IRS Scrutinizes Hollywood Conservatives’ Nonprofit Organization

Abe

January 23, 2014; New York Times

Conservatives in Hollywood are considered by many to be the exception rather than the rule, but they do exist. A group of approximately 1,500 have associated under the name “Friends of Abe” (referring to Abraham Lincoln) for almost a decade. Prominent members include actors Gary Sinise, Jon Voight, and Kelsey Grammer. Jeremy Boreing, executive director, states that the organization “has no political agenda” and that its purpose is “to create fellowship among like-minded individuals.”

Two years ago, Friends of Abe applied for tax exemption as a public charity under Section 501(c)(3) of the Internal Revenue Code. The Times article notes that Friends of Abe is similar in nature to the liberal People for the American Way Foundation, founded by television producer Norman Lear, and several other charities founded to promote liberal causes and led by entertainment industry figures.

The IRS has not yet decided on Friends of Abe, however. It has sent multiple requests for supplemental information to the organization, including a request for access to private areas of the nonprofit’s website, which included a membership roster. The IRS is also asking whether speeches and presentations by conservative politicians and political figures constitute impermissible political activity by a charity. Generally, 501(c)(3) regulations that “no substantial part” of a public charity’s activities may be political, and in no case may a 501(c)(3) engage in partisan campaign activity to support or oppose specific candidates. For example, a charity may hold a candidate forum, but all candidates must be invited and given an equal opportunity to participate in the forum.

Is the IRS’s two-year (and still ongoing) process of reviewing Friends of Abe appropriate, or is it continuing evidence of the singling out of groups with politically conservative leanings for special scrutiny? Does having and promoting “fellowship of like-minded individuals” disqualify a nonprofit group from 501(c)(3) recognition, regardless of the purpose and activities of the group?

This story reminds us that the IRS’s issues with conservative groups persist, and that they’re bigger and broader than 501(c)(4) “social welfare” organizations.—Michael Wyland

About

Michael Wyland

Michael L. Wyland, CSL, has more than thirty years of experience in corporate and government public policy, management, and administration. An expert on nonprofit governance and public policy issues, he has been featured and quoted extensively in media including The Wall Street Journal, The New York Times, CNN, Fox News, Washington Post, The Chronicle of Philanthropy, and The Nonprofit Quarterly. He currently serves as an editorial advisory board member and contributor to The Nonprofit Quarterly, with more than 100 articles published since 2012. Michael is a partner in the consulting firm of Sumption & Wyland. Founded in 1990, the firm provides board governance consulting, public speaking and training, and executive coaching to nonprofit organizations. Sumption & Wyland has assisted more than 200 nonprofits with strategic planning services from pre-retreat research to staff-level implementation assistance and effectiveness monitoring. Speaking topics include board-CEO partnerships, nonprofit executive transition issues, and overviews of the nonprofit sector of the US economy. Michael was born in Washington, DC and raised in the Northern Virginia suburbs. Prior to co-founding Sumption & Wyland, Michael managed the computer operations for an independent oil & gas investor in Dallas, Texas and served as a staff assistant to a U.S. Representative. During his college years, he spent one summer working at the US Department of Labor and one summer working at the US Department of Justice. His past volunteer service includes various leadership positions at the local, state, and national level with the Young Republicans. He has been the secretary and president of a condominium homeowners association and the treasurer of a professional association serving computing professionals. He served as a Trustee and Vice President of Sertoma Foundation, and has been elected president of his local Sertoma club twice. In 2014, Michael was elected Chair of the South Dakota Commission for National and Community Service (Serve SD), on which he has served since its founding in 2011. He is currently working as a senior advisor to establish a national charity dedicated to the elimination of prejudice, expanding the scope and reach of the 120-year old Pi Lamba Phi fraternal organization. Michael's writing for NPQ often addresses healthcare policy and governance, scandals involving nonprofits, and the governance and policy implications of nonprofit stories in the news. He was widely quoted and cited for his work analyzing the governance issues related to the Jerry Sandusky/Penn State/Second Mile scandal in 2011. More recently, he has written more than 30 pieces for NPQ relating to the IRS scandal. In addition, he presented a paper at the national 2014 ARNOVA Conference about the IRS scandal and its implications for regulation of political activity by nonprofit organizations. Michael lives in Sioux Falls, SD with his wife, Margaret Sumption, and their dog. They have one adult son. In his leisure time, he likes to read histories and biographies, play golf, cook, and be a companion to his wife.

  • Patrick Taylor

    There are three things worrying about this whole IRS scandal.

    1 – While they were also targeting progressive groups, it appears they applied much greater scrutiny to conservative groups. Regardless of your politics, you should be worried that the government is targeting groups in opposition to the administration.
    2. The IRS doesn’t seem to know what it is doing. The investigation into the targeting has revealed a department that doesn’t even know what its own rules are.
    3. There is a lot of inappropriate political activity happening at the c3 and c4 level, and this scandal has obfuscated that.

  • Ron Vassallo

    The consistency of these actions is worrisome but the predictable DoJ “no foul” response compounds an obvious problem. As much as I shudder at proposing this action, it may be time for the appointment of an independent counsel to investigate whether the IRS is being wielded as a political billy club. We can’t continue to see all our civil liberties revoked without a sense of outrage.

  • Michael Wyland

    Patrick:

    I agree with much of what you’ve said.

    1) The TIGTA’s report in May, 2013 documented that the targeting was indeed pointed at conservative groups. His analysis of the cases indicated that the liberal groups included in the scrutinized applications were more accidental than intentional. This is supported by the IRS’s internal labelling of the scrutiny as being the “Tea Party cases.”

    2) This may well be true. Pending investigations may help determine who acted willfully and who acted out of ignorance. I’ve written two NPQ newswires documenting the IRS’s declining institutional capacity – one based on another TIGTA report and the other based on statements made by Marcus Owens at a forum in DC a few months ago.

    3) There is both proper and improper political activity happening with 501(c)3, 501(c)4, 501(c)5 and 501(c)6 organizations. While some – intentionally or not – have obfuscated that point, especially by an overemphasis on the 501(c)4 aspect, the TIGTA must be given proper credit for keeping the focus on all four classifications. One difficulty in implementing regulatory changes is that any changes will affect existing nonprofits of all political persuasions.

  • Michael Wyland

    Update 3/17/2014:

    The IRS has approved the Form 1023 application for tax-exemption made by “Friends of Abe” as a 501(c)(3) public charity. See:

    IRS Grants Non-Profit Status to Hollywood Conservative Group Friends of Abe
    http://variety.com/2014/biz/news/irs-grants-non-profit-status-to-hollywood-conservative-group-friends-of-abe-1201135576/