Thursday, December 6, 2007

Role of Nonprofit 501(c)(4)'s in Presidential Campaign is on the Rise

On December 5, 2007, The Washington Post pubished an article about the rising influence of nonprofit 501(c)(4)'s on the current campaign for U.S. President.  The article explains the differences between 501(c)(4)'s and other campaign-affecting organizations like 527's.  Here is an excerpt from the article:

The nonprofit groups, known by the designation 501(c)(4) because of the tax code section that applies to them, have been around for decades. They have long been a force influencing Congress and state legislatures. Conservatives have extensively used them over the past decade to help gain support during debates over legislation.

This year, these nonprofits have already started to encroach on turf that has been dominated by political parties, political action committees and, in the past few elections, by independent political groups created under section 527 of the IRS code. The latter groups spent $685 million in 2004 trying to influence voters with everything from antiwar messages against President Bush to ads sponsored by a group of Swift Boat veterans that questioned the heroism of Democratic presidential nominee John F. Kerry.

The 501(c)(4) groups pay no taxes on the donations they collect, but -- unlike charities -- their donors do not get a tax deduction. They are allowed to make political endorsements and engage in other political activities as long as political action is not their primary purpose.

For the full story, see "Nonprofits Become a Force in Primaries: Use For Donations Is Under Scrutiny" in the December 5, 2007, edition of The Washington Post.

DAB

http://lawprofessors.typepad.com/nonprofit/2007/12/role-of-nonprof.html

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