Shannon Roddel | June 5, 2019
Beginning in the 1990s and increasingly today, nonprofits are delving into politics. At the same time, political divisions are sharpening and candidates, parties and supporters scramble for any edge to achieve the win. Consequently, many nonprofits violate the vague and seldom enforced legal rules around political activity.
Commentators have long discussed the problem and recommended piecemeal solutions, with little result.
“When Soft Law Meets Hard Politics: Taming the Wild West of Nonprofit Political Involvement,” forthcoming in the Journal of Legislation by Notre Dame Law School Professor Lloyd Hitoshi Mayer, offers a comprehensive roadmap toward achieving appropriate and realistic rules for political activity by nonprofits.
“It’s a consideration of how recommended solutions could be combined in a way that is consistent with long-standing tax policy, encouraging political engagement and the practical reality that both nonprofits and the IRS have limited resources for complying with and enforcing the rules in this area,” says Mayer.
Mayer finds that nonprofits’ increasing political activity is driven by the growing amount of money spent on such activity by outside groups, the desire of some donors to avoid public disclosure of their identities and the reluctance of the IRS to vigorously enforce tax law limits. Violations include the underreporting of political activity in government filings, fly-by-night organizations that exist for only one election cycle in order to avoid penalties, and even organized campaigns that encourage nonprofits to break the rules.
Read more here.