Political Activity by Nonprofits in Spotlight
This weekend we were treated to two stories, which detail recent "political abuses" by nonprofit organizations. The Washington Post's A01 story on Sunday, Nonprofit Groups Funneled Money For Abramoff, focuses on exactly how Jack Abramoff used tax-exempt groups to move around his clients' money, while The National Journal's Friday cover story, Charitable Chicanery, also looks at Abramoff and then other "scandal-plagued politicians" such as former Republican House Members Duke Cunningham and Tom DeLay and Democratic Representative Alan Mollohan.
The NJ article includes this sobering warning: "Indeed, many campaign finance and legal experts see politically active charities as the next big scandal waiting to happen. While controversy has swirled around so-called "527" groups -- the political organizations that enjoy tax-free status under Section 527 of the Internal Revenue Code -- political abuses by other types of nonprofits, particularly 501(c)(3) charitable groups, have gone largely unnoticed." Luckily, the article's author was kind enough to point out "three big danger zones... for charities that flex their muscles politically," including: voter-registration and -mobilization activities, grassroots advocacy and the use and abuse of 501(c)(3) groups by members of Congress.
As I've previously discussed, this area is ripe for legislative and/or regulatory action. Earlier this month, for example, Senate Finance Committee Chairman Chuck Grassley sent letters to IRS officials seeking comment and in some cases stepped-up enforcement" in several tax-exempt areas. One of Chairman Grassley's main concerns: "nonprofits that may be used for political purposes such as those tied to then-lobbyist Jack Abramoff."
The NJ article includes this sobering warning: "Indeed, many campaign finance and legal experts see politically active charities as the next big scandal waiting to happen. While controversy has swirled around so-called "527" groups -- the political organizations that enjoy tax-free status under Section 527 of the Internal Revenue Code -- political abuses by other types of nonprofits, particularly 501(c)(3) charitable groups, have gone largely unnoticed." Luckily, the article's author was kind enough to point out "three big danger zones... for charities that flex their muscles politically," including: voter-registration and -mobilization activities, grassroots advocacy and the use and abuse of 501(c)(3) groups by members of Congress.
As I've previously discussed, this area is ripe for legislative and/or regulatory action. Earlier this month, for example, Senate Finance Committee Chairman Chuck Grassley sent letters to IRS officials seeking comment and in some cases stepped-up enforcement" in several tax-exempt areas. One of Chairman Grassley's main concerns: "nonprofits that may be used for political purposes such as those tied to then-lobbyist Jack Abramoff."
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