Nonprofit Scalawags: The Democrats Fail (Again)

Gervais S. Bridges, whose Barbecue and Politics is, whether or not you agree with his politics, an invaluable source of the best of South Carolina's "two messiest things." He's got a great post up over there about certain pro-school voucher organizations, all of whom share a Gervais street address. He also has some links to their IRS Form 990's, the tax return that nearly every non-profit must fill out annually.

And that brings up the question: can non-profits engage in lobbying? The short answer is yes, under certain carefully prescibed conditions. Generally, non-profits have to stay under 20% of their total budget in lobbying and grassroots advocacy efforts. But, as Gervais notes, some of the school voucher organizations are little more than front groups for the efforts of large, out-of-state constituents to influence the debate around school choice in South Carolina. And, in at least one case he cites, they appear to be way above the IRS limits.

The U.S. Senate Finance Committee, under Republican Chuck Grassley, seemed pretty intent on curbing abuses by“nonprofits that may be used for political purposes.” Unfortunately, the current Democratic leadership seems far more concerned with not taking a stand on the war in Iraq. According to the Nonprofit and Foundation Advocacy Blog:

"[Independent Sector President] Diana Aviv does not believe Democrats will go after tax-exempt organizations the way Republicans did while in control of Congress. Large-scale reform of charities and foundations 'is not a priority' of the new Democratic majority." The Democrats are trying to show how much they care about the non-profit sector, which often serves the poor and disenfranchised. That's too bad, because the non-profit sector has more than its share of scalawags, carpet-baggers and thieves.

Now, most of the people who labor long hours for little pay in community based and faith-based organizations do so because they are trying to improve their communities and the lives of the people they serve. But the laws and their enforcement around non-profit activity (including lobbying) have been abused for too long, by too many people. It gives all of us who work in nonprofits a bad name.

Chuck Grassley was making progress on this issue. When are the Democrats going to join him?