Political 501(c)(4)s Outspend Super PACs


June 18, 2012; Source: Open Secrets Blog

This isn’t good news for the nonprofit sector. The Center for Responsive Politics and the Center for Public Integrity report that the spending of super PACs in the 2010 election was big, but super PAC spending was less than that of 501(c)(4) social welfare organizations. The (c)(4)s outspent super PACs by three to two, $95 million to $65 million.

Obviously, (c)(4)s don’t have to reveal their donors, a practice that 90 percent of these groups followed for the $84 million they spent; another $8 million came from groups that partially disclosed their donors’ identities. Super PACs, in contrast, are mandated to disclose their donors, though in some cases, they might be revealing donations from (c)(4)s. The two centers report that the bulk of (c)(4) spending was from conservative groups, who spent $78 million, compared to $16 million spent by liberal groups.

If you’ve been reading NPQ regularly, you already know that (c)(4)s can spend a bunch of their money on electioneering ads so long as that isn’t their primary purpose, which most groups translate into a benchmark of spending no more than 50 percent on partisan election work.  However, our feeling is that many (c)(4)s are doing so little social welfare activity that the concept that they deserve their social welfare organization status is laughable. We also agree with Rep. Chris Van Hollen (D-Md.) and others who say that the Federal Elections Commission misinterpreted or circumvented the McCain-Feingold campaign finance reform legislation when it exempted (c)(4)s from disclosure of donors financing their political activities.

Here is the other problem: if the headline is “nonprofits outspent super PACs in 2010,” the public might think this is referring to political spending by 501(c)(3) public charities, the category of groups that most people think of when they see “nonprofit.” Of course, denizens of Capitol Hill know the difference between (c)(3)s and (c)(4)s, but the general public? Without knowledge of the distinction between (c)(3)s and (c)(4)s, it’s not hard to imagine an increasing cynicism among general public observers who might wonder what public charities are doing involved in partisan electioneering activities. In an era of public distrust of the electoral process, don’t you think that stories about the electioneering activities of (c)(4)s chips away at the credibility of 501(c)(3)s?—Rick Cohen

  • lee mason

    To me the issue highlights the need for 501 c(3) organizations to educate the public on voter engagement and electoral distinctions for the nonprofit community. Post Citizens United the public is already suspicious of money in our electoral process. 501c(4)’s should be engaged in what is being called first amendment right to engage in our electoral process, it’s also necessary for 501c(3) organizations to now stand up and engage in more voter engagement and education.

  • VnV

    The conservative fear engine will stop at nothing. I hope the general public will be properly informed so that charities doing work for the less fortunate will not be wounded.

  • Arulraj Louis

    It is the need of the hour to clearly explain to the general public that Non-profit do not engage in political activities. There are so much work to be done for the non-profits (501 (3) (c), in the field of health, HIV/AIDS and development of women and child, especially in parts of US and under developed and developing countries. If few non-profit unwittingly engage in political activities the credibility of all the non-profits would be put at stake.

  • David

    Look – the answer to your question invites bias and opining that may only serve to muddle the issue. If you agree with the message – my guess is that one would say no. If you see it as an “attack” on your side – “sure, it’s wrong.” Note the “conservative fear engine” quote below.

    My opinion – these groups hire bright, highly skilled and highly paid lawyers to be sure they “color in the lines” If there is wrong doing or extension beyond that allowed by law, then time and courts will tell. Additionally, if the debate becomes about freedom of speech, then I decidedly come down on the side of any individual and organization to speak to issues and express themselves.

  • Judy Frankel

    I’m running a 501c(4) and it is truly for the social welfare. It’s called Writeindependent.org. The other 501c(4)’s could be giving my organization a bad rep, but mine works the OPPOSITE of most other 501c(4)’s in that its purpose is to level the playing field for candidates. Unlike other non-profits under this category, ours is trying to remove the corrosive influence of money in politics. I can’t think of anything that works in the public’s interest as greatly as that.

  • Frank Jenkins

    This article is a waste of space, I wish I could sue to recoup the one minute of life I wasted reading it. If you’d like to defend the integrity of 501(c)(3)s, and you’re concerned that the public may not understand the distinction between (c)(3)s and (c)(4)s, at least devote a paragraph to outlining the distinction … for crying out loud.