Friday, March 22, 2024

SAFE SPACE Challenges Constitutionality of 501(c)(3) Political Activity Restrictions

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Hang on to your campaign hats and buttons. A Louisiana nonprofit group known as Students and Academics for Free Expression, Speech, and Political Action in Campus Education, Inc. (SAFE SPACE) filed a 7428 petition this week seeking to vindicate an asserted right to engage in campaign intervention and substantial lobbying as a 501(c)(3) organization.  This is gonna be a summary judgment case one way or the other.  And either way, its likely to get to the Supremes.  Here is the gist of the complaint:

3. In its exemption application, SAFE SPACE acknowledged that it will engage in candidate endorsements and “substantial” lobbying activities in contravention of section 501(c)(3)’s political speech and lobbying restrictions because these activities are critical to its charitable and educational mission. See 26 U.S.C. § 501(c)(3) (“no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office”).

4.  SAFE SPACE’s expression of informed and educational views on candidates and legislation in furtherance of its mission should not be silenced. A law that prohibits a nonprofit from “creating a Web site telling the public to vote for a Presidential candidate in light of that candidate’s defense of free speech” is a “classic example[] of censorship” in violation of the First Amendment. Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 337 (2010). This is precisely what section 501(c)(3)’s political speech and lobbying restrictions do: muzzle the voices of nonprofits on the most pressing political questions of the day. The unconstitutionality of section 501(c)(3)’s political speech and lobbing restrictions is even more apparent with respect to SAFE SPACE because the low- to no-cost of SAFE SPACE’s political speech and lobbying activities means the government, simply by recognizing SAFE SPACE’s tax exemption, could never be viewed as subsidizing those activities. Section 501(c)(3)’s political speech and lobbying restrictions are therefore not only facially unconstitutional, but also unconstitutional as applied to SAFE SPACE.

5.  The IRS has failed to issue any determination on SAFE SPACE’s application for over 270 days, thereby constructively denying the application. SAFE SPACE accordingly petitions this Court for a declaratory judgment recognizing its qualification as a tax-exempt organization described under section 501(c)(3).

. . . 

25. SAFE SPACE plans to support candidates in political campaigns, regardless of party affiliation, because the ability to endorse candidates furthers SAFE SPACE’s educational and charitable purposes. SAFE SPACE’s support will be limited to endorsing candidates for local, state, and federal offices who pledge commitment to SAFE SPACE’s Free Speech Principles by publishing their names (and offices sought) on a “Candidate Endorsements” page of its pre-existing website and in its pre-existing newsletter, which may also be archived on its website. The cost to SAFE SPACE of endorsing candidates and publishing its endorsements will be zero.

26. SAFE SPACE plans to attempt to influence legislation in furtherance of SAFE SPACE’s educational and charitable purposes. Specifically, when the opportunity arises for legislative action to improve the environment for free speech, or to prevent violation of free speech rights, SAFE SPACE intends to engage in a substantial amount of legislative advocacy by promoting bills that advance its Free Speech Principles, advocating for appropriate amendments to the bills, and encouraging legislators to pass the bills. Because a large part of SAFE SPACE’s non-lobbying activity will be accomplished at little or no expense to the organization, its lobbying expenses will compose a substantial portion of its overall expenses in years when SAFE SPACE is engaged in lobbying. SAFE SPACE will only engage in substantial lobbying activities that further its educational and charitable purposes. SAFE SPACE’s non-lobbying activities will always constitute a majority of its total expenditures.

27. SAFE SPACE will not be able to engage in its endorsement and lobbying activities unless it is permitted to do so as 501(c)(3) organization. It is not feasible for SAFE SPACE to establish separate section 501(c)(4) or section 527 organizations to engage in these activities. SAFE SPACE is a new, small non-profit organization, and all of its fundraising activity needs to be directed towards supporting its section 501(c)(3) organization. SAFE SPACE cannot afford to divert resources to separate section 501(c)(4) or section 527 organizations. In addition, SAFE SPACE will engage in lobbying and endorsement activities on an intermittent basis—for example, when relevant legislation is being considered—and establishing, operating, and fundraising for separate entities that engage in such intermittent advocacy is not practical. Establishing and operating section 501(c)(4) and section 527 organizations also would impose significant administrative burdens, such as by requiring the maintenance of separate bank accounts, additional reporting obligations like filing multiple tax returns, and safeguards to ensure that the activities of the sections 501(c)(3), 501(c)(4), and 527 organizations remain separate. For a small organization like SAFE SPACE, these administrative burdens are insurmountable.

darryll k. jones

https://lawprofessors.typepad.com/nonprofit/2024/03/safe-space-sues-for-declaratory-judgment-overturning-political-restrictions-in-501c3.html

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