Nonprofit Law Podcast #11

I've just posted Episode #11 of the Nonprofit Law Podcast... this week I give the basics on fiscal sponsors. Check out the shownotes and resources at nplawcast.com!

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FEC asks for input on WRTL

Yesterday, the Federal Election Commission released a notice of proposed rulemaking on how it intends to handle the Supreme Court's ruling in WRTL. The Commission has its response narrowed to two options... both allow communications to be paid with corporate or union funds if they are “susceptible of a reasonable interpretation other than as an appeal to vote for or against a clearly identified Federal candidate.” Option one requires disclosure to the FEC if a communication mentions a candidate and falls within 30 days of a primary or 60 days of an election, and the other does not.

I suspect the usual opponents will square off on this during the comment period...

Craigslist Foundation: a nonprofit clearinghouse?

I've been a fan of Craigslist Foundation's work, particularly their bootcamps. Their new direction is very interesting... check out Project Entry Point:

We are transforming the existing Craigslist Foundation website into a comprehensive doorway to the nonprofit sector using a design inspired by craigslist.org and customized to the needs of the sector. Like craigslist.org, Craigslist Foundation's website will connect people to the services they need, to the jobs they seek, and to the peers they want to meet.

If they can pull this off in a useful way, this will be incredibly helpful for the larger nonprofit community... imagine having one-stop internet "shopping" for information on how to deal with issues that others have successfully navigated? This could be a boon for best practices and legal compliance.

Starting a Nonprofit: What You Need to Know

Although it is a little over two years old, this is a nice resource... Starting a Nonprofit: What You Need to Know (PDF) is a manual created by law students at the University of Richmond that outlines some of the basic legal issues for creating a nonprofit organization. It's free and available for download under a Creative Commons license... a nice alternative to the other beginner manuals out there.

Nonprofit Law Podcast #10

Episode #10 of the Nonprofit Law Podcast... recorded live in Saugerties, NY... this edition, we cover the world of restricted funds and lobbying. Check out the shownotes and resources at nplawcast.com!

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Should Nonprofit Organizations Play an Active Role in Election Campaigns?

The Bradley Center has posted the forum on nonprofits and elections here. As always, this is a lively debate topic!

Form 990 junkies, take note...

If you're interested in more on the future of Form 990 (the annual tax return form for many nonprofits), Alliance for Justice has scheduled a telephone conference that might be up your alley...

The call will focus on lobbying, political activities, and corporate governance that will be a part of AFJ's comments to the IRS. RSVP to Kyle Murphy at kyle(at)afj(dot)org by August 20 at 4pm ET. Instructions will be forwarded to all registrants on that date.

Nonprofits and candidates

Eliza Newlin Carney writes in today's Rules of the Game column that nonprofits that are run by current candidates should be subject to greater disclosure rules:

Nonprofits have defended their right to privacy long and passionately, arguing that disclosure of donors would squelch contributions and hurt worthy causes. But such groups enjoy tax-exempt status on the grounds that they work for the public good, not for the good of politicians. Tax-exempt groups that associate themselves with candidates in a high-profile, high-dollar presidential race must be held to a higher standard of disclosure.

While she cites some high profile abuse of charities by politicians, I'm not so sure this rises to the level of crisis portrayed in the article. It is a good - not bad - that high profile people are involved in charitable causes. Would disclosure rules really stop a candidate who is already breaking tax law by supporting a campaign through a charity?

I'm not at all opposed to regulating nonprofits... it just needs to be worthwhile and effective. I'm skeptical that this proposal would do anything to stop malfeasance. It will only create additional reporting requirements for charities that are doing good work with the help of a person who happens to be running for office.

Nonprofit Law Podcast #9

Episode #9 of the Nonprofit Law Podcast is up a little earlier than normal since I'll be on the road tomorrow... this week, we're looking a little more at the big picture: do you really need a nonprofit? Check out the shownotes and resources at nplawcast.com!

And, just because I like to cater to the early-adopting techie types... I have a special page set up to listen to the Nonprofit Law Podcast on your iPhone thanks to the folks over at the Financial Aid Podcast who are way smarter than I am at coding such things!

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On the road

I'll be out and about in upstate New York for the next week or so, so posting might be a little lighter than normal. Those of you who are Nonprofit Law Podcast listeners, the next show will be posted Sunday as usual Saturday night. August seems to bring insane heat and a dearth of news on the nonprofit law front, so enjoy the quiet times!

Wiki on the new Form 990

If you're interested in collaborating with others regarding the new Form 990, think about heading over to the National Center for Charitable Statistics and Guidestar's wiki. If you're not familiar with wikis, they are collaborative websites which can be edited by anyone. Sounds like a disaster, but usually they work quite well (like Wikipedia... usually). This is a great resource if you want to learn more about the revision or add your two cents to the discussion on how it can be improved.

Thanks to Gene Takagi's Nonprofit Law Blog for the pointer...

Nonprofit election activities forum

The Chronicle of Philanthropy has an article on last week's forum on election year activity by nonprofits... the consensus seems to be that the IRS and lawmakers need to give the nonprofit community more guidance. Best line quoted in the article... "The IRS confuses itself with the Centers for Disease Control... [i]n cutting out the tumor, they tend to cut out vital organs."

Nonprofit boot camp

Craigslist is great for searching for jobs and perhaps a used Mac... but the folks over there have also formed a foundation that helps nonprofits. The Craigslist Foundation's nonprofit boot camps are outstanding opportunities to learn and network... check out the upcoming ones in Berkeley (Saturday, August 18th) and NYC (Saturday, September 15th). DC's is right around the corner, and I hope to be able to attend... I'll post details when they announce the dates.

But, there's more... past boot camps have audio and other online resources. Check out the information from 2006's boot camp in San Francisco. One lecture of interest to readers of this blog is IRS audit manager Joe Kroll's rundown on the laws of 501(c)(3)s. The lecture can be found here, complete with a snazzy online player.

Correcting nonprofit reporting

This post is in response to a commentary piece today on wired.com that has misreported the lobbying rules for a nonprofit... it's an attempt to set the record straight on the law, and yet another plea from yours truly that reporters and bloggers need to contact people that actually know nonprofit law when commenting or reporting on the matter.

Wired.com posted a comment today regarding alleged illegal lobbying by SoundExchange, a nonprofit that has been designated by Congress and the US Copyright Office as the collector of digital royalties (iTunes sales, for instance) for music artists and record labels. SoundExchange is a 501(c)(6) trade association (see GuideStar here, but you'll need an account) and, according to its site, has been granted the exclusive authority to collect these royalties under the Copyright Act.

Any 501(c)(6) has the right to engage in lobbying activity under the tax code (see Revenue Ruling 1961-177) (PDF). One normally sees a lot of lobbying activity by trade associations, particularly if they are based in DC as SoundExchange is. However, the Copyright Act specifies the uses for the royalty money, and lobbying is not one of those uses that got the thumbs up from Congress (see section 114(g)). Guess who is a major funder of the lobbying group, MusicFIRST Coalition? You guessed it... SoundExchange.

The Wired commentator, Eliot Van Buskirk, asserts that SoundExchange has violated the law by funding a lobbying organization... but that's wrong. My read of the statute says that SoundExchange can only use the royalty money for administration of royalty collection, dealing with disputes in royalties, and dealing with the narrow issue of recordings made by entities that have a license to broadcast a performance. That's it... lobbying's not on the list. But the key here is that the use of the royalty money is restricted. SoundExchange can use other sources of money and legally use that as the source for lobbying. SoundExhange's general counsel told Van Buskirk:

Funding provided by SoundExchange to musicFIRST is authorized by copyright owners and performers who have chosen to become members of SoundExchange. These contributions come only from our members and not from non-member royalties, and were unanimously approved by the SoundExchange board.

So... the funds are coming from member dues, not from royalties, therefore the Copyright Act restrictions do not apply. Van Buskirk consulted an intellectual property professor and a music attorney to find out if there was specific legal authority for a nonprofit to lobby, and was told there is no specific statute authorizing the activity.

Of course, this is nonsense. Trade associations are free to lobby pursuant to their status under Section 501(c)(6) of the tax code, and have since 1961 (PDF). A little research, like googling "501(c)(6) lobbying" leads to a host of information on this legal point. The IRS has plenty of information in Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations (PDF). On page 2. Asking an IP law professor and a music lawyer who don't look anyplace except one section of the Copyright Act won't give the right answer... Mr. Van Buskirk should have spoken with someone who knows nonprofit law, but more to the point, these two attorneys should have said they had no expertise in nonprofit law rather than lead Mr. Van Buskirk to believe SoundExchange was acting outside of the law.

Perhaps as a safety cushion on the point, Van Buskirk suggests that even if the lobbying was legal it was still out of bounds because "Congress intended to keep SoundExchange out of the lobbying business." That's simply not what the statute says. Congress clearly intended to keep SoundExchange out of the lobbying business with royalty money... and that's not semantics... it's what Congress said in the law.

Before I close out on this... don't take my post here as defense of the music industry or their trade associations on substantive issues or what they lobby for... I'll keep my thoughts on that to myself. However, the law's pretty clear on all of this, and I wish it had been reported correctly.

Nonprofit Law Podcast #8

Episode 8 of the Nonprofit Law Podcast is now available... this week there's math, so pull out the calculators as we go through calculating public support. Check out the shownotes and resources at nplawcast.com!

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Ethics reform passes Senate

The ethics bill I mentioned the other day just passed the Senate and is on the way to the President's desk... where it meets an uncertain fate. The White House is not happy with certain provisions in the bill, but has not commented on the part that impacts nonprofits (which, admittedly, is a very minor piece of the legislation).

Bauer on WRTL

Bob Bauer has two entries on his blog reviewing Rick Hasen's WRTL article... as one would expect, he finds flaws in his theoretical and practical analysis. And, as one would usually expect, i find the truth somewhere in the middle. I suspect we'll see a lot of ads that fall within the Supreme Court's newly created safe harbor addressing some kind of legislative issue that might also be seen to have campaign impacts. How prevalent these ads become remains to be seen... ultimately the ads will have to achieve their desired effect on the ad consumer. If they work in the way the ad producers want, you can bet you'll see more of them. In other words, the focus groups (i.e. John and Jane Doe turning dials in some windowless conference room in Des Moines and Manchester) will ultimately decide how many ads that have electoral impact see the light of day.

Ethics bill and charities

The freshly-passed ethics bill includes a provision of interest to some charities. The bill imposes additional reporting requirements on lobbyists who make contributions to charities that are controlled by members of Congress. The bill does not limit or prohibit a lobbyist from supporting a charity maintained, established or controlled by a member of Congress.

Deregulating election laws

Rick Hassen posted his latest paper on the Supreme Court and election law, Beyond Incoherence: The Roberts Court's Deregulatory Turn in FEC v. Wisconsin Right to Life. Based on the title, I suspect he's not a fan of the Roberts Court... A little reading for your Tuesday if you're into analysis. After my tangle with Dulles Airport (which I may personally rename to include expletives, but that's another post), I may hold off until later...

Nonprofit Law Podcast #7

Episode 7 of the Nonprofit Law Podcast is now available... this week, I cover publishing legislative scorecards. Check out the shownotes and resources at nplawcast.com!

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More Nonprofit Law Podcast kudos

More kudos for the Nonprofit Law Podcast came from onPhilanthropy this week... it's gratifying that the latest episode on social networks is getting a lot of positive feedback. I think nonprofits have been very innovative in the use of technology, but unfortunately the law does not give much guidance on the legality of these innovative strategies... I'm glad the podcast and some of my other projects will be helpful on the subject.

Nonprofits and elections discussion

The Hudson Institute is hosting an event entitled, Should Nonprofit Organizations Play an Active Role in Election Campaigns? on August 9th from noon to 2 PM in DC:

Recent readers of The Chronicle of Philanthropy witnessed a lively discussion unfold on its pages between D.C. Central Kitchen president and author ROBERT EGGER and Georgetown University scholar PABLO EISENBERG. With a view to the next election cycle, Egger argued in a May 31 opinion piece* that nonprofit organizations deserve the kind of political stature corporations enjoy because like corporations, they employ millions of Americans, command billions of dollars in resources, and thus play a vital economic as well as civic role in their communities. Yet nonprofits face a double standard when it comes to political activity, and they “accept their muzzled role.” Egger concludes that the laws that prohibit charities from direct campaign activities “not only are outdated, but also will be counterproductive” as nonprofits continue to grow in size, wealth, and stature.

Eisenberg, a regular contributor to the Chronicle, responded to Egger in his June 28 column.** “Existing regulations are not the culprit for the nonprofit world’s failure to be more activist and politically involved,” he wrote. Historically, charities and foundations have held themselves apart from business and government, serving as a mediating force between the two. Yet as a result, nonprofit groups have “enormous leeway in supporting and promoting activism and influencing the political system.” The problem is not that these organizations are hampered by their nonprofit status and all that it entails, Eisenberg argued, but that most simply fail to exercise their current rights to organize communities, communicate with elected officials and their staffs, and educate and register voters.

On Thursday, August 9, Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal will host a discussion between these two storied nonprofit sector leaders. Chronicle of Philanthropy editor STACY PALMER will serve as the discussion’s moderator. Please join us! Lunch will be served.

* “Charities Must Challenge Politicians,” Robert Egger, The Chronicle of Philanthropy, May 31, 2007. (For an electronic copy, visit the Chronicle's web site at http://www.philanthropy.com. Also available in PDF form - click here.)
** “Charities Should Remain Nonpolitical,” Pablo Eisenberg, The Chronicle of Philanthropy, June 28, 2007. (For an electronic copy, visit the Chronicle's web site at http://www.philanthropy.com. Also available in PDF form - click here.)

I plan on attending... this should be an interesting discussion.

WRTL: the FEC and settlements

The final disposition of the WRTL case seems to let nonprofits engage in grassroots lobbying without interference from the FEC. Following settlements in WRTL and a subsequent case, the parties and the FEC have agreed that the Supreme Court has essentially determined that genuine issue advertisements are not regulable by the FEC. The new standard, for those playing the home game, is that communications may only be regulated if they are “susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.”

That's pretty hard for the Congress to prove, and it seems that the pendulum has swung back to favor advocacy rights over the need to regulate campaign finance. Alliance for Justice has more here.

Nonprofit Law Podcast #6

Episode 6 of the Nonprofit Law Podcast is now available... this week, I cover the legal issues for nonprofits using social networks like MySpace and Facebook. Check out the shownotes and resources at nplawcast.com!

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IRS Draft Form 990 teleconference

Today's IRS teleconference on the new Form 990 was interesting. Here are the highlights:

Reasons for change & approach
The form is outdated... it was last updated in 1979. Since then there have been an explosion in the number and sophistication of tax exempt organizations. The current form has been "jury rigged" to deal with changes, and that has not been effective. The form can't be renumbered in the current system, so the form often makes no sense. This leads to incomplete and incorrect filings.

The new form is designed to increase transparency, improve compliance and reduce burden on filers. One of the ways to deal with this was to reduce the number of schedules and restructure the whole form so that it makes more sense and is more consistent, especially for smaller organizations.

Overview of the redesign

• A summary or snapshot of the organization... the information all comes from other places on the form
• New calculation of efficiency and effectiveness indicators (seeking comments on this)
• Five highest compensated individuals (not just officers, etc.) - must use W2 or 1099 reporting and it expands beyond just 501(c)(3)s
• City and state of residence for individuals added (currently allows address of the organization)
• Page 4 - mostly new questions on governance (seeking comments)
• More breakdown on types of support and some forms of expenses
• Part VII - trigger questions for filing schedules (seeking comments)
• Part VIII - trigger questions for filing other IRS forms (seeking comments)
• Trimmed to 15 Schedules... some highlights:
• Schedule A is still for (c)(3)s only but it has been streamlined. It includes a public support test section with a five year period instead of four. Lobbying information has moved to Schedule C.
• Schedule B is largely unchanged (lists donors).
• Schedule C includes lobbying and inter-organization transfers with 527s.
• Schedule D has a mix of old and new, including Donor Advised Funds
• Schedule F has new information on foreign activities
• Schedule G has new information on third party fundraising (not internal development officer information, however)
  
• Schedule I still covers grants, but there are some changes
  
• Schedule J is new and targets information on highly compensated individuals
  

More information on the draft Form 990 is here. As far as the Form 990 goes, it looks like this new form may be simpler to handle, but as with any change, people who are used to the old form may be puzzled by the proposed changes. It seems like the IRS has put a lot of effort into this redesign, but it remains to be seen the degree to which this helps smaller nonprofits. There may be some threshold changes to the Form 990-EZ to help with that, but those changes are unclear right now (the IRS is seeking comment on that). The very smallest of organizations will be filling out a new Form 990-N beginning in 2008... basically a postcard that includes very limited information for filing.

Comments are due by September 14th (details here) in order to get this new form ready for fiscal 2008 (filed in 2009). The IRS rep says that if the new form is not finalized by December of this year it could not be implemented until 2012. That seems odd, but it apparently has something to do with the IRS technology division... and you don't want to argue with them, I suppose.

Forum on election activity

I received an invite to a panel discussion on election activity for 501(c)(3) charities in my email box yesterday... I plan on attending, and will post my thoughts on the blog afterwards. I've copied the information in case anyone is interested in participating in the discussion:

OMB Watch invites you to a panel discussion on the Pros and Cons of an IRS Bright Line Rule for Campaign Activities for Charities and Religious Organizations

Has the IRS' more aggressive approach to enforcement of the ban on partisan activities by 501(c)(3) organizations created unanswerable questions for your organization?

Ever wonder why IRS rules can't define permissible electoral activity as clearly as they define lobbying?

What impact could the recent Supreme Court decision in FEC v. Wisconsin Right to Life have on IRS enforcement policies? Does the IRS enforcement process need to be changed?

Hear experts discuss these questions and more:

Friday, August 3
10 a.m. to 12 p.m.
2040 S Street, NW, Washington, DC

Participants may also join by phone
Dial 1-302-709-8424; participant code 11549882# (not toll-free)

Panelists include:

Gregory Colvin
Attorney, Silk Adler & Colvin, expert and author on nonprofit lobbying and political activities. Co-Chair of the Subcommittee on Political and Lobbying Organizations and Activities of the Exempt Organizations Committee of the Tax Section of the American Bar Association.

Beth Kingsley
Attorney at Harmon Curran Spielberg & Eisenberg specializing in tax exemption, lobbying, policy advocacy and federal election law. Co-chair of the ABA Exempt Organizations Committee's subcommittee on Forms, Rulings, and Administrative Developments

Marcus Owens
Former IRS Director of Exempt Organizations Division and attorney at Caplin & Drysdale. Represents a broad range of tax-exempt organizations. Projects include organizations interested in public policy but concerned with legislative and political activities. Co-chair of the ABA Tax Section EO Committee's Subcommittee on Audits and Appeals

Moderator – Kay Guinane, Director – Nonprofit Advocacy Program

Please RSVP to Katie Clabby at kclabby@ombwatch.org or (202) 234-8494

House subcommittee to consider new Form 990

Next Tuesday, the House Ways and Means Oversight Subcommittee will hold a hearing on the new Form 990 and the impact on tax-exempt organizations. The subcommittee will hear testimony from the IRS, GAO and some select nonprofits. If you're interested in weighing in, you can let the Oversight Subcommittee know your thoughts here. I'll post some thoughts next week after the hearing.

Nonprofit Law Podcast #5

Episode 5 of the Nonprofit Law Podcast is now available... this week, I cover the different flavors of nonprofits. Check out the shownotes and resources at nplawcast.com!

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Nonprofit Law Podcast featured

onPhilanthropy's media blog just featured the Nonprofit Law Podcast... welcome to one and all!

McCain's reversal of fortune

The Wall Street Journal suggests that Sen. McCain's recent fundraising troubles are related to his own campaign finance reform law. Two years ago he was the absolute front-runner in the GOP, and now he's fallen well out of that slot and his landmark legislation has been turned back in part by the Supreme Court. What a difference two years makes...

New Nonprofit Law Podcast this weekend... have a good one!

Al Gore on nonprofit disclosure

I just finished listening to the audiobook version of Al Gore's The Assault on Reason, and deeply embedded towards the end, Gore mentions how he would like to require full transparency of donors to nonprofits. I think his intentions are good... he believes that corporations (the energy industry in particular) hides behind front nonprofits, funding ballot measure campaigns with practical anonymity. Unfortunately, I think the mechanism he would choose to solve this problem ignores decades of precedent protecting donor privacy. It wasn't that long ago that civil rights groups were targeted by those opposed to their cause for donor lists... it was an intimidation game, and it almost worked until the Supreme Court declared that these lists are private.

Would philanthropic giving drop if people knew that their names would be public? Would people who ordinarily give to controversial groups back off and start giving only to "safe" charities? I wonder if Gore has considered these questions?

Nonprofit Law Podcast #4

Episode 4 of the Nonprofit Law Podcast is now available... this week's topic is public disclosure rules. Check out the shownotes and resources at nplawcast.com!

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Nonprofit paying for Gov. Schwarzenegger's travel

NPR's Marketplace has a story, based on reporting first in the L.A. Times, on a nonprofit footing the bill for Gov. Arnold Schwarzenegger's overseas travel. The California State Protocol Foundation has paid for some (reportedly) pricey travel for the governor, and due to the protections afforded to nonprofits, the donors names are protected from public (but not IRS) scrutiny.

The issue of public disclosure of charitable contributors has been popping up a lot lately... it will be interesting to see if this causes a push in Congress to change the disclosure rules for charities. If so, expect the matter to be taken up by the courts. If you're interested in learning more about public disclosure rules, check out episode #4 of the Nonprofit Law Podcast, coming out this weekend.

IRS teleconference on new Form 990

The IRS is hosting two days of teleconferences as part of its roll-out of the new Form 990. It's definitely attracting some attention, as the first day is totally booked. The remaining available slot is July 19th from 1-2 PM EDT.

If you're the point person at your nonprofit that fills out the annual tax return (aren't you lucky!), this might be of interest to you. If you're already booked during the big show, or would alternatively rather do something... anything else, I'm signing up for it and will post the scoop here.

Nonprofit Law Podcast #3

I present to you episode 3 of the Nonprofit Law Podcast... this week's topic is bylaws. Check out the shownotes at nplawcast.com!

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WRTL analysis begins: deregulation wins?

Commentary is rolling in on the WRTL decision... Rick Hassen has predicted that the corporate and union money will flood the 2008 election because of this ruling. Possible? I think so... but let's also remember that as sweeping of a ruling this is (essentially, the Court said if there's a reasonable interpretation that an ad is NOT influencing an election, it can't be regulated by BCRA... that's pretty broad), advertisements will still have to facially be about something other than elections. It's interesting that the Court ruled in a manner that went well beyond what WRTL was asking for... but that might be a bigger picture issue related to the new Court members.

Are we back to a pre-BCRA world for nonprofits who wish to advocate in and around election season? I'd argue it hasn't rolled back that far, but suffice to say that this ruling certainly reshuffles the deck in the constant struggle between our values of free speech and the right to express viewpoints (whether from corporations or not) versus our values of controlling campaign finance to limit the perception of corruption. This time, it seems, the Court has swung the pendulum back to the notion that we as a country would rather filter through the speech rather than limit the expression through campaign finance limitations.

One thing is clear. This debate has raged for over 31 years, and shows no signs of ebbing.

WRTL wins: issue ads now legal during election season

SCOTUSblog has the scoop... it was 5-4 and the dissenting Justices spoke at length (which seems to be a new thing on the Court).

Needless to say, there will be a LOT of analysis on this. I think this is a good thing in a sense, however, I think Congress needs to rethink the electioneering communications scheme to regulate what should be regulated and leave lobbying and other protected communications alone.

This is not the death of campaign finance reform... it is, however, the first time the reform legal theory has been knocked down by the Court in a while. We'll see how both sides react...

UPDATE: The Washington Post gives some additional details here.

UPDATE, Part Deux: Campaign Legal Center has posted the decision here.

Nonprofit Law Podcast #2

Episode number 2 of the Nonprofit Law Podcast was just unleashed on the Internets... this week's topic is nonprofit startup tips. It came from a listener, so please feel free to contact me and give me your ideas for future shows at nplawcast.com!

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Pressuring disclosure of donors

I just came across this story on CNN regarding the Center for Responsive Politics call for the Center for Promise and Opportunity (John Edwards' anti-poverty charity) to release its donors to prove it wasn't electioneering. Let me be the first to call for the Center for Responsive Politics, a well-respected group, to stop preening for press based on a sack full of nothing.

They have a theory... the theory is that Edwards used the Center for Promise and Opportunity to jump start his presidential run without having to form an exploratory committee subject to FEC reporting requirements. The problem is that it's simply a theory based solely on Edwards' travel to a few early primary states that ignores - it seems - the other work done by the organization that fully complies with its charitable mission. Their allegation is thinly supported, and that's being kind.

In another article, former FEC chair Scott Thomas (not generally a staunch supporter of nonprofits) told a reporter that "there's nothing wrong with the approach Edwards took - so long as he did not conduct any campaign-like activities, such as disproportionate travel to early voting states or using funds to maintain a political staff." In other words, you need a lot more to prove this charity did anything wrong.

To ask for donors based on what the Center for Responsive Politics has is pretty remarkable... and not in a good way. The law protects the identity of donors to charities for a variety of reasons. People who give to charities have, often, relied on that for a long time. The Center for Responsive Politics should respect that and find some hard evidence of misuse of charitable resources before it tries to pressure a charity in the press to hand over private information. This is a seriously slippery slope (a term I hate to use)... the next charity targeted could be yours.

Quietly waiting...

I am currently on a mini, semi-vacation in rural Virgina but managed to duck in a little coffee shop wi-fi access time to check in on Wisconsin Right to Life... looks like the next potential day for a decision is tomorrow, but it could be put off until next week. We'll see...

In the meantime, I'm hard at work (remember it's a mini, semi-vacation!) on the next episode of the Nonprofit Law Podcast... I hope to get it up by Friday.

The new Form 990

The Chronicle of Philanthropy has a great article that breaks down the brand new, ink-still-wet Form 990. The highlights:

• Lots of new schedules following a 10 page "core" form that all groups fill out
• Supplemental compensation information for the highly-paid executives of nonprofits (>$150k)
• A narative section for the most significant accomplishment for the year
• A new schedule devoted to fundraising

There's a lot more... check out the Chronicle's article for the summary.

This is not the final form... the IRS is taking comments through September 14. If you're interested in checking out the draft, or in making comments go to the IRS draft 990 site and fire away. I'm still digesting the proposed changes... clearly the new form asks for more information, and I'm unsure what the practical utility is for some of these adds.

One last note... the proposed form will not go into effect until the 2008 tax year, so none of this really hits until 2009. Seems like it's far away, but it will be here before you know it!

WRTL: Has Justice Alito shown his hand?

The Washington Post reports today that Justice Alito gave a speech warning about the threats to free speech to the National Italian American Foundation.

That sound you hear is the speculation machine in DC going to 11.

If Justice Alito sides with WRTL on the free speech side (as opposed to the campaign finance reform side of the FEC), that would most likely represent the reversing vote for the provision of McCain-Feingold that stops nonprofits from engaging in certain types of grassroots lobbying communications near elections. Remember Alito replaced O'Connor and she voted to support the general principle (for lack of a better term) of this portion McCain-Feingold a few years back.

I've long felt that this part of the law (the "electioneering communications" provision) was created with the best of intentions, but simply carved out more legitimate nonpartisan, nonpolitical speech than the Constitution allows. Unlike many of the people that I agree with on this issue, I am definitely not a supporter of election deregulation. Should the Court toss this out to the recycling bin, I hope there's a middle path to ensure election advertisements can be properly regulated while protecting the lobbying voices of nonprofit groups.

Nonprofit Law Podcast #1

Episode number 1 is up... just a lay of the land this week. Please feel free to contact me and give me your show ideas at nplawcast.com!

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WRTL update

SCOTUSblog and Rick Hassen report no ruling from the Supreme Court on everyone's favorite campaign finance case.... maybe next week.

Nonprofits should be interested in this if they engage in grassroots lobbying activity using broadcast ads... most don't, quite frankly. Still, it's an interesting view into what direction this Court is headed when it comes to the balance between advocacy rights and the need to regulate campaign finance.

New forms on the way

The IRS is about ready to unveil some new forms for nonprofits to fill out as a part of their annual reporting... no news yet on what they look like, but that's only fueling the speculation as to whether the new forms will be helpful or more of the same.

Back from New Orleans after a great weekend with the Waterkeeper Alliance. I gave a presentation on effective grassroots lobbying on Saturday and had a nice chance to meet some of the new programs' Keepers. I expect to do a segment on grassroots lobbying issues on a future edition of the Nonprofit Law Podcast, so stay tuned. Speaking of the podcast, I'll be posting episode #1 sometime this week...

Countdown to WRTL

The Supreme Court is probably with a few weeks of releasing its holding in Wisconsin Right to Life... the Green Bay Press-Gazette has this story in advance. I mentioned the case in the latest Capital Caucus... the newest members of the Court may have to abandon their own stated principles of stare decisis in order to reverse aspects of McConnell and find for WRTL. It shall be interesting...

Waterkeeper Alliance conference

I'll be speaking this week at the Waterkeeper Alliance annual conference in New Orleans... the topic is the laws of grassroots lobbying for 501(c)(3)s. I hope to post the first edition of the Nonprofit Law Podcast while I am down there, but I expect blogging to be a bit on the light side.

IRS releases guidance on election activity

It's not my birthday, but the IRS just handed out a gift... precedential guidance on what 501(c)(3)s can do around election time.

Updating a fact sheet released early last year, the new Revenue Ruling covers a host of topics near and dear to charities that engage in advocacy around election time. Remember it's illegal for a charity to do anything that remotely supports or opposes a candidate for public office. Nonpartisan activities, however, are permissible (like voter guides, public debates, get-out-the vote drives, etc.). Charities can also engage in issue advocacy and general education activities so long as they do not connote support or opposition to any candidates. Individuals involved in charities are still free to engage in partisan activities on their own time, using their own resources, so long as the 501(c)(3) is not tapped for assistance.

I'll be covering some of the issues raised in the Revenue Ruling in one of the first few episodes of the Nonprofit Law Podcast. In the meantime, check out the Revenue Ruling here (PDF).

Introducing the Nonprofit Law Podcast

Coming in June 2007... the Nonprofit Law Podcast.

Beware of IRS emails

Some malevolent beast out there is giving the IRS a bad name.... Ok, a worse name (although I think the IRS is cute as a button, quite frankly). CNN reports:

The Internal Revenue Service is warning businesses across the country of two new and potentially devastating e-mail scams which could silently take over their computer hard drives.

The e-mails contain official-looking IRS logos and information, falsely notifying the reader of IRS action against them or their company. A link for further information is actually a hot button that would secretly launch an insidious computer program. That program, known as a Trojan horse, could cause a variety of paralyzing problems as it directly accesses the hard drive.

I hasten to note... the virus almost certainly won't work on a Mac. But... be careful of IRS emails today people...

Senate: More disclosure for charities needed

A Senate committee wrote the Treasury Department a letter asking the IRS to include additional disclsoures in the Form 990 annual tax return. Specifically:

• Executive pay and perks
• Expanded questions on governance
• Expanded questions on endowments
• Related organizations and joint ventures (to determine if there are private benefits)
• The amount of money spent on fundraising

The next Form 990 may be more time-consuming to complete if all of these measures are adopted, but they certainly would give the public a better understanding of the internal workings of any given charity. The devil's in the details, however... if the IRS agrees and adds these sections in a new 990, but gives poor guidance on how one fills out the section, there could be problems. More to come on this, to be sure...

What the heck is a 509(a)?

Has your organization received a letter from a funder asking you to certify that you are not exempt under section 509(a) of the tax code? "I thought we were a 501(c)(3)!" you probably thought!

Some funders have been sending these requests out lately, all to comply with a relatively new part of federal law. For the vast majority of charities, the answer is, "no we are not a supporting organization exempt under IRC Section 509(a)." Results may vary depending on your situation, of course... check out AFJ's blog for more!

Treasury report: 1.6 million US charities

A new report from the Inspector General of the Treasury reveals that the IRS does a bad job at policing connections between terrorist groups and the (few) U.S. charities that support them. This is kind of old news... what I found interesting was that we finally have some updated stats on how many charities there are in the US. According to the Chicago Tribune,

The report said that in fiscal year 2006 there were about 1.6 million tax-exempt organizations, excluding churches, with $2.4 trillion in assets and $1.2 trillion in annual revenue. In tax year 2003, the latest year figures were available, these organizations filed about 300,000 returns subject to review for possible terrorist connections.

1.6 million charities and $2.4 trillion in assets... no wonder my client's app with the IRS is taking forever to process!

Humor: SCOTUS rules, "It Depends"

From The Onion... complete with a WRTL reference:

WASHINGTON, DC—In a landmark 8-1 decision, an uncharacteristically subdued Supreme Court ruled "it depends" in the case of Panetti v. Quarterman, leaving the issue of executing the mentally ill completely open-ended.

The entirely indeterminate ruling is a first for the high court.

* * *

A lot of these cases are really hard, and it's comforting to know that we now have a little wiggle room," said Justice John Paul Stevens, the oldest and longest-serving current member of the high court. "Take Wisconsin Right to Life, Inc. v. Federal Election Commission. Maybe issue ads should be able to run less than 60 days before a public official is up for reelection, if the issue is important enough. Maybe the official should be forced to comment on the matter so his constituents know where he stands. 'It depends' would work really well in that case.

Nonprofits and MySpace

Alliance for Justice's Nonprofit Advocacy Blog covers an interesting topic this week... 501(c)(3) MySpace pages and partisan comments. Their advice is right on... make sure that your nonprofit is paying attention to the people and organizations it "friends" (I love how MySpace has changed a noun to a verb!) and set your privacy settings so someone can approve all comments. A stray electioneering comment could place your organization's tax status at risk!

501(c)(3) newsletters

A recent complaint filed against an Oregon nonprofit highlights an issue that pops up every few years... can a 501(c)(3) organization include a candidate in its newsletter?

The answer is... as it always seems to be in the wonderful world of tax law... "it depends." If the candidate is given the opportunity to stump for his or her candidacy in the pages of the newsletter, it's far more likely that the IRS will consider the 501(c)(3) to be engaged in illegal electioneering. However, it is possible that a 501(c)(3) can run a column by a person who is running for office if the newsletter focuses on issues and does not mention the person's candidacy. This is a classic example of the "facts and circumstances" analysis that the IRS uses to look at election-time activity of charities... there are very few bright line rules. When in doubt, talk with a lawyer who knows the rules!

Donor Advised Funds comments

Alliance for Justice recently submitted comments to the Treasury Department asking for "clarity on the definition of expenditure responsibility for donor advised funds-specifically, that it not include the restriction on use of funds for lobbying and voter engagement activities that apply to private foundations." Check out AFJ's comments here (PDF).

U.S. Blogging Laws

Blogs are an important tool used by many nonprofits... if you're blogging, here's a great resource on blogger law from Aviva Directory... hat tip to Politics and Technology for the pointer. Topics covered include:

* Whether to Disclose Paid Posts
* Is Deep Linking Legal?
* The Legal Use of Images and Thumbnails
* Laws that Protect You From Stolen Content
* Domain Name Trademark Issues
* Handling Private Data About Your Readers
* Who Owns User-Developed Content and Can You Delete It
* The Duty to Monitor Your Blog Comments, and Liability
* Basic Tax Law Issues in Blogging
* Limited Liability Laws and Incorporating
* Spam Laws and Which Unsolicited Emails are Legal
* Are Bloggers Protected from Journalism Shield Laws

Stanford Nonprofit Law Clinic

Stanford Law School announced an exciting development today:

Stanford Law School today announced that it has appointed Jay A. Mitchell as lecturer in law and director of its new Nonprofit and General Counsel Clinic. The clinic will provide students opportunities to engage in public interest lawyering through business and transaction work with nonprofits and small enterprises.

Chalk up as yet another "I wish they had this when I was in law school" moment. This clinic will be a great opportunity for any budding lawyer to get real world experience before he or she hits the "real world."

New Study: Foundations Support of Nonprofit Overhead Costs

The Aspen Institute and the Center on Philanthropy at Indiana University released an interesting study on foundation support of nonprofit overhead costs. The study finds that foundations may support these costs more than conventional wisdom suggests, but that doesn't seem to translate to preceptions on the nonprofit side.

A new study by the IU Center on Philanthropy shows that 69 percent of foundations support nonprofits' overhead expenses, while nearly two-thirds of nonprofits surveyed say they lack funding for overhead costs. Twenty-eight percent of nonprofits reporting inadequate overhead said the cause was external pressure to keep expenses low.

Read more on the study here.

IRS redesigning Form 990

This has been threatened promised for a few years now... the Wall Street Journal reports on the latest here.

Portland bound

I will be in Portland for the week so blogging may be lighter than normal... I'm hoping to connect with some of my colleagues in the nonprofit community this week, so I might find some interesting news on what's happening on the left coast.

political activity guidance coming from the IRS

Alliance for Justice's nonprofit advocacy blog posted a blurb from BNA Money & Politics:

"The Exempt Organizations Division in the Internal Revenue Service is planning to issue precedential guidance on what constitutes political activity, based on a fact sheet the service published in February, [said] Judith Kindell, Internal Revenue Service tax law specialist in the Exempt Organizations Division."

Good news... the IRS is often stingy in handing out precedential guidance on important issues like the line between political activity and non-political activity. This helps nonprofits immensely as we head into the heart of the '08 election cycle.

Can a merger boost your nonprofit?

With more and more charities applying for recognition every day, an interesting trend out of the grantmaking world is the encouragement of collaborative work and even mergers. This makes a lot of sense on the macro level... why have multiple organizations doing the exact same work, only to spend a portion out of each group on non-programming needs like overhead and administrative costs? If these costs are centralized or shared, there should be more money available for program work. Now, the devil's in the details... sometimes collaborative work loses efficiency because there are too many decision-makers, so the gains in merged efforts are (sometimes) lost. Still, it's an interesting trend. Check out today's Poughkeepsie Journal for an interesting article on the trend in upstate NY.

WRTL: The day after reporting

Check out the NY Times and Washington Post. It's a bad sign for the supporters of the electioneering communications provision when both papers report that the Justices appeared "skeptical." Of course, basing any prediction on the line of questioning at oral arguments is often a fool's errand. I belive I lost a (friendly) wager or two on McConnell that way...

MORE COVERAGE:

Slate
Los Angeles Times
Houston Chronicle
San Francisco Chronicle/AP
ABCNews

Initial reports on WRTL

Rick Hassen posts his thoughts here. He is live as this post goes up at the Cato event.

UPDATE... Allison Hayward weighs in (from another perspective) here. The Cato event will likely be podcast in the future... I'll post the link on the blog when it's live.

Switching servers

Things might get a little whacky here at the blog over the course of the next 24-48 hours. I think I may have chosen the wrong time to change servers with the WRTL this morning... hopefully the transition will go smoothly and things will return to normal sooner rather than later.

WRTL oral arguments tomorrow

If you really want to drill in and check out the briefs before the Court, they are all posted here. I am going to attempt to get into the hearing, but the word is that there are a fair number of lawyers who want to sit in on the arguments, and the seats may fill up quickly. We shall see... there is also an event at Cato afterwards featuring Jim Bopp, the attorney for WRTL and election law blogger Rick Hassen, amongst others. Details for that here... the event will be streamed live on the Internet, so check it out!

Conflicts of interest

I just got a call on a subject I deal with fairly frequently with nonprofits... activities that are absolutely legal, but appear problematic due to a potential appearance of a conflict of interest. I frequently suggest that nonprofits adopt clear conflict of interest policies to ensure that they always can point to procedures and guidelines to avoid even the appearance of a conflict. Check out the Council on Foundations excellent guide on the topic here (PDF).

Everson to Red Cross

IRS Commissioner Mark Everson is poised to take over the Red Cross according to the Washington Post. No word on potential replacements for the head job at the IRS... whether that will impact nonprofits is unclear. Everson's tenure included a fair amount of attention paid to shady tax shelters, so it's not inconceivable that a new Commissioner may have an impact. Too be continued...

SCOTUS showing its hand?

Rick Hassen had an interesting thought regarding the Supreme Court's decision to uphold a late term aboriton statute in relation to how it might handle the Wisconsin Right to Life case:

More significantly, the case shows that the new Roberts Court, despite claims of modesty, is not afraid to overturn precedent even if there are significant reliance interests involved. I've filed an amicus brief with Richard Briffault giving the Court a modest way to decide WRTL II, but I've also written that supporters of campaign finance regulation should be very afraid of this case specifically and of the Roberts' Courts approach to the campaign finance cases more generally. As Marty Lederman observes as well, Justice O'Connor's departure means cases like McConnell v. FEC are subject to being overruled---as early as this term.

It does appear that the Chief Justice may not be as shy to toss stare desis out the window for selected cases, despite his confirmation hearing testimony. It remains to be seen if this extends to WRTL II or not. I'm planning on attending the oral arguments next week... it's generally difficult to guage most Justices' opinions based on their questions, but I will be paying close attention to the Chief Justice and Justice Alito for this one.

IRS treasure hunt

Some of my tax-exempt attorney colleagues were "tasked" by fellow attorney John Pomeranz to uncover a long-lost IRS letter regarding permissible activity by charitable organizations around political conventions. It seems that a 1980 letter to Independent Sector has been cited by a variety of publications, but is not available in any of the traditional databases. For instance, Alliance for Justice's The Rules of the Game cites the letter, stating that a charity can work to get its positions in a party platform by:

• delivering the testimony to both parties’ platform committees,
• including a disclaimer in both oral and written testimony that the testimony is being offered for educational purposes only, and
• reporting the testimony and any responses in its regularly scheduled newsletter to members.

The letter is no longer lost... thanks to the stellar files of Holly Schadler, we are lucky enough to (finally) have access to this letter again. And just to serve as a redundant conduit of access to it, I'm posting the letter here (PDF). It's not the most important IRS ruling on charitable activities around elections... just the hardest to find. Well, at least it used to be.

Stay Exempt

The IRS has recently put out a new website called Stay Exempt... it's an online training website that "provides the tools and knowledge to help you keep your organization’s exempt status intact. It consists of five interactive courses, which you can take individually and in any order."
It also comes with an amusing cast of characters... coach, a "brilliant, straight-talking IRS agent"... and Vernon a retired volunteer (that's him on the left). Best part... they talk. Check it out... stayexempt.org.

To be honest, this is so campy I think I like it. When I get some time, I'll review the content in a future blog post...

SF Examiner: BCRA a failure

The SF Examiner is not a fan of BCRA... check out today's editorial.

The rise of the (c)s?

The Campaign Finance Institute has released a report on nonprofits as we enter the '08 election cycle. CFI concludes that 527s are likely to remain important in the next election, but that there seems to be a shift towards taxable entities and 501(c)s running "issue" campaigns with "strong electoral overtones." Donors to 527s, the report concludes, are starting to look to 501(c)s as an alternative place to put their money to influence elections.

One person's issue campaign is another's electioneering... this ongoing dialogue is a major part of the issues before the Supreme Court on the 25th in Wisconsin Right to Life...

Donating lists

Usually, I get the question... "can we donate our organizational list to candidate X?" The answer is generally no, depending on the candidate or the type of nonprofit. If the organization is a charity it may even violate two or more laws! Over at the politics and technology blog, the question was asked in reverse... "can we give our candidate's list to our favorite organization?" Check it out... the advice may surprise you!

The long wait

When I first prepared an Form 1023 to get the IRS to recognize the organization's 501(c)(3) status, I was shocked at how long the process took. Back then, I had a response, following a supplemental information request (a fancy way of saying "hey, we need to know more about you before we ok this application.") within six months.

Ten years later, I really long for those good old days of lightning fast IRS response.

These days you're lucky to even hear back from the IRS at all within six months. As of this moment, the IRS is processing October 2006 applications! As charities have become more and more popular, the IRS seems less prepared to handle the crush. As a result, many organizations that had grand fundraising and operational plans sit and wait for the paperwork to percolate through the system. There are, of course, other options for these groups, including fiscal sponsorship and volunteer activity. I'll post more about these options in the future.

Word to the wise... when forming your charity, be prepared for a long wait.

BCRA turns 5

Today marks the fifth anniversary of the passage of BCRA... it is being celebrated and mourned simultaneously, depending on one's point of view. It bears noting that the Supreme Court will be hearing oral arguments in Wisconsin Right to Life in a few weeks. I'm planning on heading down to the Court to hear the arguments. I was speaking with a friend from San Francisco last night and realized that this will be the first time I will be at a SCOTUS oral argument run by someone other that Chief Justice Rehnquist... it should be interesting to see how differently Chief Justice Roberts runs the show.

IRS cracks down on charity cheats

CNN has the story... this is more of an issue for your donors, but its important to be aware that the IRS is turning its attention to abusive claims of charitable deductions...

What's next for campaign finance reform?

Bob Bauer posts on the future of campaign finance reform without Marty Meehan (D-MA) at the helm. Meehan is set to retire from Congress in a few months. Without his co-sponsor, what's next for Chris Shays (R-CT)? Well, after a major scare in the 2006 election at least he doesn't have to worry about facing hockey legend Mike Richter in 2008 anymore...

Impact of web ads

The L.A. Times has an article today regarding the now well-traveled anti-Clinton 1984 parody ad that hit YouTube several weeks ago. One thing that seems to be of issue lately is the fact that federal election law largely leaves these ads alone. This ad was produced - from what we can tell - by an individual unaffiliated with the Obama campaign. Assuming this is accurate, and there is no coordination, the law categorizes this now very effective ad as free speech with no reporting or limits whatsoever.

Many suggest that there should be disclosures involved with these ads. In the article, Rick Hassen notes that the low cost of these types of ads removes the interest in requiring disclosures. I agree wholeheartedly with that... producing these types of ads are now so incredibly cheap that the actual expenditure might only be a few dollars. Consider that the ad in question likely was produced on a home computer using iMovie, or some other type of inexpensive video editor. The clips are free, and uploading to YouTube for distribution is free. How much of a quid pro quo could there be (from a corruption standpoint) for an ad expenditure that was only a few bucks? This begs the question... would the required consitutional basis for overcoming a First Amendment challenge to regulate these types of ads need to rely on the impact of the ads rather than the cost? Clearly this ad has had great impact... but there are (I'd wager) hundreds of other ads floating on YouTube that have had no impact whatsoever. Should their creators also disclose their identity, or does it not matter since their impact has been closer to zero? What are the metrics on this? Rick suggests in the article that disclosure is important to weigh credibility... I'm not sure that is a sufficiently compelling interest for First Amendment purposes.

Lots of questions remain... as always in the realm of campaign finance, the answers may be a bit elusive.

UPDATE: Slight correction above... I'm reminded that disclosure requirements are subject to exacting scrutiny, as opposed to strict scrutiny under McIntyre v. Ohio Elections Comm'n. Still a tall mountain to climb for anyone that would propose disclosure requirements for these types of ads.

Nonprofits: good apples

My former colleague Liz Towne at Alliance for Justice wrote an excellent letter published in today's Washington Post. A recent rule change at the OPM drops the 25% administration cost cap to qualify for charity programs run by the feds. This is a good idea... frankly, as Liz notes in her letter, setting an arbitrary administrative cost percentage that suggests one type of charity is efficient and another is not is a poor method to measure effectiveness. There are a host of other factors that contribute to efficiency and efficacy, including the size of the organization and the services it provides. There are better ways to measure these things, and administrative costs should be a part, not the sole method to make the determination.

Check out the letter here.

Internet ads... back to the future?

We mentioned this pro-Obama, anti-Clinton ad that borrows heavily from Apple's famed 1984 ad on the latest Capital Caucus. I'm sure that's the reason why it's made the print media and Rick Hassen's blog. Or not...

It's interesting to see the viral explosion of a cleverly created advertisement... how this will be regulated in the future - and my guess is that it will be - is open to some debate. For now in federal elections, the Internet is pretty much wide open unless there's a paid advertisement involved.

The big announcement

Beginning today, I am embarking on a new path...

Tim-Mooney.com is now the hub for two ventures... the first is a solo law practice focusing on nonprofit organizations, and the other is an expansion of my podcast and technical consulting services. I am incredibly excited that I am now able to devote equal time to my two passions, and I am doubly excited that I will be tapping into the same entrprenurial spirit that began my career.

Look for changes to the site in the very near future... new content... new focus... it's exciting and invigorating. If you are interested in chatting with me about either of these ventures, feel free to email me at tim(at)tim-mooney(dot)com.

blog news and what made my day

Exciting changes coming to tim-mooney.com blog readers! After a little off-line feedback, I've come to the conclusion that I am literally the only person in the country that simultaneously cares about federal election law and podcasting. I know... giant shock. Consequently, I'll be splitting the blog into two within the next few weeks. One will focus on podcasting and tech, and the other will focus on political law. More to come on that... the relaunch will be part of another exciting announcement I'll be making next week.

Now... what made my day today? The FEC just announced it's making their Advisory Opinion database searchable in a way that actually enters the 21st century... details here in the well-titled post, "Christmas comes early for election lawyers."

good governance

The IRS has been prolific lately... take a look at this interesting release (PDF) outlining good governance suggestions for nonprofits.

527 reform

527s are on the mind of Sens. McCain and Feingold once again. The 527 Reform Act of 2007 would regulate a 527 under the FECA if it spends more than $1,000 on public communications that promote, support, attack, or oppose a candidate, or on voter registration and GOTV. Sen. Feingold stated on the Senate floor that no 501(c) organizations are targeted... only 527s. Observers will recall that the last time this was attempted, many interpreted the reach to include some 501(c)s, which prompted pushback and the ultimate demise of the bill. Read more about the bill here.

Nonprofits are big business

A new report released by the Urban Institute (PDF) details just how big the nonprofit sector has become. Philanthropy Journal reports:

Over 1.4 million nonprofits, including public charities, foundations and other tax-exempt groups like trade associations and labor unions, were registered with the IRS in 2004 and accounted for 5.2 percent of gross domestic product and 8.3 percent of wages and salaries paid in the U.S., says The Nonprofit Sector in Brief.

Nonprofits overall accounted for $1.4 trillion in revenue and $3 trillion in assets in 2004, says the report, which features highlights from the Nonprofit Almanac 2007 that will be published soon by the National Center for Charitable Statistics at the Urban Institute.

shameless self promotion

I rarely bring up what I do for the day job, but I'll make an exception when a quote of mine makes it into the VoteLaw blog (via the Tulsa World). My Google rank just went up a notch... look out other Tim Mooney's... you're about to be passed!

(Thankfully, I'm really not lame enough to be serious on the last point.)

Changes for small 501(c)(3)s

Not sure if this has been on anyone's radar in the 501(c)(3) community, but it popped up for me recently in my role as a director for the Tranquil Space Foundation. It's a very new public charity that will not likely have more than $25,000 in gross receipts for this tax year. Previously, that meant the charity did not have to file a Form 990 return with the IRS. However, the Pension Protection Act of 2006 made some changes starting in 2008. The IRS says:

Beginning in 2008, exempt organizations with gross receipts under $25,000 must file an annual notice.*

*Information on how to comply with these provisions will be available on this site soon.

First, define "soon" and second, what kind of annual notice will that be? A 990? Some kind of a "990-EZ"?

This is a pretty big deal since small charities previously avoided the paperwork hassles (and they can only be described that way) of filling out a Form 990. Now, we at the Tranquil Space Foundation fully expected to be pulling in gross receipts larger than $25,000 by then, so this doesn't really change our plans. However, for small community groups and other 501(c)(3)s that benefitted from this exception... sharpen your pencils... you'll be filling out a 990 of some kind for FY2008.

More on 527s

The judge in Shays v. FEC has ordered both parties to brief whether or not the latest E & J (that's "explanation and justification" for those of you playing the home edition) from the FEC was enough to avoid having to draft new 527/political committee rules. Shays and the gang want new rules, while the FEC thinks the E & J should be enough. Briefing is to be completed by May 31, so expect a decision sometime in... let's see... two, carry the one... sometime in 2012. (Just kidding, Judge Sullivan.) The judge is actually quite committed to resolve this sooner rather than later so the campaign finance community will have a clearer idea on how 527s will be treated for '08. If you're a lucky BNA Money & Politics subscriber, check out the details here.

McCain and soft money

Sen. McCain has called today's Washington Post article a "hit job." The revelations that the finance co-chair of his campaign has raised millions of additional dollars for an independent 527 effort seems to fly in the face of the "evasion" arguments we hear so much from the dedicated campaign finance reform movement in DC. Should a person who has been dedicated to eradicating soft money be this closely aligned with a financer of soft money that will almost assuredly aid his presidential ambitions? (rehtorical question... blogger's privilege) It's too soon to tell if this will be a big deal or not. Needless to say, there is nothing illegal about this activity, but we shall see if there is additional political fallout. The straight talk express is hitting some early potholes, it seems...

WRTL press release

Check out Jim Bopp's statements regarding his client, WRTL here. As I posted earlier, he'll be arguing before the Court on April 25th.

Oral arguments set

I couldn't resist checking the blogs before I got on my plane back to frigid DC (Puerto Rico was 80s all week, than you very much!). SCOTUS has set the WRTL oral argument for April 25th according to the Court's website. (Hat tip... Rick Hassen's election law blog)