Nonprofit organizations and government have a long history of partnership, but also of divergent philosophies and conflicting priorities. This is part of what makes each sector unique and inherently useful to the country; both sectors, warts and all, are vital and valuable in a democratic society. Given the differing perspectives, therefore, it is not surprising that the relationship between the second and third sectors has had many rocky periods of conflict and distrust. However, the relationship between the federal government and nonprofits, especially government grantees, has become increasingly adversarial as nonprofits have challenged government efforts to restructure or dismantle social service programs. The Bush administration and some members of Congress have attempted to change the content of programs, eliminate quality guidelines and turn over programs to states. Nonprofits are also responding to the impact tax cuts have had on support for federal programs that help people in need. The reaction from the federal government has been, in many instances, swift and severe.

As the administration and some members of Congress have become more ideological in establishing program priorities, nonprofits that speak out in opposition have felt the crunch in funding cuts, retaliatory audits and other actions. Many of these practices were detailed in a 2003 OMB Watch report titled “An Attack on Nonprofit Speech: Death by a Thousand Cuts” and will be revisited in the follow-up report that will be published this fall. It is clear that the administration and its allies in Congress have sought to silence nonprofit speech. But many federal grantees and nonprofits are responding, often successfully, by challenging these actions. The following examples demonstrate that nonprofits do not need to sit by (in fact, should not sit by) and watch the erosion of their rights without taking action.

Head Start

Early in 2003, the Bush administration proposed significant changes to the Head Start program, including conversion to state block grants and underfunding of the program. Head Start advocates strongly criticized these proposals. The National Head Start Association (NHSA) sent materials to Head Start grantees encouraging them to tell parents about the many concerns they had with the President’s plans.

In May 2003, the Department of Health and Human Services (HHS) moved to head off broad opposition to the President’s plan and the subsequent bill. HHS sent a misleading and inaccurate letter to Head Start grantees implying that they could not lobby against the bill because they receive federal funds. The letter threatened sanctions against programs and parents who engaged in lobbying activity. After NHSA filed a lawsuit, HHS was forced to send a corrected letter to all Head Start programs, making it clear that the restriction on lobbying only applied to federal grants, not other sources of funding.

By November, the Head Start reauthorization bill was stalled. Two members of Congress, Reps. John Boehner (R-OH), chair of the House Committee on Education and the Workforce, and Michael Castle (R-DE), chair of the Subcommittee on Education Reform, sent a letter asking for a “review of the financial management of Head Start grantees nationwide.” The Boehner/Castle letter stated their concern about possible misuse of Head Start funds and cited an example of what they considered to be abuse. The example of alleged abuse was the excessive salary paid to the executive director of the agency that runs the Head Start program in San Antonio. However, a quick online search of the Internal Revenue Service’s Form 990 returns from Parent/Child Inc. by OMB Watch found that the salary was in line with nonprofits of comparable size. For example, United Way of San Antonio, though 24 percent smaller than Parent/Child Inc., pays its president 8.5 percent more.

To respond to the Boehner/Castle letter, HHS proposed to mail a survey to all 2,700 Head Start programs in order to identify the top 25 salaries and benefits of Head Start executives. They estimated   each   agency would take nine hours to complete the survey. HHS asked the Office of Management and Budget (OMB) to approve the survey under emergency powers, within 30 days. No justification was offered to explain why this was an emergency. The real “emergency” seemed to be that the President’s proposed restructuring of Head Start had met with stiff opposition from the Head Start community.

Head Start advocates opposed the survey, but OMB gave HHS permission to move ahead. The results were never widely publicized since they showed that most of the top salaries were in large agencies where Head Start was only one of many programs. There was no “there” there.

In the meantime, Head Start advocates used the Freedom of Information Act to request records on Windy Hill, the U.S. Head Start bureau chief that sent the inaccurate letter about grantee lobbying rights. Before coming to Washington, Hill had run a Head Start program in Texas. In April NHSA found and released details of Hill’s misconduct in the Texas program, alleging thousands of dollars in unauthorized pay, vacation time and undocumented expenses. Hill is now the subject of an Inspector General investigation and has announced her resignation effective in November.

In June, NHSA released new details of misconduct by Hill and said her resignation should be effective immediately. The new information revealed that Hill hired the suspended Texas accountant that reviewed her programs to serve as an HHS reviewer of Head Start programs. The group also alleged that Hill began her job at HHS while on “leave of absence” from the Texas program, without disclosing that fact to her board or in the public financial disclosure report required by ethics laws.

In the meantime, the Head Start community has held off passage of the restructuring it opposes, as the Head Start reauthorization bill remains stalled in Congress. Head Start advocates have enforced their right to lobby on the issue and successfully countered the attempts to discredit the program by Reps. Boehmer and Castle.

Global Health Council

In April, HHS pulled partial funding for the Global Health Council’s 31st annual conference after conservative critics objected to some of the topics and speakers. The Council’s conference, which brings together public health professionals from around the world, has been subsidized by the federal government for decades, and federal officials often participate.

The trouble began when House Republican aides Sheila Maloney and John Casey e-mailed a message to alert anti-abortion groups that the International Planned Parenthood Federation and the United Nations Population Fund would take part in the conference. Both groups have objected to the global gag rule that bars federally-funded clinics from discussing abortion with their clients, even with non-federal funds. The Traditional Values Coalition and other conservative groups, along with twelve members of Congress wrote HHS opposing the $360,000 in conference funding.

HHS responded by cutting the funds for the conference. Their excuse was a claim that federal dollars were being used to lobby. However, the conference sponsors segregated the lobbying component in a separate “pre-conference” day. The conference agenda did not include any further activity that could be viewed as lobbying. Bill Pierce of HHS told the press that the Council was “unable to delineate for us, breaking it out, how our money was going to be spent and not commingled with lobbying activity.” However, it appears at least a portion of the funds was to be spent to cover the travel costs of 50 public health professionals from developing countries that were scheduled to present papers at the conference.

The president of the Global Health Council, Dr. Nils Daulaire, said that the Council does not use federal funds for restricted activities, and is careful to have balanced viewpoints presented. He noted that there were speakers at the conference that supported abstinence-only sex education, as well as a representative from the President’s Advisory Committee on HIV/AIDS. Daulaire said, “There are many things that the professional community has divergent views on, and we believe the best way to deal with this is to have a free and open exchange.”

Daulaire used his keynote address at the organization’s conference to sharply condemn the HHS decision, saying it “bowed to election-year political pressure…[and] a small group of right-wing extremists.”   He also said, “we have a responsibility to stand up and challenge those who hold positions of public trust when they are wrong—and on this, they are wrong. And challenge them we will, not because of our one conference, but because of who might be next.”

Advocates for Youth

HHS has used its audit powers in an attempt to rein in grantees that use non-federal dollars to advocate against administration policies. One victim is Advocates for Youth, which conducts sex education and HIV/AIDS prevention programs. In August 2003, HHS began its third financial review of the group in a year, although the previous two audits found no problems. The new review responded to a complaint by Rep. Joseph Pitts (R-PA), an abstinence-only advocate. Pitts and 23 other members of Congress complained about an Advocates for Youth–sponsored Web site,, that urged opposition to funding for abstinence-only programs. The congressmen reportedly asked HHS to examine whether Advocates for Youth was spending federal dollars on lobbying.

The group has been receiving federal funds for 15 years and has never had an audit, except for the last two years when they were audited by both the Center for Disease Control and the Government Accountability Office (GAO). “Advocates is concerned that it appears that the selective and political use of these audits is to intimidate organizations such as ours that support comprehensive sex education,” spokesman Bill Barker said. “They want to impose a kind of censorship.”

The trend toward ideologically-based audits has drawn the attention of Rep. Henry Waxman (D-CA), the ranking member of the House Committee on Government Reform, who sent a letter to HHS on Aug. 15, 2003 expressing “growing concern” that “an ideological test is determining whether grantees in the HIV/AIDS prevention programs are audited.”

Advocates for Youth’s problems started two years ago when an internal HHS memo identified the group as “critics of the Bush administration” because of its opposition to abstinence-only programs. As described by Waxman, “Shortly thereafter, several of my Republican colleagues asked the Centers for Disease Control and Prevention (CDC) to audit Advocates for Youth. In January 2003, GAO, at the request of House Republican members, also obtained copies of Advocates for Youth’s financial records.” According to the Washington Post, neither audit found any problems with Advocates for Youth’s handling of federal funds.

Marijuana Policy Ads

Last year, Rep. Ernest Istook (R-OK) encountered an ad in the Washington, D.C. metro rail system supporting legalization and taxation of marijuana. The ad showed a picture of a man holding a woman in his arms with a tag line, “Enjoy better sex! Legalize and Tax Marijuana.” The Washington Metropolitan Area Transit Authority (WMATA) had initially rejected the ad. The American Civil Liberties Union (ACLU) threatened a lawsuit on behalf of the sponsor, Change the Climate, Inc., and WMATA withdrew its objection.

Istook sponsored an amendment to the Consolidated Appropriations Act of 2004 that prohibited any transit agency receiving federal funds from running advertisements from groups that want to decriminalize marijuana or other Schedule I substances for medical or other purposes. In addition, WMATA’s budget received a cut of $92,500 from the federal government, double what it would have cost Change the Climate, Inc. to run the marijuana ad. Istook wanted to send a message to WMATA and other transit agencies.

In February, a coalition of national drug policy reform and civil liberties groups—including the American Civil Liberties Union, Change the Climate, Inc., the Drug Policy Alliance, and the Marijuana Policy Project—brought suit. In June, they prevailed when a U.S. District Court Judge issued a permanent injunction against enforcement of the amendment, saying that “there is a clear public interest in preventing the chilling of speech on the basis of viewpoint.” The permanent injunction prohibits the enforcement of the Consolidated Appropriations Act. Judge Paul L. Friedman of the U.S. District Court for the District of Columbia ruled that the government’s attempt to censor the ads was “illegitimate and constitutionally impermissible.”

In 1995, Istook sponsored a rider to appropriations legislation that would have limited the advocacy voice of the entire nonprofit sector. A unified coalition of thousands of nonprofit organizations spoke out against these amendments and Istook lost his fight.


Nonprofits do not forfeit their constitutional rights to speak on public issues when they get federal funds. All of the groups described in this article have stayed true to their missions and their beliefs, fighting back against politically motivated attacks. The relationship between government and nonprofits is such that vigilance over the rights of nonprofits’ free speech will always be required. Protection of these rights seems to be even more critical right now, given the selective use of audits, funding cuts and threats directed at groups that disagree with the Bush administration. This is an unacceptable attempt to limit debate on important questions of public policy. The sector must continue to expose and resist these actions

About the Author
Kay Guinane is counsel and manager of OMB Watch’s ( nonprofit advocacy and civic engagement work.