Daily Digest 12/29/11

• State Senator aims to double lobby fee in California -- to 14 cents a day [San Jose Mercury News] 

Daily Digest 12/20/11

• FEC Republicans' statement on Merkley ads highlights unanimous vote on coordination [BNA] (subscription required)

Daily Digest 12/16/11

• FEC deadlocks on disclosure rulemaking, backs NPRM to ax spending restrictions [BNA] (subscription required)

Daily Digest 12/15/11

• Senate Democrats introduce legislation to toughen penalties for suppressing votes [BNA] (subscription required)
  
  
• FEC set to try again to advance new rules implementing Court's Citizens United ruling [BNA] (subscription required)

Daily Digest 12/14/11

• 58 donors responsible for 80% of SuperPAC funding
  [Boing Boing]
  
  
• Can Occupy overturn Citizens United [Huffington Post]
  
  
• Federal court finds Wisconsin campaign finance law unconstitutional [The Daily Cardinal]

Daily Digest 12/9/11

• A Nobel victory for no-strings-attached grants [Chronicle of Philanthropy]
  
  
• To predict unemployment rates, look at civic engagement levels [Nonprofit Quarterly]

IRS Form 990: Did You Know?

As 2011 winds down, it’s the perfect time to review your financial documents and make sure you’re in compliance with IRS disclosure regulations for 501(c)(3)s and 501(c)(4)s.

Under IRS rules, generally you are required to make the following documents (and copies, if requested) available for viewing by the public:

• Your application for tax exemption (IRS Form 1023/Form 1024), including all attachments, any supporting documents, and any correspondence from the IRS concerning your application.
• Your Form 990 or Form 990-PF (annual tax return) including attachments and schedules, for the past three years.
• Your Form 990-T, Exempt Organization Business Income Tax Return for the past three years.  This must also include any attachments, schedules, and supporting documentation, including documents that relate to the imposition of tax.

You are only required to provide the exact documentation named in any requests.  For example, if someone asks for your “2002 tax return”, you must provide your 2002 Form 990, including schedules and attachments, but no tax-exempt applications or returns for prior years.  If the request is for your “annual return” and no year is given, you must send the 990s, schedules, and attachments for the last three years.  If your organization is a public charity or 501(c)(4), you may omit the names and addresses in Schedule B of your annual return.  Private foundations, however, are not allowed to omit the names and addresses of contributors.

Your IRS Determination Letter is also subject to public viewing.

Not only should your organization have copies of these documents available for the public, you should have a procedure in place to handle all public inquiries.

In-person requests must be fulfilled on the same day.  As a result, it would be beneficial to have copies of disclosable documents on hand.  For written requests, you must respond within 30 days of receipt.

For more information on public disclosure and IRS rules for charitable organizations, download a copy of our free brochure, Give Me Your 990!  Public Disclosure Requirements for Tax-Exempt Organizations. You can also receive free technical assistance by sending us a question, or calling (866)NPLOBBY.

Daily Digest 12/8/11

• Constitutional amendment proposal takes aim at corporate political spending [BNA] (subscription required)
  
  
• GOP nonprofit backs electoral college [Roll Call]

Daily Digest 12/7/11

• Liberal groups take up Occupy mantle in D.C. [Roll Call]
  
  
• Los Angeles City Council responds to Citizens United
  [Lobby Comply Blog]

Alliance of Justice in the News

Alliance for Justice's own Abby Levine discusses electoral restrictions on tax-exempt charitable organizations in this New York Times piece.

Charitable organizations like the Intrepid foundation usually steer clear of such political activity for fear of jeopardizing their federal income tax exemption. On its Web site, the Internal Revenue Service says that contributions to political campaign funds “clearly violate the prohibition against political activity.”

One test of whether that rule has been violated is “whether the board chairman was inviting people to an event in his role as chairman of the board,” said Abby Levine, legal director for advocacy programs at the Alliance for Justice in Washington. Ms. Levine, who advises charitable organizations on how to comply with federal tax laws, was not familiar with the Intrepid case, but she said she discouraged tax-exempt organizations from using their lists of employees or trustees for communications involving political campaigns.

Click here to read the full article online.

Daily Digest 12/6/11

• More states passing disclosure laws in response to Citizens United ruling [BNA] (subscription required)

Policy Responses in the wake of Citizens United

On January 21, 2010, the United States Supreme Court dramatically altered the campaign finance laws when it issued a 5-4 decision in Citizens United v. FEC.  While the Court’s decision did not remove the prohibition on corporate campaign contributions to candidates, the decision does allow for business and nonprofit corporations and unions to make independent expenditures out of their general treasuries.   The ruling has already had a significant effect on elections, as expenditures from corporate-funded outside groups have risen dramatically.  As a result, there have been numerous efforts to mitigate the decision’s effect.

Currently there are several proposed constitutional amendments in both the House of Representatives and the Senate.   For example, Rep. Donna Edwards and Rep. John Conyers have sponsored a resolution for a constitutional amendment giving Congress and the states the specific authority to regulate corporate expenditures on political activity.  There’s a similar amendment resolution in the Senate sponsored by Senator Tom Udall.   In addition to the legislative calls for a constitutional amendment, organizations such as Public Citizen, Free Speech for People, and Business for Democracy have asked the public to sign petitions urging Congress to push for a constitutional amendment declaring that corporations are not people and that states and Congress should have the right to regulate expenditures on political activity.  

In addition to the various proposed constitutional amendments, another effort to mitigate the impact of corporate spending is to change the public financing system to encourage more small donations by more people.  On April 6, 2011, Senator Dick Durbin reintroduced The Fair Elections Now Act.  The provisions of this bill require that candidates raise a large number of small contributions from their communities in order to qualify for Fair Elections funding.   House candidates would have to collect 1,500 contributions from citizens of their sate and raise $50,000 in order to qualify for Fair Elections funding.  For Senate candidates to qualify for funding, they would need to raise a set amount of small contributions, amounting to a total of 10% of the primary Fair Elections funding.

On the state level, 16 states have enacted legislation in response to Citizens United.  Many of the state legislative responses require more disclosure by donors to organizations that make independent expenditures and ban government contractors from making expenditures on statewide races.   In Iowa, for example, laws requiring corporate-sponsored ads to include an approval message from the CEO were passed.  Colorado’s legislature now prohibits bans on campaign contributions from government contractors and bars foreign money in their state’s elections.  These are just a few examples of state legislative action intended to reduce the influence of corporate money in politics.

Alliance for Justice is continuing to monitor these activities at the state and national level, and will keep you informed of developments that affect nonprofits.

- Isaiah Castilla

Alliance for Justice and Northern California Grantmakers to Present 'Funding Progressive Groups'

"On December 6th NCG and Alliance for Justice will present Funding Progressive Groups: Managing the Risk, a program designed for funders and social justice organizations to help them manage “sting” operations, attacks on their organization, and the potential media firestorms that follow.

To give members a better understanding of the upcoming program’s content, NCG interviewed Alliance for Justice’s Senior Counsel Nayantara Mehta."

Read NCG's interview with Alliance for Justice's Nayantara Mehta here:
http://www.ncglists.org/news/?p=3582

Daily Digest 12/1/11

Wide Response to Educational Plight of Mexican Immigrants [New York Times] How an electoral tweak is throwing California lobbyists into disarray [KALW News] The rise of the Geek Lobby [Slate]