Update 3.1.17: The National Council of Nonprofits has a begun petition urging Congress to oppose efforts to weaken and/or repeal the Johnson Amendment. Please sign and share widely.
Context Regarding Policy Changes to the Johnson Amendment:
The Johnson Amendment of 1954 currently prohibits all 501(c)3 organizations (namely churches and nonprofits) from directly campaigning for or against specific political candidates. The Administration has said it would like to repeal or significantly alter current law on the prohibition against nonprofit election intervention. Currently, the Johnson Amendment permits nonprofits and churches the ability to send issue briefs and inform constituents regarding policies and social issues from their perspectives. However, proposed policy changes would expand this to include direct endorsement or opposition for political figures.
What This Means for the Social Sector:
While the current Administration does not have the legal power to repeal the Johnson Amendment, there are currently three different proposals in Congress that would either repeal or significantly amend the Johnson Amendment. Forefront believes changing current law would have far-reaching implications for the charitable sector and would damage trust, threaten our independence, and disrupt our sector’s sustainability.
Should the Johnson Amendment be repealed, donors would be protected from disclosure, limiting organizational transparency and creating an incentive for people to shield their money in 501c(3)s rather than super PACs and PACs. This would also allow 501c(3)s to participate in influencing elections without disclosing their donors. This would allow charities to endorse or oppose political candidates. If churches—and by extension, nonprofits—can directly canvass for or against political figures, this expands their voice from simply sharing about issues and policies to encouraging their constituencies to vote for specific candidates.
This could allow 501c(3)s to spend millions and billions of dollars to influence the electoral process without the American people allowed to scrutinize which parties are behind the contribution. This would make private foundation CEOs, staff, and boards feel pressured to endorse candidates and to support them, financially draining resources from the organization that could go towards charitable purposes.
Currently nonprofit giving has certain tax advantages, and the potential use of giving towards political endorsements undermines the altruistic nature of these charitable gifts. Said expansion of voice also pressures nonprofits to speak out on political matters in a way that could easily detract from their primary mission and goals. Though said expansion seems like an interesting way for nonprofits and churches to more directly encourage civic engagement, it would likely undermine these organizations in the long run.
Options & Their Consequences:
H.R 172: This bill encourages the repeal of the Johnson Amendment by removing stipulations in the Internal Revenue Code defining nonprofits and churches as tax-exempt organizations that may not endorse or campaign against candidates. This change in language would allow for nonprofits and churches to officially and directly endorse candidates for office.
S. 264: Free Speech Fairness Act & H.R 781: Free Speech Fairness Act: This bill would amend the Internal Revenue code to permit tax-exempt organizations to make statements relating to political campaigns without losing tax exempt status. Non-profits would not lose their status if they intervened on behalf of a candidate.
Executive Order(s): This would change the Johnson Amendment so that it does not enforce the law against religious groups as long as political activities are conducted as an ancillary part of regular operations.
Another type of executive order could add a carve-out that exempts religious institutions altogether. An unintended consequence of this would be an increase the need for the IRS to answer what constitutes a church.
Forefront supports the enforcement of laws that prohibit charitable organizations from supporting or contributing to political candidates, or from engaging in partisan campaign activities.
We are disconcerted by recent proposals to repeal this protection in the federal tax code. If the amendment is repealed, the public's overall trust in the nonprofit sector could diminish and limit the effectiveness of nonprofits, especially as nonpartisan problem solvers. A repeal would also circumvent the laws concerning the disclosure of campaign contributions made through nonprofits. If this law was removed, many political organizations would then seek charity status in order to raise tax-deductible funds through undisclosed donors. Many nonprofits would then become political as well.
We believe current law is sufficient. While being barred from lobbying activities, private foundations are free to engage in public debates and participate in issue-focused activities. Charitable organizations are also free to speak out on public policy issues relevant to their mission. However, speaking out and engaging in advocacy are very different from funding political campaigns. Allowing charities to endorse political candidates would allow politicians to use public goodwill towards the charitable sector to advance their own partisan agendas.
We urge policymakers to reject proposals to allow partisan politics in the sector that will undermine public trust in charities and make it more difficult to perform charitable work.
For More Information:
Delia Coleman, Vice President, Strategy & Policy, firstname.lastname@example.org.