If it were up to Robert Egger, the 2008 campaign endorsements would carry messages like "Girl Scouts Choose Hillary" or "The Cleveland Library Votes Giuliani." Well, not exactly, but what Egger, who runs a Washington, D.C., soup kitchen, does want is for nonprofit organizations to break their traditional silence in presidential politics — a silence prompted by the complex rules governing tax-exempt status. Egger points out that nonprofits employ 14 million Americans, nearly 10% of the national workforce, and hold assets of $1.76 trillion. "We've got to organize," Egger urges, "take our seat at the table and be heard."
Egger is not the only nonprofit leader using next year's early primaries to thrust his agenda into the national spotlight. Bill Gates, whose foundation is the world's largest philanthropy, last month called on presidential contenders to commit to expanding the President's Malaria Initiative, a $1.2 billion effort started by President Bush in 2005 to cut malaria deaths by 50% in 15 African nations. "I hope you will join us in asking all of the candidates to make this pledge and keep the fight against malaria on the national agenda," Gates wrote in an October 19 blog post. The Gates Foundation, along with the Broad Foundation, had also previously announced plans to spend $60 million on "Ed in '08," a project designed to make improving education a top priority of the 2008 presidential race.
Even when backed by the largesse of Bill Gates, the nonprofits' influence in Iowa or New Hampshire pales in comparison to more established interest groups such as unions and the ethanol lobby. Still, some groups made small inroads in 2004. A grassroots campaign led by the Global AIDS Alliance in Iowa convinced all nine Democratic candidates to publicly pledge to double President Bush's commitment to global HIV/AIDS and provide $30 billion to fight AIDS by 2008. Senator John Kerry and six others also agreed to a pledge sponsored by the American Arts Alliance, a national advocate for performing arts, to articulate a policy on support for the arts.
This time around, New Hampshire nonprofit leaders are learning the art of bird-dogging. One, Cynthia Mills, CEO of the Manchester-based Tree Care Industry Association, has met 11 candidates at house parties and town hall meetings, peppering them with questions on how they envision a future partnership with the nonprofit sector. The Nonprofit Primary Project hopes to meet with all the presidential hopefuls one-on-one before the January primary, and on September 6 held its first public forum, with former Arkansas Gov. Mike Huckabee, a Republican contender.
"We're telling candidates that we're the problem solvers of our communities," Mills says. "And you can see many of them having that 'aha' moment." But Egger and his comrades are walking a tightrope. For one thing, they risk alienating the donors on whom they count on for operating funds. More significantly, they could be breaking the law. Nearly all nonprofits are set up under Section 501 (c) (3) of the IRS code, which grants them tax-exempt status if they agree to stay out of politics — only 20% of their budgets can go to political or lobbying work, which must be mostly educational in nature.
In the 2006 election cycle, the IRS warned 26 charities that they'd stepped over the line, and a further 60 are under investigation. Former House Speaker Newt Gingrich in August returned a $50,000 check to a Colorado family foundation after his policy organization determined the donation was illegal. Losing tax-exempt status could be financially devastating to smaller nonprofits. "You do have to be careful," says Ann Kuster, a lawyer advising the Nonprofit Primary Project. "Everything we undertake must be nonpartisan and include every candidate."
Section 501 groups, unlike political action committees or campaigns, are not required to publicly disclose their donors, who are permitted to make unlimited donations. And nonprofits are under little obligation to open up their books to show where those cash streams are used. California Gov. Arnold Schwarzenegger, for example, regularly relies on a Sacramento-based nonprofit, the California State Protocol Foundation, to pay for his overseas travel, including private jets. Other charities foot the bill for the $65,000-a-year hotel suite Schwarzenegger stays at when in Sacramento. And, of course, these donations are tax deductible.
"Should my tax dollars be spent on a multimillionaire's travel? Absolutely not," says Daniel Borochoff, president of charity watchdog American Institute of Philanthropy. "Wink-wink, nudge-nudge deals like this ruin the integrity of the whole sector."
Borochoff warns that if charities get involved in politics, it will invite even more scrutiny to an already heavily regulated field. But Egger says bring it on. "Nonprofits have for too long been complacent to let others tell us what we can and can't do," he says.
The sway of a more assertive nonprofit sector is already being felt in this election cycle. Democratic front-runner Hillary Clinton last month signed a pledge that commits the next President to investing $50 billion by 2013 to combat HIV. Her commitment came after the pledge's sponsor, the AIDS group ACT UP, and others threatened to target her campaign with protest action if she declined to sign on. The New Hampshire-based Nonprofit Primary Project hopes to expand its work on a national scale ahead of next November's election. Its goal will be to put collaboration with charities and foundations in each party's platform next summer, and maybe even advocating for the naming of a Secretary of Community Service at some point in the future. Egger also hopes to persuade his nonprofit peers to emulate corporate America and form a Chamber of Commerce-type umbrella group to lobby Congress. He dismisses claims the sector is too diverse to unite. "When something's bad for business, they don't dwell on their differences," Egger says. "They just band together and fight it."