PROPOSED N.Y. REGULATIONS ON NONPROFITS AND ELECTIONS “RISK CHILLING LEGITIMATE ADVOCACY”

“Modest changes” would solve the problem, AFJ says

WASHINGTON, D.C., MARCH 8, 2013 - Proposed regulations from the New York State Attorney General aimed at exposing a few “sham” nonprofits involved in electioneering risk chilling legitimate advocacy by nonprofits that represent tens of thousands of New Yorkers, the Alliance for Justice said Friday.

"We commend the Attorney General for taking a swing at the wrongdoers,” said Abby Levine, Legal Director of the Alliance for Justice Bolder Advocacy initiative.  “But in their current form, the regulations risk impeding legitimate advocacy by groups ranging from the Sierra Club to AARP.  Fortunately, some modest changes are all that are needed to allow these regulations to accomplish their important purpose without the collateral damage.”

At issue are draft regulations concerning what information must be disclosed by nonprofit organizations that are tax exempt under section 501(c)(4) of the Internal Revenue Code.   These groups are free to use all of their funds to advocate on behalf of causes they believe in – and that advocacy can include lobbying.  They also can engage in some political campaign activity, as long as that’s not their primary purpose.

But because of the abuses of a few groups during the last election, (c)(4) has become the scarlet letter – and numeral – of American politics. 

“That’s understandable,” Levine said.   “During the last election, Americans faced an unprecedented deluge of nasty robocalls and endless negative ads from mysterious organizations with high-minded names, all of which were seemingly random arrangements of the words American, Freedom, Liberty, Family, and Future.  Some of those ads came from (c)(4)s and some of those (c)(4)s may have abused their tax-exempt status.

“While we share the concern that a few wealthy voices can dominate an election, these few malefactors are not representative of the estimated 110,000 501(c)(4)s across the country,” Levine said.

The draft regulations include a very broad definition of “election-related” advocacy.   That could discourage nonprofits from advocating for changes in law and policy out of fear of being seen as doing something considered to be "election-related."   They also require public disclosure of donations as low as $100; something that could scare many everyday New Yorkers away from giving to controversial causes.

“Had these regulations been in effect two years ago, they might well have impeded the ability of gay marriage advocates to lobby for New York’s marriage equality law – a law which came very close to failing in the State Senate.  If they take effect now in their current form, they could impede the efforts of environmental groups to advocate on the issue of ‘fracking.’

“Because we share the Attorney General’s concern about the need for disclosure, we are not calling for the withdrawal of any of his proposed regulations,” Levine said. “Rather, as detailed in our formal submission to the Attorney General, we would like to see adjustments in things like the size of contributions that need to be reported, the definition of “election-related expenditures” and the threshold for total spending on a campaign that triggers the requirements.  We also think it’s important that the regulations draw a distinction between groups funded by a few wealthy individuals making enormous donations, and groups with broad-based public support that rely largely on smaller contributions.

“With good reason, the American people fear that democracy is profoundly subverted when a small group of extremely-wealthy citizens has disproportionate impact on the electoral process,” Levine said. “But the answer to this problem does not need to involve curbing the ability of everyday people to band together in nonprofit associations to ensure that their voices are heard.”

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Alliance for Justice is a national association of over 100 organizations, representing a broad array of groups committed to progressive values and the creation of an equitable, just, and free society. Through our justice programs, we lead the progressive community in the fight for a fair judiciary, and through our advocacy programs, we help nonprofits and foundations to realize their advocacy potential.