July 27 Director’s Corner

July 1, 2018 / Comments Off on July 27 Director’s Corner

MNA News Policy News

Don’t Hijack Nonprofits for Partisan Gain
Liz Moore
Executive Director, MNA 

Efforts to limit the influence of anonymous donors in elections took hits last week on two fronts; in both cases, nonprofits were used as the vehicle for increased opacity in campaign finance.  

First, the U.S. House of Representatives passed an appropriations bill which includes a rider undermining a longstanding law called the Johnson Amendment. This provision in the tax law was originally enacted during the Eisenhower administration to keep charitable nonprofits out of partisan election politics. Simply put, the Johnson Amendment prohibits charities, including churches, from endorsing candidates for public office in any way, or face losing their tax-exempt status. This bright line is critical, as it has for more than fifty years effectively protected charitable organizations dedicated to the public good from being manipulated, pressured, or otherwise drawn into election campaigns.


Unfortunately, a small, but very well-funded interest group has persistently tried to weaken this safeguard. Most recently, the House appropriations bill added controversial language to block the IRS from enforcing the Johnson Amendment when “churches” violate the law. This would give churches and their auxiliaries a free pass to ignore the longstanding law, freeing them up to endorse candidates and divert assets to fund partisan campaigns, potentially turning sanctuaries into political war rooms. 


Here’s the problem the proposed change creates. If churches (however they are defined) can divert assets to political campaigns, we will now have a legal pathway for donors to fund political campaigns anonymously while getting a tax deduction for their contribution. And the public would never know who was paying for the endorsements. That’s a big deal, especially at a time when “dark money” has already become an extraordinary influence in elections.


The good news for now is that Senate has replaced the House bill with it with its own version that – so far – does not include the anti-Johnson Amendment. The Senate version is being debated on the floor and the differences between the House and Senate bills will be determined in conference committee negotiations. It is imperative that members of Montana’s congressional delegation hear from Montana’s nonprofits and our constituents on the importance of keeping partisanship out of charities by resisting changes to the Johnson Amendment. This statute is a slender protective barrier that has, so far, kept charitable nonprofits, including churches, from becoming the veritable “Swiss bank accounts” for campaign finance. Now is the time to tell our congressional delegation to resist changes that would weaken the Johnson Amendment.


And then there is the other shoe that dropped. Last Monday the IRS changed the rulebook on disclosure of donations to other types of nonprofit organizations. The Treasury Department announced that the Internal Revenue Service would no longer require non-charitable nonprofits to identify the names of large donors, i.e., those contributing more than $5,000 to the organization. 501(c)(3) charitable nonprofits would still be required to disclose larger donors to government, but other kinds of nonprofits would be exempt from the disclosure requirement, including more than 300,000 “social welfare organizations, labor unions, chambers of commerce, recreation clubs, black lung benefit trusts, and other tax-exempt groups.


This matters to Montanans and all Americans because the change in rules paves the way for an increased flow of contributions through so-called “dark money” groups who will now be able to pour more  “dark money” into national, state, and local elections with even less government oversight than before. In addition, the change opens the door for foreign entities to influence elections by making anonymous donations to particular nonprofits that back friendly candidates.


One of the reasons MNA exists is to ensure charitable nonprofits can pursue our various missions in a healthy operating environment. Transparency is an essential component of that environment; we don’t want our good name and reputation muddied by the actions of a small minority interested in increasing secrecy in elections for their own selfish gains. Using nonprofits as vehicles to influence elections is a hijack, and one the vast majority of nonprofits in Montana and in the nation don’t want. Within Montana’s nonprofit community, our missions are varied, but we speak with one voice when we ask Montana’s congressional delegation to act swiftly and decisively to ensure nonprofits don’t become a repository for an increasing amount of dark money. Reach out to Senator Daines, Senator Tester and Congressman Gianforte and ask them to stand with nonprofits on behalf of the common good by using their leadership positions to resist attempts now and in the future to weaken the Johnson Amendment and push back on the Treasury Department’s decision to decrease donor disclosure requirements. Nonprofits should serve communities, not candidates.