Posted: December 19, 2006

Political Campaigning by Churches and Charities

In his recent blog post, Bob Bauer summarizes and criticizes my recent article on "Political Campaigning by Churches and Charities." In one sense, I was pleased to read his comments. Bauer fairly and accurately summarizes the main substance of my argument – that allowing (c)(3)s to intervene in political campaigns is bad for (c)(3)s and bad for democracy. His criticisms, however, miss some of the fundamental premises underlying the article, and his implied remedy has serious problems of its own. In the article, I defend the prohibition in the Internal Revenue Code that prevents tax-exempt 501(c)(3) organizations from intervening or participating in political campaigns on behalf of a candidate for Federal office. I believe the prohibition is good public policy, helps keep a level playing field in elections, and is constitutional. Most tax-exempt organizations are allowed to engage in at least some level of intervention in a political campaign, and as Bauer notes, even corporations are allowed to endorse candidates. Section 501(c)(3) organizations, however, are different. They are in a sense "super tax-exempt." Section 501(c)(3) organizations receive a dual subsidy. They are not required to pay tax on their income, and contributors to the organizations are able to deduct the contributions under section 170 of the Internal Revenue Code. Thus, even more so than other tax-exempt organizations, the citizenry as a whole, through the public fisc, is being asked to subsidize the organization. Religious institutions, charitable organizations, and educational organizations qualify for this super subsidy. As a condition of receiving this subsidy the organizations must meet certain requirements, including a prohibition from intervening in political campaigns. Some 501(c)(3) organizations have cried foul, arguing that they have a First Amendment right to intervene in elections. There is, however, no First Amendment problem here. These organizations voluntarily seek preferential tax status. They know the restrictions and benefits of that status and choose to seek it. If the organization did not want to comply with the restrictions, it could organize in a different form, forgo the super subsidy, and engage in as much campaign related activity as it wanted consistent with federal election law. The underlying policy question is why should the government subsidize campaign activity for this select group of organizations? My goal in the article is to defend the above restriction by showing that it is both constitutional and good public policy. Bauer acknowledges my policy concerns but argues that they are a parade of horribles and by implication, not what would happen in the real world. Bauer seems to argue that allowing religious institutions some small amount of leeway to intervene or participate in political campaigns would not produce the horrors that I fear. Bauer may be right, and my colleague Allan Samansky has made just such an argument in a recent article. In fact, Samansky also disagrees with my constitutional argument and believes that churches have a constitutional right to intervene and participate in political campaigns. But what I think Bauer misses is that the "parade" I envision is more plausible than he thinks. Political campaigns have found new and innovative ways to influence the electorate. Recent experience has shown that campaigns will attempt to use churches to influence voters and that non-profit organizations are particularly vulnerable. Do we really want our churches and charities to become extensions of political campaigns? Bauer is right, a limited exemption might not produce such a result, but there is already significant abuse in this area. There is every indication that many organizations will push the line as far as they can. For example, if we allow organizations to endorse candidates to their membership, how do we define membership? A broad conception of membership could completely destroy the "limited" exemption. Bauer also correctly notes that current campaign laws would also provide some limitations for (c)(3)s. For example, even if there were a limited exemption, 501(c)(3)s would still be subject to federal contribution limits. But as Bauer knows probably better than anyone, those laws still allow a tremendous amount of election activity. Providing for a limited exemption simply increases the potential loopholes and increases the chances that the consequences I fear will come to pass. Moreover, Bauer criticizes my argument that the prohibition is good for (c)(3)s. But here I think Bauer fails to recognize the amount of coercion and pressure government and politicians can place on religious institutions. Recent campaign experience shows that politicians can and will place pressure on religious institutions to promote politicians campaign or party. The political campaign prohibition helps protect religious institutions from this coercion. Churches and other non-profit organizations already have significant ability to influence the electorate and to reach out to their members. The political campaign ban is a minor limitation that seeks to prevent the use of taxpayer dollars to subsidize speech aimed at supporting or promoting a specific candidate. If 501(c)(3) organizations want to intervene in political campaigns, let them do so without taxpayer provided subsidies. That is what the rest of us are forced to do. Let organizations formed to preach to the masses, help the hungry, and educate our children do just that. We lose far less when we prohibit these organizations from engaging in political campaigns than we would lose if the public lost faith in its religious and charitable institutions.

Donald Tobin is an expert on the intersection of tax and campaign finance laws. He served on Capitol Hill and in the U.S. Department of Justice before arriving at the Moritz College of Law in 2001. His two articles on the relationship of tax and campaign finance laws concerning the regulation of political groups having tax-exempt status under section 527 of the Internal Revenue Code, his work on charities and their involvement in political campaigns, as well as his co-authored work with EL@M Director Edward B. Foley, have been widely recognized as leading publications on this topic. View Complete Profile