Friday, January 22, 2010

Chemerinsky on the Citizens United Decision

Our colleague, Erwin Chemerinsky, wrote a blistering opinion piece in today's Los Angeles Times in which he describes the Citizens United decision as a "stunning example of judicial activism" that demonstrates that judicial and political conservatives' rhetoric about restraint is "laughable" and "nonsense."  Says Chemerinsky, "conservative justices are happy to be activists when it serves their ideological agenda."  He points out that the Court's conservative majority has been all too happy to limit freedom of speech for others, including government employees and students, but now has departed from clear precedent in order to expand freedom of speech for corporations.


January 22, 2010 | Permalink | Comments (0) | TrackBack (0)

Experts Agree: Haiti Needs Money, Not Used Shoes

An article in yesterday's New York Times reports that aid experts and government officials are having some success in getting the word out to the compassionate donating public that what Haiti needs -- or, more specifically, what the organizations working to help Haiti need -- is money, not in-kind donations.  The article recounts several darkly humorous anecdotes about victims of past disasters receiving boxes of high heeled shoes or French tv dinners that required cooking in microwave ovens.  An interesting twist is that the public seems to be getting the message this time, largely because the word is being put out through the internet,Twitter, Facebook, and other social media.


January 22, 2010 | Permalink | Comments (0) | TrackBack (0)

Citizens United (Part II)

Following up on the post yesterday, here are some initial thoughts on the Supreme Court's decision in Citizens United v. FEC, especially with respect to nonprofits.  If you want to read the decision but have trouble accessing it on the Supreme Court's 2009 term opinions page (as I did this morning), here is an alternate site for the opinion courtesy of the Election Law Blog.  That blog also has extensive coverage of reactions to the opinion.  Finally, the reaction of my constitutional law colleague Rick Garnett is available in this news release (along with a brief set of comments from me).

In this case, Citizens United, a section 501(c)(4) nonprofit corporation, challenged the prohibition on corporations paying for express advocacy and electioneering communications.  In a not unexpected by nevertheless dramatic shift, the closely divided Court (5-4) overruled its previous decision, Austin v. Michigan Chamber of Commerce upholding that prohibition, and declared the prohibition to be unconstitutional. The immediate effect of the decision is that corporations, for-profit and nonprofit, are now free to spend unlimited amounts supporting or opposing federal candidates, as long as they do so independently of candidates and political parties. The almost certain implications of the decision are that corporations are now free to spend unlimited amounts supporting or opposing state and local candidates as well because any parallel state law prohibitions are also unconstitutional, and that labors unions are also now free to spend unlimited amounts supporting or opposing candidates at all levels of government. The only silver lining for supporters of campaign finance reform is that the Court upheld by a 8 to 1 vote, with Justice Thomas the only dissenter, the related disclosure provisions that require groups that pay for certain election-related ads to identify themselves and their significant donors publicly.

By reversing a 20-year old precedent and overturning a law that has been on the books for over 60 years, the Supreme Court has opened the floodgates for corporations, both for-profit and nonprofit, and unions to spend unlimited amounts on elections. This decision will further the shift in electoral power away from the political parties, which still face sharp limits on their ability to raise funds for elections, to 527s and other independent groups that now can receive unlimited amounts of corporate and union money. The decision does not mean we will suddenly see lots of candidate ads paid for directly by big corporations such as GE or Microsoft. Given that the disclosure provisions survived, such corporations will not want to risk alienating a large portion of their customers and shareholders. They will rather either pay for such ads indirectly or fund other election-related activities not covered by the disclosure provisions, primarily through increased payments to tax-exempt nonprofit organizations such as the U.S. Chamber of Commerce and trade associations. We can therefore expect to see many more ads from such groups, and from labor unions and nonprofit advocacy organizations, in this year’s elections.

The Citizens United decision does not immediately threaten the longstanding federal tax law limits on section 501(c)(3) organizations engaging in electioneering. This result flows from the fact that the Supreme Court’s previous decision in Regan v. Taxation with Representation upholding speech limits on section 501(c)(3) organizations was not disturbed, and section 501(c)(3) organizations still can easily created affiliated section 501(c)(4) organizations that can engage in electioneering as the reasoning in that decision appears to have required.  Nevertheless, the strong affirmation by the Supreme Court that corporate speech enjoys First Amendment protection as much as individual speech means that the IRS will have to continue to be very careful when enforcing these limits to ensure it does not tread on the free speech rights guaranteed by that amendment.



January 22, 2010 in Federal – Judicial | Permalink | Comments (2) | TrackBack (0)

Thursday, January 21, 2010

Citizens United

The Supreme Court today handed down its decision in the Citizens United case, striking down restrictions on political contributions and spending by corporations and labor unions. Campaign finance is not my area, and I am confident that others will chime in on the meaning and long term import of the decision once they have had a chance to dissect it.  In the meantime, blogs, including those of the Wall Street Journal and the Atlantic are beginning to report the reactions of various citizens' groups and commentators.


January 21, 2010 | Permalink | Comments (0) | TrackBack (0)

More on Nonprofit Newspapers

I recently blogged about Robert Lang's effort to urge marginally profitable newspapers to consider re-forming as L3Cs and staying afloat, at least in part, by seeking program related investments from private foundations.  A recent interview in the Nonprofit Quarterly with Mark Jurkowitz, associate director of the Pew Research Center's Project on Excellence in Journalism, discusses the possibility that more newspapers will seek nonprofit status and try to keep their heads above water by soliciting grants and contributions.  As was true of Lang, Jerkowitz emphasizes that serious investigative journalism (as opposed to entertainment-oriented "geyser journalism") is essential to maintaining a healthy democracy, and that the old model of for-profit newspapers funded by advertising revenue is no longer viable in the internet age.  The solution, according to Jerkowitz, might be a new breed of nonprofit journalism outlets dedicated to the public purpose of careful, serious news gathering. 


January 21, 2010 | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 20, 2010

Survey on Freedom of Association in Euro-Mediterranean Region Published

The Euro-Mediterranean Human Rights Network (EMHRN) has published its third survey on Freedom of Association in that region.  The premise of the survey of the state of freedom of association in the Euro-Mediterranean region is that freedom of association constitutes a right that is absolutely essential, along with freedom of expression, to the exercise of virtually every other civil and political right, and to the advancement of economic, social and cultural rights.  The Survey reports that the period since the last EMHRN survey, in December 2008, has seen little or no improvement in the state of freedom of association in any country in the Euro-Mediterranean region, and in some respects continued deterioration of the ability to exercise this right.  In virtually every country covered, there are thousands of associations, a great many of them charitable in nature, and for the most part these organizations do not experience problems with the authorities unless they are affiliated, or suspected of being affiliated, with opposition political movements.  The hand of the government as a general rule is heaviest, in terms of legal restrictions and official harassment, when it comes to human rights organizations as well as other groups advocating for changes that can affect the exercise of political power, including the power of security services.




January 20, 2010 | Permalink | Comments (0) | TrackBack (0)

U.K. -- Ban Imposed on Muslim Group

A report in the New York Times indicates that Britain has outlawed a radical Islamic group that had incited outrage by planning a protest march through the streets of a town made famous for its somber ceremonies honoring British soldiers killed in Afghanistan.  Alan Johnson, the British home secretary, said the move criminalizing membership in the banned group, Islam4UK, was a “tough but necessary power to tackle terrorism.”  The ban, which took effect on January 14, also outlawed other names used by the organization.  Islam4UK decried Britain’s action in a statement posted to its website, saying that the prohibition of the group was “a clear case of the oppressor and tyrant blaming the oppressed.”  The organization has described itself as a platform for promoting the views of an extremist Islamic group, Al Muhajiroun, which praised the hijackers of the Sept. 11, 2001, attacks in the United States as heroes, but disbanded in 2005 in response to a British government order banning it.  Islam4UK says it has never advocated or been involved with violence.  The ban was announced one day after a court found five British Muslim men guilty of harassment and using insulting language during a protest they had staged at a separate parade welcoming British troops home from Afghanistan. The men had shouted slogans describing the soldiers as “murderers,” “rapists” and “baby killers.”




January 20, 2010 in International, Religion | Permalink | Comments (0) | TrackBack (0)

Donating by Text Message

The terrible aftermath of the earthquake in Haiti continues to dominate nonprofit news.  One interesting new twist is the sudden (at least it seems sudden to me) rise in donations by text message.  A recent New York Times article reports that, of the $35 million the Red Cross collected for Haiti disaster relief, $5 million had come through text messaging. 

This news leads a law professor to wonder about charitable solicitation licenses.  Surely the Red Cross is licensed throughout the United States, but the same might not be true of smaller international relief organizations.  Would receiving a significant number of text messages from a given jurisdiction require the organization to file for a license?  I sense a Nonprofit Law exam question coming on.


January 20, 2010 | Permalink | Comments (0) | TrackBack (0)

House Passes Legislation Allowing 2009 Charitable Contribution Deduction for Haiti Relief

The House of Representatives today unanimously passed H.R. 4462, legislation that would allow charitable contributions to victims of the earthquake in Haiti to claim an itemized charitable deduction on their 2009 tax return instead of having to wait until next year to claim these deductions on their 2010 tax return.  The legislation also includes a provision allowing those who text messaged a donation the ability to use a phone bill as proof of donation.  


The legislation, by the way,  applies only to cash donations. 




January 20, 2010 in Federal – Legislative | Permalink | Comments (0) | TrackBack (0)

Coal to Trails?

I will have to strain to make this into a nonprofit lawissue, but it involves nonprofits and it's a matter that has been brewing in my community.

The issue is universities that burn coal to meet their power needs.  According to a storyl ast week in the Chronicle of Higher Education, they are coming under increased pressure from nonprofit environmental groups such as the Sierra Club to move toward alternative energy sources.

The issue and the story jumped out at me because my own institution, The University of North Carolina at Chapel Hill, relies heavily on coal.  While Chapel Hill has agreed to work toward reducing its reliance on coal, critics are not satisfied with its commitment.

In the town of Chapel Hill, the coal burning has an ancillary effect on transportation.  To move the coal to the University power plant, there is a railroad spur that runs through the heart of town.  Bike commuters, including me, would love eventually to convert that rail spur into a bicycle commuter trail. 

So here is the plan: universities will reduce and eventually eliminate their dependence on coal, and the rail lines used to deliver that coal will be converted to bike trails. 


January 20, 2010 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 19, 2010

L3C Newspapers?

Scott Russell, who blogs for, reportsthat Robert Lang -- the zealous promoter of the L3C concept -- was recently at the University of Minnesota promoting the idea of converting for-profit newspapers (which are cutting staff and going under in droves) into L3Cs.  According to Lang, the newspapers could sell private foundations on the idea that a healthy press is essential to a healthy democracy (I seem to remember that from high school civics) and could use the L3C structure to elicit program related investments. 

A year or so in, it's not at all clear that the IRS is going to support the L3C concept, nor is it clear that hybrid social venture organizations are going to be attracted to the L3C form.


January 19, 2010 | Permalink | Comments (2) | TrackBack (0)

Interesting Take on Executive Compensation

Dan Pallotta, who blogs forthe Harvard Business Review, has an interesting take on the recent up-tick in scandals over executive compensation in the nonprofit sector.  In his post, entitled Executive Compensation, Charities, and the Curse of Proximity, he posits that investigative reporters, the IRS and the public generally ignore eye popping salaries in the nonprofit sector and are happy to let the market rule so long as the organizations those highly paid executives work for have no connection to the poor and distressed.  In contrast, the same observers and regulators are outraged when an executive whose organization serves the poor collects a private-sector-type salary.  I have no idea if it is true, but it is an intriguing observation.  Any empiricists out there want to take it on?


January 19, 2010 | Permalink | Comments (0) | TrackBack (0)