Charitable Nonprofits and Politics
The U.S. Supreme Court’s expansive 2010 decision in Citizens United v. Federal Election Commission represents a new and enormously controversial chapter in the longstanding debate on the funding of political campaigns by business corporations, advocacy organizations and unions. But what does this decision mean for charities? The Internal Revenue Code forbids charities—as opposed to other entities in corporate form---from “participat[ion] in, or interven[tion], …in any political campaign on behalf of (or in opposition to) any candidate for public office.” With well over 1.5 million charities in the U.S., including major health care organizations, universities with multi-billion dollar endowments, and private foundations with billions of dollars available for grants, charities are an indisputably significant sector of our economy and policy making apparatus. The consequences for a charity that steps over the line can be deadly: loss of Federal tax exemption and loss of charitable contribution deductibility for donors.
Designed as a basic introduction to the intersection of Federal election law and tax law governing charities, this seminar will review the relevant aspects of Federal tax law and Federal election law along with the rules regarding electoral politics as applied to the other types of organizations noted above. We will explore detours around the tax law restrictions that charities have developed over the years and the reactions to these “work arounds” by the Internal Revenue Service, the courts and other constituencies. Course readings will include key Federal and U.S. Supreme Court cases that since the early 1970’s have defined the constitutionally permitted limits of political engagement as well as Internal Revenue Service rulings and guidance. As a class we will examine the pros and cons of the limitations on charities, both from a tax policy and Constitutional perspective. This analysis will help us frame an understanding of the debates that are beginning to flow from the Citizens United decision. The seminar will have a final paper rather than an exam.
Does this course satisfy the writing requirement? Yes
Required Materials: will be posted online.
Grading: The course grade will be divided 40% for class participation, including attendance, and 60% for the final paper.