Non-Profits have rules regarding political activity

Richard Burke

Getting tax deductible contributions is a giant benefit. 

There are rules.

     "We support limited government principles, but we don't endorse or oppose candidates, ballot measures, or legislation. [Keeping compliant] is like beating back blackberries in your garden. You've got lots of people coming in doing presentations, and you've got to just keep making sure they are obeying the rules."

Richard Burke, Exec. Director of Western Liberty Network, in taped interview.

The Western Liberty Network had its convention in Lake Oswego this weekend. Today we continue our close look at it.

Some non-profits choose to skate close to the line--or over it--on what is legal and illegal for the political activity of their tax exempt organization. 

Click: Conference website

The good news for scofflaws is slack enforcement: Congress has cut funding for IRS audits in general and on this subject in particular. The IRS cut audit staff back to 2008 funding levels. The Center for Public Integrity writes "Politically active nonprofits are simply 'not afraid of the IRS or anybody else on this manner,' said Paul Streckfus, a former [IRS] exempt organizations division employee who now edits a trade journal focusing on nonprofits. 'Anything goes as far as spending' by these groups.'"

The bad news for scofflaw organizations: there are still rules that can be enforced by the IRS,  and people and organizations that break the rules publicly are subject to exposure. Cheaters are noticed. Maybe they are seen as careless, maybe as sneaky-smart and getting away with something. But they are noticed.

What are the rules?

Here is a screen print from the IRS website. The IRS refers back to this section in various explanations of their rules:

Click to go to the original site

The plain-English intent of the IRS rules is to distinguish between campaign organizations and actual bonafide public-education and voter engagement organizations, and in the third paragraph to distinguish between sham versus actual intent and practice. It would be easy for an organization to put up conspicuous disclaimers of non-politicking as a cover story and eyewash. So the third paragraph clarifies the difference, which I will repeat here:

"On the other hand voter education or registration activities with evidence of bias that (a) would favor one candidate over another, (b) oppose a candidate in some manner, or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention."

All non-profit organizations--regardless of political position--are required to operate by those rules. Many of my readers are involved in one or more of them. 

I enjoy vigorous political conversation. I seek it out. I have no objection whatever to the content I witnessed, which I consider absolutely valid, partisan political talk of the kind i hear at Party Central Committee meetings and campaign fundraisers. But I am a taxpayer, too. I make both charitable and political contributions and am acutely aware of the difference.  Charitable contributions use pre-tax dollars, and therefore go nearly twice as far as political contributions, which take place with after-tax money.

I found the Executive Director Richard Burke to be pleasant among busy multi-tasking during the Conference. I wish him well. But, simultaneously, I expect people in his position to obey the law. Oregon and federal taxpayers have an interest in the rules being observed. People who hold positions of public trust  (i.e. member of the Oregon Ethics Commission) should not be tax scofflaws, because they set an example for others on what constitutes ethical behavior by people involved in politics.

Now we know the law. Did the Convention obey the law? Hint: the candidate and campaign material was in plain sight 30 feet from the executive director during the final two hours of the Conference.

In tomorrow's post I will cite examples of what I saw, recorded, and photographed at the conference. Readers will judge for themselves.