The John Hopkins Listening Post Project released a report describing their findings from a 2007 survey of 872 nonprofit organizations nationwide in four fields (children and family services, elderly housing and services, community and economic development, and the arts). The survey meant to find out "how recent challenges are affecting nonprofit engagement in policy advocacy, and how this varies by field, size of agency, or other factors. Moreover, we know very little about what factors affect the willingness of nonprofit organizations to engage in lobbying and advocacy, or what forms their involvement takes."

They found that the majority of nonprofits do engage in such activity, but only devote very little resources to it, either because of funding or staffing issues. The report reiterates the importance of nonprofits' role in policy and advocacy work.

Read the report "Nonprofit America: A Force for Democracy".

Check out the book Seen but not Heard: Strengthening Nonprofit Advocacy, OMB Watch's comprehensive analysis released last year.

A new 527 group called The Real Truth About Obama, Inc. ("RTAO"), has filed a lawsuit in federal court against the Federal Election Commission (FEC) and the Department of Justice to prevent them from enforcing FEC reporting rules for political committees. RTAO plans to run issue ads examining the Democratic presidential candidate's position on abortion and other policy positions issues.

The group's lead attorney, Jim Bopp Jr., won the Wisconsin Right to Life (WRTL) case last year against the FEC. Bopp argues that this 527 should not have to disclose their activities with the FEC, including independent expenditures and electioneering communications. The group registered with the FEC on July 29.

According to a press release from the James Madison Center for Free Speech; "Its first project is about Obama's radical pro-abortion views and voting record. However, RTAO fears that it will be deemed a federal PAC, if it does the project, because of the FEC's enforcement actions arising out of the 2004 election where various issue-advocacy 527s, such as the Swift Boat Veterans for Truth, were fined for failure to register as a federal PAC, even though they only engaged in issue advocacy."

RTAO's abortion information project includes a website, www.TheRealTruthAboutObama.com, and a radio ad called Change. The website is not operational due to the FEC's enforcement policies that prevent RTAO from raising money for the project. The lawsuit challenges this rule. The Change ad does not have any express words of advocacy of his election or defeat, such as "vote for" or "defeat."

It seems a bit peculiar that the group is arguing that it will only engage in legitimate issue advocacy, yet plans to focus on the public policy positions of one candidate, Barack Obama. That in itself suggests that the content could possibly be interpreted as an appeal to vote for or against a candidate. Even though in RTAO's lawsuit, they extensively cite WRTL, it was in that case that the Court decided that an ad can be regulated "only if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate."

RTAO challenges the FEC's "express advocacy" definition. "[T]he FEC continues to enforce its vague and overbroad rule defining 'express advocacy,' even where the communication does not contain such explicit words. If an ad is deemed to contain express advocacy, it becomes an 'independent expenditure,' which is forbidden to corporations, such as RTAO, must be reported to the FEC, must contain a disclaimer, and can trigger PAC status."

In Monday's National Journal, ($$) the "Rules of the Game" column examines how the Supreme Court, as some perceive, is attacking campaign financing reform initiatives. As election law scholar Rick Hasen says, "We could well be looking at a situation where the only campaign finance laws that are constitutional are disclosure laws and voluntary public financing systems."

It's only a matter of time, say some observers, before other core provisions of the election laws come before the high court. Indeed, Indiana election lawyer James Bopp Jr., who's led the recent string of legal challenges, argues that the time is ripe. "I think the soft money ban is readily susceptible to a First Amendment challenge," he said. That may seem far-fetched to those who brush off recent developments on the high court. But when it comes to campaign finance restrictions, this court is proving more than eager to embrace deregulation.

According to BNA Money and Politics ($$),"it would be practically impossible" for the Federal Election Commission (FEC) to complete a new rule on the disclosure of bundled campaign contributions from lobbyists in time to affect the 2008 election.

Chairman Donald McGahn said, "simple math dictated that there are not enough days left in the 2008 campaign season for the so-called bundling rule to be completed in time. Even if the FEC promptly finished the rulemaking process, the law that calls for bundling disclosure requires a three-month period before a new rule could actually go into effect." Under the Honest Leadership and Open Government Act, the FEC is required to write a new rule on bundling, the disclosure of campaign money that is collected by a lobbyist from other contributors and passed along to a candidate.

On Monday the FEC approved two advisory opinions (AO), including one ruling that the Club for Growth Political Action Committee (CFG PAC) must include "stand by your ad" disclaimer, including 10- to 15-second television commercials. The Campaign Legal Center has publicly voiced their approval with the FEC's unanimous decision.

The FEC press release states; "The Commission determined that CFG PAC's ads were public communications subject to the Act's [Bipartisan Campaign Reform Act] disclaimer requirements, and spoken disclaimers could not be omitted. In discussion, Chairman McGahn noted that this AO only concerns non-candidate ads."

Meanwhile, the Center for Competitive Politics criticized the decision. "The redundant 'stand by your ad' requirements needlessly reduce the amount of time that citizen groups can spend communicating with their fellow citizens. [. . .] Instead of substantive political messages like 'no taxation without representation' citizens are left to hear that the organization paying for the ad, in fact, approves of it."

The commissioners also approved a new expedited meeting schedule that includes at least three meetings in September, as opposed to the normal once a month meeting.

The Internal Revenue Service (IRS) released a memorandum for exempt organization (EO) revenue agents detailing how they should examine cases involving allegations of political activity on the Internet as part of the Political Activity Compliance Initiative (PACI). For example, in figuring out whether an exempt group is engaging in prohibited political activity, the IRS agents are to consider the "number of 'clicks' or electronic proximity between an exempt organization and the site of a political message," and "the context of the link is another significant consideration."

As the MSNBC article referenced earlier, the IRS is also concerned with what the Internet means for how easily 501(c)(3) groups can become involved in political activity. The IRS memo states; "Experience indicates that there are numerous cases involving potential political campaign intervention in the form of communications posted on Web sites operated by section 501(c)(3) organizations. Many of these communications include links to Web sites of other organizations."

In February the IRS warned 501(c)(3) organization about linking to other websites that may be considered partisan if the links indicate support or opposition for candidates. The memo discusses cases of linking to unrelated organizations and linking to related organizations, such as a related 501(c)(4). The IRS will continue to rely on the "facts and circumstances" test.

"EO will pursue the case if the facts and circumstances indicate that the section 501(c)(3) organization is promoting, encouraging, recommending or otherwise urging viewers to use the link to get information about specific candidates and their positions on specific issues. Again, analysis of the context around the link is a key factor."

[T]here are situations where a section 501(c)(3) organization itself (1) takes a position on an issue, and (2) provides information about candidate positions on the same issue, placing the organization at risk of having intervened in a political campaign. The risk arises, and the case should be pursued, even if the two elements are in separate parts of the organization's Web site, or if one element is on the Web site and the other is not.

An article from MSNBC's online magazine, Contribute, discusses the ways that 501(c)(3) organizations, according to the report, actually engage in illicit campaign intervention.

The report argues that partly because of the Internet, the line between issue advocacy and illegal partisan electioneering becomes crossed more often and easily. "[I]t's OK to put on such events as a voter registration drive or voter forums - or a get-out-the-vote push, as long as all are nonpartisan. Clearly, some issues and causes are aligned more with one party than another - Al Gore and global warming, or George Bush and troop support in Iraq, for starters."

As they should, "501(c)(3)s are considering their potential for political advocacy. [. . .] To help Minnesota nonprofits walk the line — and skirt the ban on political activity — this group created the Minnesota Participation Project, a Web site to help the state's nonprofits define and conduct permissible, nonpartisan voter recruitment efforts." Such voter registration activities are a vital characteristic to 501(c)(3) groups.

"But woe to those nonprofits that go too far. Indeed, the difference between issue advocacy and political intervention can get pretty murky sometimes — and there's a need for clarity that has become especially urgent in this era of instant communication."

Referencing the NAACP and the All Saints Episcopal Church cases; "the IRS actions sent a stringent — albeit mixed - message to the nonprofit community."

The Federal Election Commission (FEC) with its new panel of commissioners is expected to vote Monday July 28 on the first FEC advisory opinions. Club for Growth PAC has requested that they can exclude the spoken "stand-by-your-ad" disclaimers from short television advertisements. The draft advisory opinion to be voted on rejects their request. The group argued that the ten to fifteen second spots it plans to run for candidates are too short to include the standard four second spoken disclaimers, such as "Paid for by Club for Growth PAC and not authorized by any candidate or candidate's committee." Instead, they want to identify itself as the ad's backer in four second visual disclaimers.

The draft advisory opinion states, "All public communications made by a political committee must include certain disclaimers. In addition, all public communications made by any person, including a political committee, that expressly advocate the election or defeat of a clearly identified Federal candidate must include disclaimers."

The US District Court for the District of Columbia denied a challenge to donor disclosure requirements of those paying for broadcast messages in the weeks before an election under Federal Election Commission (FEC) rules. Citizens United, a 501(c)(4) organization filed a lawsuit against the FEC claiming that television ads for its film, Hillary: The Movie, should not be subject to donor disclosure requirements under FEC rules. In January a three-judge panel ruled against the group.

The case involves FEC rules for electioneering communications, television and radio commercials mentioning the name of a federal candidate aired 60 days before the general election or 30 days before a primary. Any electioneering communication that is allowed is subject to disclosure and disclaimer requirements.

According to the July 18 opinion, all three judges agreed there were "no genuine issues of material fact presented," and therefore not enough evidence to go forward and their summary judgment request was denied.

According to BNA Money and Politics ($$), Citizens United will file an appeal with the Supreme Court, but since the Court is now in recess there will not be any action on the case until late September.

Citizens United has now announced plans to release in September a new movie focused on Senator Barack Obama (D-IL). And at least for now, donor disclosure rules remain in place.

The Hill reports that the Democratic Senatorial Campaign Committee (DSCC) is "trying their luck with a series of candidate ads that inhabit a gray area of the law, and observers say the approach could be a game-changer in the continuing battle over campaign finance reform." Campaign finance rules restrict the amount of money the DSCC can spend on coordinated efforts with a campaign, but the DSCC argues that since the ads do not ask the viewers to vote for the candidates, the law does not apply. Republicans however, argue that the ads are illegal and have filed Federal Election Commission (FEC) complaints. The DSCC's new Mississippi ad features Senate candidate and former Governor Ronnie Musgrove. The DSCC has also funded part of the Oregon Democratic Party's series of issue ads featuring Senator Gordon Smith's opponent, state Representative Jeff Merkley.

The Hill notes; "Jennifer Duffy, a Senate race analyst at The Cook Political Report, and others say the legal question is an open one, election law expert Jan Baran said Democrats appear to have an airtight case, because candidates are allowed to participate in 'non-express advocacy' communications outside of 90 days before the general election."

Others might say it is irrelevant if FEC complaints are made say, since the FEC is actually the "Failure-to-Enforce Commission." Because of the FEC's enforcement failures, some are advocating for the replacement of the FEC with a new body, the Federal Election Administration (FEA). Senators John McCain (R-AZ) and Russ Feingold (D-WI) have introduced the Federal Election Administration Act (S.478) and a companion measure in the House (HR 421) introduced by Representative Chris Shays (R-CT). For more information about this three member agency, click here.

More Senators have signed on as a co-sponsor to the Senate Campaign Disclosure Parity Act (S.223). The bill would require Senate candidates to file their campaign finance reports electronically. Senator Tom Harkin (D-IA) and Senator Jon Tester (D-MT) make the co-sponsor list total 44, yet a measure with almost half the Senate listed as a cosponsor remains stalled.

Voters should be able to know the identities of those who are providing significant financial support in Senate races. Currently, the Senate's paper campaign finance reports have to be entered into a computer before the information goes online. This time-consuming process means the public will likely not have access to the information until after the election. This commonsense bill will hopefully only continue to gain more support.

The campaign of Senator Gordon Smith (R-OR) filed a complaint with the Federal Election Commission (FEC) claiming his Democratic opponent, Jeff Merkley, and the Democratic Party are attempting to circumvent campaign finance law. Two television commercials have Merkely discussing his work on veterans' issues paid for by the Oregon Democratic Party with help from the Democratic Senatorial Campaign Committee. The state Democrats argue that they do not have to count the money spent on the ads as a contribution to the campaign because they are not meant to advocate for Merkley's election, instead, are issue ads meant to advocate for veterans. The ad never mentions Merkely is a candidate for the Senate, and does not mention Smith. Smith's campaign argues that the Democratic Party is using the strategy of releasing issue ads to try to give more money to Merkley for advertising.

The Oregonian reports, "The details of federal election law - and of just how the ad was put together - are complex. But the two ads featuring Merkley test the limits of the laws governing campaign finance. [. . . Paul Ryan, from the Campaign Legal Center] said the legality of the Merkley ads could hinge in part on whether they republished material from the Merkley campaign. The Smith complaint alleges that the veterans ad takes material from the Merkley Web site. Reiff, [a Democratic Party of Oregon laywer] however, said the ad merely 'echoed themes' used by the Merkley campaign."

Decide for yourself, watch one of the ads here.

Meanwhile, this complaint is one more item the new FEC commissioners are waiting to tackle. The FEC convened yesterday (July 10) for the first time in more than six months, and during the first open meeting Republican election lawyer Donald McGahn was named chairman. The FEC faces a lot of work. The Campaign Legal Center wrote a letter to the FEC urging that they quickly produce rulemakings related to the Honest Leadership and Open Government Act, including rules for the disclosure of bundled lobbyist contributions.

The Baltimore Sun has highlighted the National Association for the Advancement of Colored People (NAACP) and the fact that it is not allowed to engage in partisan politics, not surprising, as all 501(c)(3) organizations are prohibited from doing so. "Individually, many NAACP members have lauded Obama's nomination as a victory for racial progress. But they also say the organization continues to tread a delicate path, careful not to give the appearance of partisanship, especially since it has been accused of being too political in the past." A month before Election Day 2004, the Internal Revenue Service (IRS) initiated an audit of the NAACP's tax-exempt status because of a speech Julian Bond made criticizing the Bush administration. After two years, the investigation was dropped.

"In an election year, criticism of nonprofits typically increases, as does IRS scrutiny," said Gary Bass, executive director of OMB Watch, a nonprofit watchdog organization in Washington. [. . .] "I would say that the IRS has increased scrutiny the last election cycles, in part because of the gamesmanship that goes on - one side constantly filing petitions against the other side," Bass said. He thinks IRS rules are ambiguous. Any objection or complaint triggers an inquiry, which may or may not lead to a full-scale audit. "For groups who talk about critical policy issues, it then means that they are left with uncertainty as to what they can and cannot do," Bass said.

For more information on this topic, see our resource center, IRS Rules on Election Activities of Charities

Philanthropy News Digest had a "5 Questions For" column with OMB Watch Executive Director Gary Bass. The questions addressed nonprofit advocacy, particularly how philanthropic support of advocacy is changing. During which, Bass commends a new report on the topic from Atlantic Philanthropies.

He states that a question that continues to stir confusion is whether you can still lobby if you receive public-sector funds and questions on nonpartisan voter engagement.

I firmly believe that from his bully pulpit, the new president, whether it is McCain or Obama, should strongly encourage nonprofits to be involved in a broad range of advocacy activities. I also think foundations have a crucial role to play in helping nonprofits express their voice and in creating a positive framework for change in America. You can't sustain the kind of change I'm talking about — big-vision change — with bake sales.

According to the Denver Post, Priests and deacons serving in the Archdiocese of Denver will be prohibited from donating money to political candidates and from making endorsements under an upcoming directive from Archbishop Charles Chaput. The directive states that clerics "may not publicly participate or endorse political campaigns or initiatives, or publicly affiliate themselves with groups whose primary purpose is to do so." This is of interest because it seems that they would not be allowed to donate in the capacity as a private citizen, separate from their occupational role as a priest. While charities, educational institutions and religious organizations cannot make donations to campaigns, individuals can do so in a personal manner, and not on behalf of an organization.

A federal judge has denied a preliminary injunction request by SpeechNow.org. The 527 group filed a lawsuit against the Federal Election Commission (FEC) in February 2008, challenging federal campaign finance laws that prohibit contributions of more than $5,000 per year to political committees as an unconstitutional violation of free speech and association rights. SpeechNow.org contends that it is unconstitutional to require organizations to comply with the contribution limits for political committees as long as the speech is independent of any candidate or party, funded only by individuals, and therefore can not be corrupt. The case will likely will be appealed to the D.C. Circuit.

Bob Bauer at moresoftmoneyhardlaw.com commented that "Judge Robertson's decision against SpeechNow will not in the long run have done this organization much harm, and it may have done it a favor. [. . .] his opinion highlighted that case's difficulties, particularly the ones that the Supreme Court—speaking hear of the majority deciding cases like Davis—may pounce on."

In a very suspicious manner, the decision states; "SpeechNow's carefully constructed test-case embodiment of 'independence' does not shield it from reasonable campaign finance regulation. [. . . ] neither does the First Amendment require Congress to ignore what its members surely know — that an organization may be legally independent under FEC rules while nonetheless functioning as a fully integrated arm of a major political party."

As Bauer describes, "Robertson decides to locate SpeechNow within a controversy in which it has had no part, and in doing so, he tries to lighten his persuasive burden in arguing the constitutional merits of its claim. In effect, he moves the argument from the activity to the actor, and he implies that the actor is somewhat disreputable and its position not properly given much weight.

The ruling comes to the opposite conclusion on this issue as the Fourth Circuit in the recent North Carolina Right to Life v. Leake case.