Slop jar politics*: how an advocacy non-profit has a sweet role with Metro Schools and can endorse Karl Dean

Since blogging on the Stand for Children organization's endorsement of Karl Dean for Mayor after having enjoyed their political advocacy assignment with One Nashville, I received some questions from readers on whether nonprofits are allowed to endorse candidates. Nonprofits, of course, enjoy tax-exempt status, which gives them a financial advantage in the political arena if they are allowed to lobby and influence.

If there were just one legal category of non-profits this would all be a simple matter. But there are more than one. Stand for Children is actually two distinct nonprofit organizations (or I guess you may call it one organization with two distinct faces). It is structured as both a 501(c)(3) organization and a 501(c)(4). The 501(c)(3) goes by the name "Stand for Children Leadership Center." That organization (or sub-organization?) may not legally endorse Karl Dean:

501(c)(3) nonprofit organizations cannot engage in political campaigning. Nonprofits with 501(c)(3) tax exempt status should be ever vigilant about this prohibition -- a violation could result in severe consequences.

The federal tax law is very strict on the issue of political campaigning: A 501(c)(3) organization is absolutely forbidden to directly or indirectly participate in any political campaign on behalf of (or in opposition to) any candidate for elective public office. Violation of this prohibition could lead the IRS to completely revoke your organization's tax-exempt status or impose excise taxes on your organization.

Unless one can find evidence that the Leadership Center joined in the endorsement, I'm assuming Stands for Children has not done something illegal given that the 501(c)(3) SFCLC has not endorsed Dean.

However, the 501(c)(4) organization is called simply "Stand For Children" and it bills itself as a "grassroots advocacy group." This second face of the organization is given wide latitude to influence politics and keep its tax exempt status:

More powerful bang for the buck is the 501(c)(4) organization. 501(c)(4)s can conduct unlimited lobbying and can engage in some partisan electoral activity so long as it’s not the organization’s primary purpose. Although donations to these organizations are not tax-deductible, the organizations themselves are still exempt from most federal taxes.

501(c)(4)s can provide candidate-related information to their members, endorse specific candidates, urge the election or defeat of a particular candidate, and encourage contributions to a candidate. The definition of membership is key: members include people who either pay annual dues to the organization or have a significant attachment to the organization, such as the right to participate in the organization’s governance. However, a 501(c)(4) can (and should) announce its endorsements to the press – an effective way of letting a wider public know of its support. Although the organization can’t coordinate its endorsement with a campaign, the campaign may independently publicize the organization’s support. Influential 501(c)(4)s that have name recognition with the public should use this tactic to amplify their power to motivate voters.

So, while it may seem to those of us not lawyers or judges a distinction without a difference, as long as their leadership center is not endorsing Karl Dean, SFC can endorse Karl Dean. It may look butt-ugly to laypeople wondering how SFC found their way so far up into Metro's halls of influence in the first place, but it ain't illegal.

Recognize any names on SFC Board?

And we're not the first to raise the question, "Who the hell is Stand for Children anyway?" Progressives take note: a matter of months ago warning lights went off after Stand for Children traipsed into Illinois an unknown entity, dropped a bunch of money and propounded that student achievement be bound to tests and that teacher tenure follow suit. They also discouraged teacher strikes. Those are priorities consistent with Chambers of Commerce agendas, too. It is no wonder that they partner with Nashville Chamber's One Nashville, and we should all be vigilant about the kind of "advocacy" they eventually push and whether it is representative of PTOs or of CEOs.

It is also no wonder why they endorsed Karl Dean. It seems more about muscle than motivation.

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*A slop jar is the jar used to retrieve used water from a wash basin in the absence of plumbing. I tend to use the term "slop jar politics" when it seems politicians have washed their hands of government services and turned the leavings over to non-profits, which also has the effect of generating a loyal constituency in the non-profit's network and increasing the size of the political machine.

HT: Thanks to those who supplied some of the info for this post. You know who you are.