Nonprofits walk fine line on political activity

By Elizabeth Wasserman

updated 6:22 a.m. ET July 25, 2008

Nonprofits could be one of the "sleeping giants" of this fall’s presidential election, having as much to do with turning red states blue — or vice versa — as will Iraq, Barack or soaring gas prices.

No way, you say? Nonprofits can’t get involved in politics, right?

Truth is, there’s a fine line between what they can and cannot do legally when it comes to politics. That line distinguishes issues advocacy from partisan electioneering, but this election season, it’s a line that’s getting blurred quite a bit as more groups turn to the Internet to raise money and awareness for their favorite causes and candidates.

To be sure, federal law bars tax-exempt organizations from donating money to a politician’s campaign or endorsing a candidate, either verbally or in writing. But it’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

So how far can a nonprofit go when advocating an issue — without actually endorsing a particular candidate and thereby jeopardizing its tax-exempt status? The short answer: Further than ever before, thanks to the Internet.

Consider a little history. Until recently, the aim of digital get-out-the-vote drives was to get younger voters of either party out to the polls. In the 2004 election, for example, Rock the Vote signed up 1.4 million new voters. Similarly, this month, the nonprofit Hip-Hop Summit Action Network — a coalition of American hip-hop artists — partnered with Time Warner and CPX Interactive, an online ad network, to launch their Vote For It 08 campaign, a multimedia effort aimed at signing up first-time voters through a celebrity PSA campaign and a national bus tour that kicks off next month and runs through October.

With the need to woo more young, social-networking converts to their causes, issues-advocacy nonprofits — 501(c)(4)s — have been flocking to the Internet in droves, from the left-leaning MoveOn.org Civic Action to the right-leaning Christian Coalition.

Shaping public policy debates
Don’t underestimate the online power of nonprofits in public policy debates. MoveOn.org was formed to use the Internet to fight the impeachment of President Clinton in 1998 and wound up generating enough support to help convince the U.S. Senate to acquit Clinton of the charges — even after the U.S. House of Representatives had voted for impeachment. Since then, conservatives have used the Net — in sites like Focus on the Family and Citizens Flag Alliance — to push for legislation banning gay marriage, as well as to force a vote on whether to make flag-burning illegal. Liberals, in turn, also have successfully used sites like MoveOn.org to exert political pressure. One example? Their 2005 campaign to discredit U.S. Supreme Court nominee Harriet Miers and get her to withdraw her name from consideration.

To be sure, 501(c)(4) nonprofits tend to be a little more outspoken than other types of charities. That’s because they are permitted by law to lobby and advocate — but only if their advocacy doesn’t comprise the bulk of what they do. And like 501(c)(3) nonprofits, the “c4s” are also barred from directly or indirectly participating in political campaigns that favor one candidate over another — a line that becomes further blurred as more outspoken (and wealthy) players become more involved. Case in point: In early 2007, billionaire Sheldon Adelson created Freedom Watch, a 501 (c) (4) that last summer spent $15 million on an ad campaign to support the troop surge in Iraq. More recent ad campaigns have accused Democrats of inaction regarding the war in Iraq and soaring gas prices — this as their Web site stresses its nonpartisanship.

And that’s not all. This past May, The Washington Post reported that two key McCain supporters — Joseph I. Lieberman, I-Conn., and Lindsey Graham, R-S.C., removed themselves as board advisers for the nonprofit Vets for Freedom — a self-described nonpartisan organization — after the group ran ads attacking Barack Obama on his failure to visit American troops in Iraq.

Even 501(c)(3)s are considering their potential for political advocacy. “Nonprofits are trusted community partners who can bring a nonpartisan message about voting to a receptive audience,” says Maureen Ramirez Cisneros, coordinator of the Minnesota Participation Project at the Minnesota Council of Nonprofits. 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. Since then, they also have formed the National Nonprofit Voter Engagement Network, to expand that effort to other states.

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