Efforts to limit the influence of anonymous donors in elections took hits last week on two fronts; in both cases, nonprofits were used as the vehicle for increased secrecy and decreased transparency in campaign finance.
First, the U.S. House of Representatives passed an appropriations bill, which includes a rider undermining a longstanding law called the Johnson Amendment. This provision in the tax law was originally enacted during the Eisenhower administration to keep charitable nonprofits out of partisan election politics. Simply put, the Johnson Amendment prohibits charities, including churches, from endorsing candidates for public office in any way, or face losing their tax-exempt status. This bright line is critical, as it has for more than 50 years effectively protected charitable organizations dedicated to the public good from being manipulated, pressured or otherwise drawn into election campaigns.
Unfortunately, a small group has persistently tried to weaken this safeguard. Most recently, the House appropriations bill added controversial language to block the IRS from enforcing the Johnson Amendment when “churches” violate the law. This would give churches and their auxiliaries a free pass to ignore the longstanding law, freeing them up to endorse candidates and divert assets to fund partisan campaigns, potentially turning sanctuaries into political war rooms.
Here’s the problem the proposed change creates. If churches (however they are defined) can divert assets to political campaigns, we will now have a legal pathway for donors to fund political campaigns anonymously while getting a tax deduction for their contribution. And the public would never know who was paying for the endorsements. That’s a big deal, especially at a time when so-called “dark money” has already become an extraordinary influence in elections.
The good news for now is that Senate has replaced the House bill with it with its own version that – so far – does not include the anti-Johnson Amendment. The Senate version is being debated on the floor and the differences between the House and Senate bills will be determined in conference committee negotiations. I write today because it is imperative that members of Montana’s congressional delegation hear from Montanans on the importance of keeping partisanship out of charities by resisting changes to the Johnson Amendment. This statute is a slender protective barrier that has, so far, kept charitable nonprofits, including churches, from becoming the veritable “Swiss bank accounts” for campaign finance. Now is the time to ask our congressional delegation to hold the line on changes that would weaken the Johnson Amendment.
And then there is the other shoe that dropped. Last month the IRS changed the rulebook on disclosure of donations to other types of nonprofit organizations. The Treasury Department announced that the Internal Revenue Service would no longer require non-charitable nonprofits to identify the names of large donors, i.e., those contributing more than $5,000 to the organization. 501©(3) charitable nonprofits would still be required to disclose larger donors to government, but other kinds of nonprofits would be exempt from the disclosure requirement, including more than 300,000 social welfare organizations, labor unions, chambers of commerce, recreation clubs, and other tax-exempt groups.
Read the full story at the Bozeman Daily Chronicle