The GuideStar Blog retired September 9, 2019. We invite you to visit its replacement, the Candid Blog. You’re also welcome to browse or search the GuideStar Blog archives. Onward!

GuideStar Blog

How do we think about political nonprofits?

Editor’s note: Lee Drutman is a visiting fellow at GuideStar. Lee has a Ph.D. in political science from the University of California, Berkeley and studies lobbying and money and politics. Formerly, he was a senior fellow at the Sunlight Foundation.

Political nonprofits (nonprofit organizations that devote resources to influencing public policy, either directly through lobbying, or indirectly through participating in public policy discourse, by participating in elections, or both) have come under increasing public scrutiny in the last few years. Both the IRS Tea Party scandal and the increasing role of 501c4 organizations in campaigns have raised questions about the status of political nonprofits and their role in our politics. There here has also been a noted increase in the number of organizations seeking 501c3 and 501c4 status, while at the same time, the IRS’s staff capacity for evaluating applications has declined.

While the vast majority of nonprofits still have very little to do with electoral politics and adhere closely to their charitable missions, a growing politicization of nonprofits has raised important questions about their role in our democracy and could, if not addressed thoughtfully, threaten the legitimacy of all nonprofits.

Here at GuideStar, I’m undertaking a new project to learn more about the scope and activities of political nonprofits. I’ll be focusing on the two primary ways that nonprofit organizations are playing an increasingly important role in modern politics: (1) facilitating the flow of campaign finance and (2) informing and even structuring political discourse.

Campaign finance

The first thing we do know is that political nonprofits have become an increasingly big deal in campaign finance. Our friends at the Center for Responsive Politics have done some great work in tracking the flows of money, and their latest count is that $50 million has been spent already by 501c4 organizations in the 2014 election, with projected spending to be about 10 times as much as we head into the official campaign season. This spending is considered to be “dark money” because it is subject to only the most minimal disclosure requirements.

When it comes to campaigns, there are considerable obstacles to following the money when it goes through nonprofits. When political spending is done by 501c4 nonprofit organizations, that spending is not subject to the same disclosure requirements as other political spending. While political committees that register with the Federal Election Commission (FEC) (including superPACs) have to disclose their donors’ identities and publish regular reports on their political expenditures, 501c4 organizations never have to reveal their donors, and their political spending only needs to be disclosed to the FEC in the immediate lead-up to an election.

We hope to get a better handle on 501c4 political spending by looking more closely at 990 forms. For example: How much money are they really spending on politics? What are the funding and personnel networks directing the spending of these organizations? And can we better understand where the money is actually coming from?

Policy discourse

We can estimate that tens of billions of dollars goes to fund the countless thousands of nonprofits that aim to influence public policy more directly by shaping our political discourse, from the smallest shoestring groups of volunteers to inside-the-Beltway powerhouses whose annual budgets are in the tens of millions of dollars.

Many of these groups provide genuine ways for citizens to aggregate their political concerns. Others are of more dubious provenance. For example, it is not uncommon for a narrow corporate interest to seek legitimacy and widespread support for its position by using a trade association (c6), funding a manufactured grassroots organization (c3 or c4), supporting think tank and academic research (c3), and building a coalition of nonprofit groups. Modern influence campaigns increasingly operate outside the traditional boundaries of campaign finance and direct lobbying disclosure, passing through variegated institutional forms (largely nonprofits) to create the illusion of widespread support and overwhelm the intellectual environment.

Our basic thinking is that political discourse could be improved if it were easier to distinguish the provenance of both policy and political claims: Which “constituent” opinion represents a widespread concern, which exists only because somebody with a vested interest paid for it. And which opinion is altogether bogus, the product of a Potemkin organization with no actual members? Which reports and analyses are produced independently using rigorous scientific methods, and which would only exist if they were paid for by somebody to come to a pre-specified conclusion?

We are also interested in political organizations from the perspective of citizens and potential donors. If you want your dollar to translate into advocacy on the causes in which you believe, which organizations will actually do that for you? And which organizations are just a post office box that will happily take your money?

We also want to preserve the legitimacy of the nonprofit form generally. We hope that by calling attention to political front groups that abuse the tax advantages, we can by comparison boost the legitimacy of nonprofits that serve genuine clients and communities.

One possible outcome of this work is that we could get much better at measuring the size of the political nonprofit economy. We know how much money these organizations spend on direct lobbying, but we don’t know how much they spend on the more diffuse efforts to shape the broader political discourse through their writing and research, their coalition building, their grassroots mobilization efforts, and the many other ways in which they attempt to tilt outcomes.

Yet this work faces fundamental questions: how do we systematically determine which nonprofits are political and which are not political? How can we reliably assess their relative legitimacy and authenticity? How can we accurately measure the money spent on different sides of different issues, and what those resources actually translate into?

These are exciting but very hard questions, and I’ll be wrestling with them in the weeks ahead. This will inevitably be a collaborative effort. My mind right now is an open brainstorm, so if you’ve got thoughts and ideas, please use the comments section, or send your thoughts directly to me at lee.drutman@guidestar.org

Topics: Senior Executive Issues