When the president of Catholic Answers posted an e-letter on the nonprofit’s website eight years ago questioning whether Sen. John Kerry (D-Mass.), a Catholic, should receive communion at Mass because of his support for abortion, the organization believed he was simply stating an opinion about the then-presidential candidate’s stance on an issue important to Catholics.
The e-letters referred to a voter’s guide, which discussed church teachings on what Catholic Answers considers five “non-negotiables.” Even though it did not identify specific candidates — the Internal Revenue Service (IRS) thought Catholic Answers overstepped its bounds into the political arena. The IRS levied small excise taxes totaling $102.23. When the organization contested the decision in court, the IRS refunded the fine, which effectively ended the case.
But Catholic Answers, based in San Diego, Calif., this past October asked the U.S. Supreme Court to consider the case and to rule on the regulations and the IRS’s tactics. While Catholic Answers will provide a voters’ guide through Catholic Answers Action, as it has in past elections, for the 2012 presidential election, spokesman Jimmy Akin said the organization might not comment on how a Catholic candidate’s views compare to official church teaching, as it did with Kerry. Akin cited what he called a “chilling effect” on free speech caused by ambiguity over what is banned and IRS tactics that end court challenges without a clarification of what the tax code regulations mean.
“The IRS is de facto violating our free speech rights,” he said, since nonprofits often do not understand what they can or cannot do. The case illustrates the dangers nonprofits face this coming election year, concerns that are compounded by the rise in use and types of social media messages the organizations might use. What might seem to be an innocent comment to supporters could be considered political speech by the IRS.
Gary Bass, executive director of the Bauman Family Foundation and founder of OMB Watch, both in Washington, D.C., said the ambiguity of the restrictions on nonprofits could lead some organizations to muzzle their views on topics such as health care, the right to life or to choice in abortion and gun control, even if those are their primary concerns.
Catholic Answers is one of more than 250 organizations investigated by the IRS because of activity during the 2004, 2006 and 2008 election cycles. More than half were found to be valid complaints; seven of those nonprofits lost their tax-exempt status. The IRS listed 133 cases of what it considers substantiated political activity by nonprofits during the 2008 election season, including 16 cases where it found that an “organization endorsed candidates on its website or through links on the website.”
Social media increases fears for nonprofits regarding what the IRS could determine to be de facto endorsements even when the group’s resources, such as its computer equipment, are not used and the action takes place after hours and away from its facilities, according to Susan Brown, public policy director of the Minnesota Council for Nonprofits in St. Paul, Minn. One concern is that a key employee, readily identified within the community with the organization, might post an endorsement on a personal Facebook page, Twitter account or blog. Given the community’s identification of the person with the nonprofit, would that endorsement constitute de facto support by the organization?
“It’s a balancing act,” Brown said. “In the nonprofit sector we believe deeply in community and voter involvement, and do not want to squelch people’s ability to participate,” yet the nonprofit wants to protect its tax-exempt status for donations.
Bass described that scenario as “potentially a dicey issue. There’s a core First Amendment issue that needs to be protected. If the individual is extremely clear that his time is on his own time and all the resources of the blog [or post] … are the individual’s own cost, that’s a First Amendment right to express his or her point of view.”
The lines become more blurred when an upper-echelon official of the organization makes the endorsement. Many of the Facebook or Twitter postings on behalf of high-ranking officials at larger nonprofits are developed and put online by a communications department, said Allen Mattison, an attorney with the Washington, D.C., law firm Trister, Ross, Schadler & Gold, whose expertise includes IRS tax exemptions and campaign finance.
The social media landscape is filled with question marks, Mattison said. “The IRS has never said how they’re going to treat these emerging social media vehicles,” he said, so Mattison suggested using those media the same as any other resources, such as newsletters. “A common sense approach will help keep them compliant in election years and in non-election years,” he said.
One “common sense approach” is to have clear policies in place and to educate staff, volunteers and board members about what the organization can or cannot do. “Agencies are dealing with the possibility of political uses by employees and volunteers by setting social media guidelines,” said Irv Katz, president and CEO of the National Human Services Assembly in Washington, D.C.
The Nonprofit Technology Network (NTEN) in Portland, Ore., suggested nonprofits “tread lightly,” said Holly Ross, executive director. “The laws are behind the practice of social media, and you won’t want to be the organization to be made an example of.”
Concerns regarding IRS regulations for 501(c)(3) organizations go beyond what can be posted on social media as nonprofits walk the line between advocating on issues important to their mission and endorsing — sometimes unintentionally — candidates for office. Even the clarity of IRS regulations is questioned. Bass, for example, said the IRS provides “very clear standards” on a nonprofit’s limited lobbying ability but does not define what constitutes partisan political activity. “That ambiguity leaves nonprofits in a void [that] can become chilling. … It gets diceier because if the candidates have strongly-held views that are disparate, talking about those issues might be taken as partisan.”
Abbie Levine, legal director, advocacy programs, of the Alliance for Justice in Washington, D.C., gave as an example an organization whose mission is strongly associated with healthcare issues. “How does an organization continue to talk about an issue it cares about without comparing the views of candidates? They have to think about what they are putting out and why, and ensure it talks about the issues instead of the candidates.”
Errol Copilevitz of Copilevitz & Canter LLC in Kansas City, Mo., whose practice focuses on tax-exempt organizations, charitable fundraising and First Amendment issues, describes those same IRS regulations as “more defined” than guidelines on lobbying since “the test on partisan politics is more black and white.”
He suggested nonprofits develop social media policies that insist that employees who post on YouTube or Facebook or Twitter, “make clear that they are speaking in their individual capacity” and not as an employee of the organization. But, he noted, “Policies are only as good as people are willing to comply with them. … My lasting advice is, don’t even consider coming close to being involved in partisan politics. Focus on your mission and you’ll never have to worry about this.”
Mattison doesn’t think such advice means nonprofits should stop discussing hot-button topics should they become election issues. “They just need to be careful that they are not influencing the election,” he said. “But short of that, they shouldn’t feel stifled at all or have their First Amendment right to free speech curtailed just because there’s a presidential election going on.”
There is another way. “Many groups conduct their political activities through a separate entity, like a 501(c)(4) social welfare organization or a civic league,” according to Allen R. Bromberger, an attorney with Perlman & Perlman in New York City, which specialized in nonprofit law and regulation.
“The 501(c)(4) can do unlimited lobbying and issue advocacy, voter education, debates, get-out-the vote drives, operate a PAC, and make direct contributions to candidates, while the 501(c)(3) is protected,” he said. “And, it doesn’t have to disclose the names of donors the way charities do. The downside is that contributions to the 501(c)(4) aren’t tax-deductible.” NPT