Advocacy groups are integrating nonprofits into their political operations, a technique that boosts their resources and influence with candidates, a new study from the Campaign Finance Institute concluded.
Using a sample of 12 advocacy groups, drawn from both the left and the right, the study describes how associations are coordinating their affiliated nonprofits, political action committees and tax-exempt 527s to better target the money they raise and increase the group’s impact on issues.
By themselves, PACs, 527s and nonprofits each have rules and limits on what they can do, how they raise money and what they have to report. Coordinating the three eases the limits by letting groups shift activities to whatever operation has the best combination of money and rules.
Coordinating the groups isn’t hard, said Stephen Weissman, associate director for policy at the Institute and a study co-author.
“Commonly it is one person or one unit within the interest groups that runs the [nonprofit], the 527 and the PAC political activities,” he told The Examiner.
The nonprofits in question are not charities, like homeless shelters,
organized under the 501c3 section of the tax code — getting involved in politics would cost them their tax-free status. These are social organizations, trade unions and business associations organized under sections 501c4, 501c5 and 501c6, respectively. They are allowed to engage in campaign activities including buying ads as long as they do not specifically support or oppose a candidate and the politicking is not their primary activity.
Unlike political action committees, these nonprofits are allowed to raise unlimited funds and generally can accept money from unions and corporations. Those who donate to a 501c can remain anonymous and there are other advantages as well.
“Donors to a business group can take a tax deduction if they are businesses,” Weissman said.
That is one reason, he said he believes, that Republican-leaning organizations, who normally get more business support, use nonprofits more often.
Though 501c’s are supposed to report their spending, it is very difficult to determine how much money is actually being put into politics. The amount runs into the tens of millions, reported Public Citizen in the fall of 2004 but is greatly underreported — a problem the IRS has failed to address.
“The IRS does not enforce this,” said Taylor Lincoln, research director of Public Citizen’s Congress Watch.
What is clear is that nonprofits help organizations with an agenda by giving them more money to work with and more clout.
“It is hard for the candidate or the party to ignore it when there is a big donor out there who is helping them even if the donor is not helping them directly,” Weissman said.
