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Thursday, December 13, 2012

Charity PACs and Charitable Deductions

As we discuss in the chapter on interest groups, 501(c)(3) charities may not contribute money to political campaigns.  But nothing forbids their executives and members from doing so. The Bay Citizen gives the example of Scott Staub, executive director of the Friends of the San Francisco Public Library.
Staub heads a political action committee that is attempting to increase the political clout of the nonprofit sector in federal elections. Most of the committee’s members are affiliated with charitable organizations.
“We want to be a political player in a positive way,” said Staub, chairman of the Association of Fundraising Professionals PAC, an umbrella organization for charitable fundraisers. “There are lots of interest groups, and we decided we needed to have a greater voice for philanthropy.”
The PAC was formed about a decade ago and since then has contributed $68,000 to politicians who support pro-charity causes, especially maintaining the charitable tax deduction.
Charities are prohibited from donating to political campaigns as a condition of their tax-exempt status. But their politically free cousins, PACs, do not face the same restrictions.
Robert Egger, a longtime nonprofit advocate, started a second PAC, CForward, in January. Like the fundraisers’ PAC, CForward only supports candidates who back the nonprofits’ agenda.
“Nonprofits represent the biggest unsolicited special interest group in America,” said Egger, who also runs a nonprofit community kitchen in Washington, D.C. “Most candidates are burdened by the idea that dot-com drives the economy while dot-org does good deeds.”
“The usual pattern in the U.S. is for groups to start lobbying when they feel that they are under attack,” said Bruce E. Cain, professor of political science at Stanford University. “The current climate is very volatile for nonprofits. They were hit hard by the stock market problems in 2008, and now the threat of charitable deduction limits has to be freaking them out.”
Another article in the paper explains:
They help drug addicts in the Tenderloin, feed hungry children and aid struggling public schools. They’re also big fans of tax breaks for America’s millionaires.
Bay Area nonprofits, which often advocate for some of the neediest Americans, are finding themselves the unlikely defenders of a politically unpopular stance: keeping some tax loopholes for the rich.
“It’s a paradox,” said Jan Masaoka, CEO of the California Association of Nonprofits, a coalition of more than 1,600 charities. “The nonprofit sector, which roots for the underdog, supports tax breaks to the wealthy because charitable deductions help us.”