[4-1-04]

Thanks to the Presbyterian Washington Office for this information.

The Office of Management and Budget (OMB) has shared the following information. --

The Federal Election Commission (FEC) has proposed new regulations that could subject nonpartisan issue advocacy and voter mobilization efforts to restrictions meant for campaigns and other partisan groups. These include a ban on corporate contributions (including foundations and unions) and added reporting and disclosure requirements. The rule could take effect in June or July, and apply retroactively. Churches (including the Washington Offices of the denominations) are 501(c) 3's.

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See below to take action.

HOW IMPORTANT IS THIS ISSUE?

At least one FEC Commissioner has called for extending the new rules to 501(c) organizations. This would put serious constraints on issue advocacy and nonpartisan voter mobilization activities since groups would have to report to the FEC in addition to the IRS. The FEC reporting would require that issue advocacy be paid for with regulated contributions (i.e., "hard" money from individuals only, with a $5000 ceiling) and that donors be disclosed.

The FEC proposed rule is not as clear as the statement of the FEC Commissioner. The proposed rule is written as a series of questions rather than providing a proposed plan. As a result, it is not completely clear whether the FEC is proposing restrictions on 501(c)(3) groups.

But even if the FEC rule does not directly regulate 501(c)(3) groups, there is the additional "slippery slope" concern. If the FEC proposal is aimed only at 527 groups, some 501(c)(3) groups may say that's okay. However, the public does not discern between different types of nonprofits, such as 527 and 501(c)(3) groups. Thus, if certain types of communications or behavior of 527s are regulated, then it is quite possible down the road there will be calls for doing the same with 501(c)(3) and 501(c)(4) groups. Even the calls for uniformly regulating behavior (which has already been suggested by legislators) could have a chilling impact on 501(c)(3) legitimate advocacy activities.

Because this slippery slope situation could have an impact on 501(c)(3) groups, we urge groups to get involved in this issue now.

WHO IS TAKING WHAT POSITION?

This is a tough issue for groups, such as OMB Watch, that support efforts to address the corrosive influence of money in politics. Several leaders of campaign finance reform, such as Common Cause and Public Citizen, have spoken out against an earlier effort this year by the FEC to regulate communication that does not support or oppose a federal candidate by nonprofits. Others in the campaign finance reform movement are strongly backing aggressive regulation by FEC. These groups have recently stated that their intent is not to regulate 501(c) groups "at this time". But if the principles behind the proposed rules are accepted, 501(c)(3) groups can expect to see proposals in Congress next year to impose the rules on them.

OMB Watch is persuaded by three points:

1. FEC should not be changing the rules of the game a few months before an election, potentially tilting election outcomes.
2. Congress did not specifically address the issue of regulating nonprofit groups in its recent campaign finance reform law. If 527s or 501(c)(3)s are to be regulated, Congress should address this issue and legislate on it. This should not be left to a regulatory agency.
3. Non-electioneering nonprofit speech is an essential component of a vibrant democracy -- and must be protected.

WHAT CAN YOU DO?

1. Members of Congress are being asked to send comments to the FEC telling them the rule is not what was intended in campaign finance reform legislation in 2002, and that it would be inappropriate to change the rules in the middle of an election cycle.
PLEASE ASK YOUR REPRESENTATIVE AND SENATORS TO TELL THE FEC THE PROPOSED RULE SHOULD BE REJECTED.

CLICK HERE  to send an email to your Representative or Senators - go to the Presby Legislative Action Center on the left and compose your message to your elected officials.

2. Watch for an email in the next few days with information on how to sign onto comments being drafted by the FEC Working Group.

3. Write a letter to the editor of your local paper- see Talking Points from the FEC Working Group at http://www.ombwatch.org/filemanager/fileview/56/

Details about the proposed rule are available at http://www.nonprofitadvocacy.org , a site cosponsored by the Alliance for Justice, Charity Lobbying in the Public Interest, the National Council of Nonprofit Associations, National Committee for Responsive Philanthropy and OMB Watch. These nonprofit leadership groups that deal with advocacy rights have been meeting to discuss this issue and have very similar points of view.

Please forward this email to other nonprofits that could be impacted.

Rev. Elenora Giddings Ivory
Director, Washington Office
Presbyterian Church (USA)
202-543-1126

110 Maryland Avenue, NE, Suite 104
Washington, DC 20002