A little after midnight on election night, Nate Shinagawa conceded New York State’s 23rd District congressional seat to Rep. Tom Reed (R-N.Y.). Unlike most other candidates for Congress, Shinagawa had the distinction of being one of the “nonprofit eight” who received the endorsement of CForward, the nation’s first political action committee specifically devoted to candidates friendly toward the nonprofit sector. A professional nonprofit hospital administrator, Shinagawa was as articulate about the nonprofit sector as any of the CForward candidates. In a conversation with the Nonprofit Quarterly after the election, Shinagawa reaffirmed his core Democratic positions on issues such as taxing the wealthy and eliminating subsidies for big oil companies, but he also articulated positions that clearly reflect both his position as a nonprofit executive and his nonprofit roots.
The Nonprofit Candidate
Shinagawa tells the story of his younger brother, a special needs child who wasn’t being well served in the Prop 13-fueled anti-tax fiscal environment in Shinagawa’s native California. When Shinagawa moved east, his family followed him to New York, where governmental programs and nonprofit services helped turn his life around. “Government saved my brother and saved my mother especially—my entire family,” Shinagawa says.
The fact that government accounts for one-third of nonprofit revenues—and much more in the realm of human services—is part of Shinagawa’s story. “For a lot of voters, it’s an issue where you have to connect the dots,” he says. “People love their nonprofits, people donate to the food bank or the church or local support networks, [but] a lot of these entities get support from the government. If we give more money to the rich, we are taking away from the organizations that are keeping people afloat.” He adds, “People find it very easy to attack the government—big thing, faceless, amorphous—but when I connect the dots [showing that] it affects your local church, the food bank, people are saying, ‘Whoa.’ It puts a powerful face to the agencies we have in our community. It shows a face and a human element.”
With a nonprofit lens on many public policy issues, Shinagawa talks about issues differently than other politicians. He is articulate and passionate about the implications of national health care reform, discussing the impact of the Affordable Care Act (ACA) on nonprofit health and human service organizations. He understands that, as organizations, nonprofits will be able to get help in purchasing health insurance through participating in the ACA’s health exchanges, and that, as service providers, nonprofits can look to the ACA to eliminate some of the pressures that lead to medical bankruptcies that force families to rely on social services provided by nonprofits.
On the charitable deduction, he describes proposals that might limit or cap deductions of mortgage interest payments or charitable donations as “the equivalent of raising taxes on middle class people,” because unlike the wealthy, the middle class does look to the economic boost of these deductions. Shinagawa argues against what he sees as the draconian budget cuts currently being considered in Congress, believing such cuts would harm the ability of nonprofits to function as social safety nets to “help uplift people out of poverty.” One can plainly see what made Shinagawa attractive to CForward, but why didn’t that translate to voters in New York’s 23rd Congressional District?
The Moneyed Incumbent
While Shinagawa lost, there is no question that his candidacy turned a lot of heads. He ran ahead of President Barack Obama in much of the district and came far closer than anyone would have ever thought to claiming what most thought was a “safe” Republican incumbent seat. In fact, Shinagawa believes that “a little more support from outside organizations, support from labor and from the national party at a higher level would have put us over the top” in this election. Shinagawa says that on the stump, he diverged from other candidates and “talked about overturning Citizens United…[and said] that corporations are not people.” Voters got to see “a campaign of grassroots versus corporate money,” he says, “[but] we didn’t have quite enough money to get our message out there.”
Shinagawa’s opponent was House freshman Rep. Tom Reed (R-N.Y.). Shinagawa says that approximately 60 percent of Reed’s campaign money came from the roughly 600 PACs that donated to his campaign. Reed was certainly considered a favorite in a district with a 22 percent Republican voter registration edge. Given such political demographics, that Shinagawa captured 48 percent of the vote and lost to Reed by less than four percent is a testament to his campaign’s work. But Shinagawa, who was virtually ignored by the national Democratic Party machinery such as the Democratic Congressional Campaign Committee, was outspent three to one by Reed, a fact that can’t be ignored in the realities of running a political campaign.
Reed’s campaign pulled in $1,977,658 compared to only $709,727 for Shinagawa. Shinagawa was outraised by almost $200,000 in individual donations, raising $600,290 compared to Reed’s $788,238. Shinagawa was throttled in terms of PAC contributions, getting only $87,817 while Reed pulled in $1,068,280 from PACs. Almost all of Shinagawa’s PAC contributions were from labor unions. On the other hand, Reed pulled in many $5,000 PAC contributions from a panoply of conservative and Republican PACs, not to mention sizable donations from the PACs of Bank of America, Goldman Sachs, New York Life, Xerox, Boeing, Halliburton, PriceWaterhouseCoopers, EBay, Procter & Gamble, Hewlett Packard, Google, Wal-Mart, and Exxon Mobil.
For CForward’s future activities, Shinagawa’s campaign was a textbook of the challenge most real nonprofit candidates are likely to face in districts where their elections might really mean overturning the status quo. To our knowledge, CForward raised little money to put behind its selected candidates. To have affected Shinagawa’s campaign in financial terms was well beyond CForward’s capacity, at least in this, CForward’s first national electoral cycle.
Who’s in Each Corner?
There is no question that the political contributions of a PAC that supports nonprofit-friendly candidates will likely continue to be outmatched by big corporate money—and this doesn’t even address the purportedly non-candidate “independent” 501(c)(4) and Super PAC spending. Therein lies one of the problems/challenges for CForward or any nonprofit-focused political action committee.
Strikingly, despite Shinagawa’s profession as a nonprofit hospital administrator, the big health PACs went with Reed, including the American Medical Association PAC and the American Hospital Association PAC. Although nonprofits are a small percentage of apartment owners and managers in the U.S., the National Multi-Housing Council takes policy stands in favor of protecting the Low Income Housing Tax Credits and implementing comprehensive immigration reform, both strong nonprofit issues, but its PAC also supported Reed, not Shinagawa. Even the Fraternity and Sorority PAC, whose website features Rep. Steny Hoyer (D-Md.) lauding the PAC for its efforts to protect the values of Greek life, put money into Reed’s campaign.
Although not big money, the national nonprofit infrastructure group with its own PAC—the Association of Fundraising Professionals (AFP)—wasn’t looking toward CForward’s “nonprofit eight” for its 2012 contributions. It gave $10,500 to Congressional Democrats and $13,000 to Republicans, with the largest single contribution to the reelection campaign of Sen. Orrin Hatch (R-Utah), followed by smaller contributions to House members Rep. John Lewis (D-Ga.) and Rep. Patrick Tiberi (R-Ohio). Meanwhile, the Americans for the Arts Action Fund went 72 percent Democratic and 28 percent Republican. The PAC of the National Community Action Foundation (NCAF) also went 72 percent Democratic; they didn’t give to Shinagawa or Reed.
The above points to a second problem. Even the nominally nonprofit PACs were not contributing to Shinagawa’s election. This is because, for the most part, nonprofit PACs like AFP and NCAF look to support candidates who are (a) likely winners, and, (b) likely to be influential on the committees that are of concern to their members (thus AFP’s generosity toward Hatch, who will likely be the ranking Republican member of the Senate Finance Committee, and Lewis, who will be the ranking Democratic member on the crucial House Ways and Means Subcommittee on Oversight). If CForward is going to help its favorite candidates—those reflecting nonprofit sector values and priorities—it is going to have to influence the nonprofit-focused PACs.
The exception to the “PACs not contributing to Shinagawa” rule was Planned Parenthood, and this points to a third challenge for a nonprofit political agenda. Despite the assertion of national nonprofit leadership organizations about a nonprofit identity and agenda, many nonprofits have topic-specific agendas that override their 501(c) identities. The Center for Responsive Politics maintains a category of PACs described as “Ideological/Single-Issue” which includes groups focused on abortion policy, the environment, gun control (and a much larger opposing group of PACs supporting gun rights), human rights, and women’s issues. Like Planned Parenthood, these groups are looking for candidates to support based on their positions on specific issues, not necessarily their allegiance to a tax status or overarching nonprofit sector values.
What Lessons Might Be Brought to a Rematch?
Although he hasn’t committed, Shinagawa has dropped hints that he might be open to another run in 2014 if he can get the support of national political funders, particularly the DCCC. Judging by his against-the-odds showing in 2012, his national political career may just be taking off. If he does run again, he’ll likely continue to bring with him his nonprofit roots and values, and insights like this one: “With many nonprofits, the CEO is also the CFO and HR director. With a nonprofit agency, you truly are a problem solver. When you run a nonprofit in an era of declining revenues, you’re learning how to do more rather than less. We are well trained to take an attitude to government to get things done, to get the job done. Congress needs an attitude adjustment. They would rather fight than fix things. In an era when people are frustrated with things not getting done, management experience is a compelling story.”
CForward wasn’t the only PAC with almost no money to recognize Nate Shinagawa’s strength as a Congressional candidate. He was also recognized by the Progressive Action PAC and he received endorsements from the much better heeled People for the American Way and MoveOn. Had he won in 2012, Shinagawa would hardly have been the only pro-nonprofit member of Congress. Winning her reelection, for example, was Rep. Donna Edwards (D-Md.). A former executive director of the Arca Foundation and co-founder and executive director of the National Network to End Domestic Violence, Edwards has nonprofit credentials to match anyone, but, in the opposite scenario of Shinagawa, she ran in a safe Democratic seat, winning with over 77 percent of the vote.
But aside from the rare elected official here or there, can truly pro-nonprofit candidates succeed on a larger scale without taking on the impact of big money distorting elections and laundering secret dollars through 501(c) organizations? That may be a necessary element of an ultimately pro-nonprofit agenda. It isn’t just a matter of fighting for government funding for nonprofits or protecting charitable giving incentives. Looking at the big picture, it may be equally important to cease the diversion of as much as $10 billion into election cycles, money that could be used far more productively by nonprofits and society for social betterment.
For now, given most nonprofits’ issue-specific concerns, CForward has to figure out how to translate a pro-nonprofit message into a winning strategy for candidates like Shinagawa. It has to figure out how to attract other political nonprofit entities to the CForward selections so that a nonprofit message from CForward isn’t seen as disconnected with the nonprofit messages of PACs such as AFP and NCAF. And it has to deal with the resource question, because CForward and other nonprofit-friendly PACs are hardly going to be able to outmuscle corporate money flowing to the opposition. Between now and 2014, CForward and potential nonprofit-friendly congressional candidates face some big challenges.