the existing disclosure requirements. The text of the rule as adopted has not yet been released, but check back for further analysis. Reactions will continue to pile up, but for starters, check out this blog from Bob Bauer.

The Washington Post highlights the new publication Seen But Not Heard: Strengthening Nonprofit Advocacy and the executive director of OMB Watch. In light of a certain disdain for lobbyists, we all must be reminded that charities need to lobby more. "Bass's biggest problem is convincing charities that they not only can make their case to government, but that they really ought to do so. In effect, he needs to convince his fellow do-gooders that lobbying is not so bad." Disturbingly, "a third of nonprofits polled recently owned up to 'lobbying' two or more times a month. But when asked if they 'advocate,' closer to half admitted to that. Many nonprofits also are unsure how much lobbying the law permits them to do."

The Federal Election Commission (FEC) has fined the group the Media Fund $580,000 after concluding that the group illegally ran advertising against President Bush and in favor of Senator John Kerry. The FEC said that during the 2004 election, the now inactive group violated the law because it accepted unlimited donations from unions and expressly advocated the defeat or victory of a political candidate. The group was registered as a 527, but should have registered as a political committee. The Media Fund was the first to have a "probable cause hearing" under the pilot program.

According to the Internal Revenue Service (IRS) newswire, 501(c)(3) organizations have been reminded that federal law prohibits them from becoming directly or indirectly involved in campaigns of political candidates. Steven Miller, Commissioner of the Tax Exempt and Government Entities Division stated; "The political contests, especially for president, are starting earlier than usual. The IRS, as it has in the past, wants to remind charities and churches of the ban on political campaign activity. We also want to urge nonprofit and religious organizations to review the guidance we have issued to help them avoid any problems."

Related: Read this new report from OMB Watch, "Overcaution and Confusion: The Impact of Ambiguous IRS Regulation of Political Activities by Charities and the Potential for Change."

The Federal Election Commission (FEC) has scheduled a special meeting Nov. 20 to approve a new rule on electioneering communications in accordance with the Supreme Court's decision in FEC v. Wisconsin Right to Life Inc. (WRTL). BNA Money and Politics ($$) reports that the rule "is expected to set critical ground rules for political ads in the 2008 campaign season and beyond. The issues to be addressed include whether the sponsors of ads will have to be disclosed and whether certain types of ads, such as attacks on personal character, still will be out-of-bounds for corporate and union funding." At least four commissioners must vote in favor of the rule in order to approve it. The draft of the rule has not been released.

Update:The draft rule can be read here.

The LA Times reports on an option for political campaign donors that is expected to become more popular as time closes in on the presidential election, donating to a nonprofit. "It is the 501(c)(4), named for the tax code that defines it, that seems to have struck a chord with people looking for new ways to organize their independent fundraising."

And the New York Times mistakenly cautions that the Supreme Court's decision in the Wisconsin Right to Life (WRTL) case can partly be to blame for the influx in "soft money" donations to nonprofits prior to an election season. The article considers some efforts to fund ads as attempts "to plot ways of channeling money into advertisements and get-out-the-vote activities."

"Last week, as the first step in that effort, a group including John Podesta, the chief executive of the Center for American Progress, a liberal research center, and a former chief of staff for President Bill Clinton, and Anna Burger, a senior official of the Service Employees International Union, filed papers to form a nonprofit group." Actually the group formed a 527, The Fund for America, the topic in a recent Roll Call ($$) article. The Fund for America was formed to raise money and fund existing organizations. "The strategists said it's too early to know which specific campaigns the new group will underwrite but that it is expected to focus exclusively on issue-based television and radio campaigns, door-to-door canvassing and direct mail." Unlike 501(c)(3)s or 501(c)(4)s, the purpose of 527s is to get involved in elections, but they are not supposed to expressly advocate for or against a federal candidate, unless they comply with FEC rules.

Yet we must remember, that even though some nonprofits are set up immediately prior to an election, they still may establish a genuine issue campaign. Foundations are now becoming more involved with independent campaigns that seek candiates' stance on issues, as the Chronicle of Philanthropy ($$) reports. The article highlights foundations that are investing in new advocacy campaigns to accomplish its policy goals and to get candidates to talk about their issues. An example of organizing the public and presidential candidates to promote an issue is the Ed in '08 campaign.

Douglas W. Nelson, the Casey foundation's president, says the grant maker took great care to ensure the antipoverty campaign did not unintentionally promote any particular candidates. "It's not necessarily a legal concern, as much as it is, Does this have enough integrity so we would not be accused of being a stalking horse for anybody or anything?" he says.

Attorney Ezra Reese of Perkins Coie has done us all a favor by calling attention to little-known enforcement actions at the Federal Election Commission (FEC) over the past year that expand its authority beyond federal campaigns and election activity.

Reese's article, The Other Agency: The Impact of Recent Fedral Law Enforcement on Nonprofit Political Activity appears in the November 2007 issue of Tax Analysts. It has a good summary of both Internal Revenue Service (IRS) and FEC rules and enforcement trends over the past few years.

The conclusions are ominous. Reese says,

The FEC now claims authority to regulte activity that previously was left only to the IRS. An organization may engage only in activity that is conservatively considered to be non-political under IRS guidance and still cross the FEC line separating issue advocacy from illegal corporate political expenditures.....It is far past time nonprofits view the FEC and its growing body of enforcement precedent as an equally important threat when engaging in grassroots issue advocacy.

This article underscores concerns raised by the FEC's proposal to require disclosure of individual donors by groups that air grassroots lobbying broadcasts that by definition are not electioneering. The FEC's expansive view of what constitutes advocacy for or against a candidate brings to mind Thorstein Veblen's theory of "trained incapacity"- when overspecialization creates an inability to understand the true nature of things. The FEC so far has failed to understand that public life and public policy debates are not just about elections. Sometimes issue advocacy is about issues.

Posted by Kay Guinane, 05:12:50 PM