Nonprofits Wade into Political Giving
As executive director of the Friends of the San Francisco Public Library, Scott Staub raises money to give to the city’s libraries. In his spare time, he raises money to give to politicians.
Staub heads a political action committee that is attempting to increase the political clout of the nonprofit sector in federal elections. Most of the committee’s members are affiliated with charitable organizations.
“We want to be a political player in a positive way,” said Staub, chairman of the Association of Fundraising Professionals PAC, an umbrella organization for charitable fundraisers. “There are lots of interest groups, and we decided we needed to have a greater voice for philanthropy.”
The PAC was formed about a decade ago and since then has contributed $68,000 to politicians who support pro-charity causes, especially maintaining the charitable tax deduction.
Charities are prohibited from donating to political campaigns as a condition of their tax-exempt status. But their politically free cousins, PACs, do not face the same restrictions.
The idea of donating money to candidates has been slow to catch on among nonprofit leaders, who typically eschew partisan political activity.
But that’s starting to change.
Robert Egger, a longtime nonprofit advocate, started a second PAC, CForward, in January. Like the fundraisers’ PAC, CForward only supports candidates who back the nonprofits’ agenda.
“Nonprofits represent the biggest unsolicited special interest group in America,” said Egger, who also runs a nonprofit community kitchen in Washington, D.C. “Most candidates are burdened by the idea that dot-com drives the economy while dot-org does good deeds.”
Just look at politics in the San Francisco area, home to one of the largest nonprofit economies in the nation, Egger said. In 2012, there were more than 41,000 registered nonprofits in the Bay Area, according to the Urban Institute. There are 1.63 million tax-exempt organizations in the U.S.
“Candidates can tell you how many manufacturing jobs are in their area,” Egger said. “But can they tell you how many nonprofits there are in their district? No way. I found that astounding. But that’s the status quo of politics.”
According to a survey of 1,500 nonprofit leaders this month [PDF] by Johns Hopkins University, “nonprofit organizations are under assault today as perhaps never before.” More than half the groups surveyed said government officials did not appreciate how the nonprofit sector works and are proposing policies that hurt charities.
“The usual pattern in the U.S. is for groups to start lobbying when they feel that they are under attack,” said Bruce E. Cain, professor of political science at Stanford University. “The current climate is very volatile for nonprofits. They were hit hard by the stock market problems in 2008, and now the threat of charitable deduction limits has to be freaking them out.”
Both Republicans and Democrats have proposed plans to increase revenue by limiting tax deductions that make it easier for the wealthiest Americans to donate to charity. The White House has proposed limiting charitable deductions to 28 percent for families that earn more than $250,000 a year. Last week, House Speaker John Boehner said he would be willing to limit itemized deductions, which could include charitable donations.
“When the (the government) looks to make cuts and get new sources of revenue, charities, because of their tax-exempt status, always become an easy target,” Staub said.
This year, the fundraisers’ PAC supported candidates who oppose any cap on charitable deductions. In 2012, the PAC contributed $23,500 to six members of the House and four members of the Senate who sat on key committees.
CForward has not yet donated to candidates but endorsed eight politicians for city, state and federal seats across the country, including Sean Sullivan, a Democrat who ran unsuccessfully for Oakland City Council and advocated greater involvement by nonprofit groups in the city.
Not everyone in the nonprofit world likes the idea of mixing politics and philanthropy. Most advocates want to focus on their specific missions, such as eliminating poverty or feeding the hungry, not on campaign politics.
“Most people in the sector are scared to death of politics,” Egger said. “They don’t want to offend their donors or are afraid of losing their tax-exempt status. But this is a legal, viable way to get our cause out politically.”
Staub says that while his PAC’s contributions are nothing compared to super PACs that pour millions into elections, having money in the game gets politicians’ attention.
“It’s not pay-for-play,” Staub said. “But when you’re a financial supporter, it does seem to be an easier opportunity to have meetings with lawmakers to present our perspective on charitable legislation.”Related