Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
55030196
label
[Government Relations]
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
55030196
sourceUrl
contentType
document
title
[Government Relations]
citationUrl
collections
Records of the Domestic Policy Council (Clinton Administration)
Gaynor McCown's Subject Files
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
55030196
levelOfDescription
fileUnit
otherTitles
42-t-7763331-20110255S-009-011-2017
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
7d48da817024a3c7
ocrText
Я
Covefive
July 7, 1995
Volume XVIII
INDEPENDENT
Number 8
SECTOR
GOVERNMENT RELATIONS INFO AND ACTION
FOR INDEPENDENT SECTOR MEMBERS AND ADVOCATES
UPDATE ON CONGRESSIONAL EFFORT TO MUZZLE THE VOICE OF
CHARITIES
Your Action Needed Immediately on a Gag Initiative, Which May Be
-
Voted on in Committee the Week of July 10 - 14
-
Please Sign On to Our Attached Position Statement by July 14
Proposal by Congressmen Istook (R-OK), McIntosh (R-IN). and Ehrlich (R-MD) would Bar the
Use of Privately Contributed Dollars by Charities that are Federal Grantees and Engage in
Substantial Advocacy Activity
In a move that can only be viewed as an effort to still the voice of charitable organizations,
Congressmen Istook, McIntosh, and Ehrlich held hearings on June 29 on what they called
"Washington's dirty little secret" that charities "lobby with taxpayers' money to create political
operations that lobby for even more money." The three Congressmen have proposed legislation which
they say is in response to rampant grant abuse by charities and an attempt at grant reform. Their
legislation, which is presently in draft form, could come up for vote before the full House Committee
on Government Reform and Oversight during the week of July 10 - 14. Please contact now those
Committee Members (see Attachment #1), urging them to oppose the Istook, McIntosh, Ehrlich
proposal to substantially curtail the lobbying rights of charitable organizations.
The proposal's sponsors maintain that when a charity receives a federal grant, it frees up the charity's
privately contributed funds to lobby. They want to end that, although charities have always been
permitted to spend their private dollars on lobbying, up to the limits permitted by legislation enacted
in 1976. They also charged that charities use federal grant dollars to lobby. That is prohibited by
law, and the sponsors have provided no evidence of systematic patterns of such grant abuse.
Mr. McIntosh, in his statement to the press, said, "Americans need to have confidence that their hard-
earned dollars are not being wasted, and under this program their money is going down a rat hole."
Their draft bill would prohibit federal grant funds from being used for "political advocacy," which
includes a number of activities not now considered lobbying under the Internal Revenue Service Code.
Nonprofits that engage in political advocacy-event with private funds=would be ineligible for federal
grants if more than 5% of their non-grant related funds were used for political advocacy. Although
nonprofits now file IRS Form 990, which includes information regarding the amount charities spend
on lobbying, the bill would require another annual report for grantees that engage in political
advocacy. They would be required to provide a description of advocacy activities, with the
resulting additional burden of another layer of reporting. For additional information, see Attachment
#2.
A NATIONAL FORUM TO ENCOURAGE GIVING, VOLUNTEERING AND NOT
FOR
PROFIT INITIATIVE
1828 L Street, N.W.
Washington, D.C. 20036
(202) 223-8100
FAX: (202) 457-0609
87
INDEPENDENT SECTOR's testimony at the hearing was presented by Charles C. Brown, Jr.,
President Judge of the Court of Common Pleas of Center County and Chairman of the Public Policy
Committee of the YMCA of the USA. The YMCA of the USA is a Member of INDEPENDENT
SECTOR. Judge Brown made the following points in his testimony.
- To argue that nonprofit organizations receiving federal grants should be barred from substantial
advocacy reflects a fundamental misunderstanding of the historic relationship between nonprofits and
government.
-- Nonprofits have always been involved in both service delivery and advocacy, and the public
benefits from these dual roles. Both by providing an alternative to direct governmental delivery of
public services, and by enabling individuals to speak out effectively on public policy issues, nonprofits
serve to limit rather than expand the power of the state.
- Barring federal grantees from substantial advocacy activity is neither grant reform nor good
government. No one knows better the extent of a community's needs for services or how best to
improve the effectiveness of federal programs than the nonprofits on the front lines of service
delivery. Excluding these nonprofits will diminish, not protect, the policy process.
-- Existing law properly prohibits the use of grant funds to cover either the direct or the indirect costs
of lobbying. This rule is enforced by federal auditors, and the level of compliance appears to be quite
high. There is simply no justification for imposing more restrictive rules and burdensome new
administrative requirements at a time when nonprofits are being called on to expand their services to
help offset cuts in federal spending. This is particularly true when no similar restriction is proposed
for federal contractors, who would remain free to lobby with their nongovernment funds.
-- Finally, conditioning the receipt of federal grant funds on grantees' renunciation of their First
Amendment right to lobby with private funds raises serious constitutional concerns. While Congress
can refuse to subsidize grantees' lobbying, and can require strict separation of federally-funded and
privately-funded activities, it cannot limit grantees' right to lobby with their private funds.
This action to gag charities comes at a time when Congressional budget committees have proposed
cutting the funding of social programs by $712 billion (House Budget) over the seven-year period
1996-2002. It comes after twelve years of cuts from 1982 - 1994, that totaled $77 billion, exclusive
of Medicare and Medicaid, compared to what would have been spent had 1980 spending levels been
maintained. It comes after Congress ended for the 88 million taxpayers who are nonitemizers the
ability to take a tax deduction for their charitable contributions.
Contact the Government Reform and Oversight Committee Members now. Tell them the voice of
charities, speaking on behalf of their causes, clients, and communities, will not be muted. Tell them
enough is enough.
It will be important for our Members and others to sign on to the attached position statement
(Attachment #3) to let Members of Congress know the broad support for our position on this
issue. To sign on. please return Attachment #4 to us.
Attachment #3
DRAFT
SIGN-ON STATEMENT
DRAFT
Serving the Public Good
A Position Statement on Advocacy By Nonprofit Organizations
The nonprofit sector plays a key role in our society today. In partnership with
government, nonprofit organizations are engaged in service delivery, research,
public education, and much more -- in general, they work to build a better America:
Nonprofit organizations also speak to policymakers and the public on behalf of the
people they serve, as well as empower them to speak for themselves. The
advocacy voice of the nonprofit sector has led to significant improvements in public
policies at the local, state, and federal level.
Because nonprofit organizations do not stand to profit by lobbying and can provide
enormous insight on public policy issues, Congress has encouraged them to lobby,
but has placed detailed restrictions on the amount of money that can be used for
lobbying purposes. The federal government also bars nonprofits from using any
federal funds for lobbying purposes, and prohibits nonprofit organizations from
engaging in partisan politics.
Nonprofit organizations faithfully comply with all these restrictions and support
enforcement of penalties when the rules are violated. However, some in Congress
are proposing to go beyond current restrictions to silence the advocacy voice of the
nonprofit sector. They would, for example, expand the lobbying restrictions to
include all "political advocacy" activities, bar certain organizations that engage in
advocacy from receiving any federal grants, and prohibit federal employees from
giving contributions to nonprofits that engage in advocacy. Such efforts will have
a chilling impact on the democratic process as well as the rights of individuals and
organizations to participate in public policy debates.
We strongly oppose any effort to limit the advocacy voice of the nonprofit sector.
Curtailing the historical responsibility to speak to the public and to policymakers on
behalf of the people nonprofit organizations serve would be a severe blow to our
democratic freedoms.
Endorsed by,
American Heart Association
OMB Watch
INDEPENDENT SECTOR
Summary of a Bill to Stop
Taxpayer-Funded Political Advocacy
by Congressmen Istook, McIntosh, Ehrlich
General Description
Tens of thousands of special interest groups representing the entire political
spectrum receive more than S39 billion in federal grants each year. While no one knows
exactly what happens with all this money, we do know that large sums are being wrongly
spent on political advocacy. This bill puts a stop to taxpayer funded political advocacy.
This bill attacks the problem both directly and indirectly. It directly prohibits any
recipient of a federal grant from spending any grant funds on political advocacy.
Because money is fungible, however, it also indirectly attacks the problem by setting
limits on the amount of political advocacy that a grantee can perform with non-grant
funds.
Section 1 -- Prohibition on the Use of Federal Funds
Section (a) sets out the limitations that will apply to all federal grantees. It
permanently prohibits grantees from using funds from any grant to engage in political
advocacy. It also bars grant applicants from receiving grants if they have expended a
significant amount of money in the past 5 years on political advocacy, and bars grantees
who retain possession of federal funds from spending a significant amount of their money
from any source on political advocacy. The direct ban is absolute. Section (a) also
places an obligation on the grant makers to inform all grantees that they are subject to
this law.
Section (b) is the enforcement provision. Each grantee is subject to audit by the
GAO, is required to follow generally accepted accounting principles (GAAP), and (if it
engages in political advocacy) bears the burden of proving by clear and convincing
evidence that it is in compliance with this law. Subsection (b)(2) incorporates the
current qui tams provisions that authorize private attorney general actions for false⁻
claims made to the United States. Finally, government officials who violate this law are
subject to administrative discipline and/or a $5,000 civil penalty.
Section (c) is the definitional section. "Political advocacy" is carefully defined. It
starts with the definition used in the tax code that applies to 501(c)(3) non-profit
charities, and expands beyond those limits where necessary. For example, it extends that
definition to include participating in certain types of judicial litigation, lobbying federal
and state agencies, and the laundering of funds through organizations that engage in a
significant amount of political advocacy. The safe harbors that currently exist in the tax
code for 501(c)(3) non-profits are retained. The definition of a "grant" is adapted from
Jul 18. 1995 (11:04am)
current law (31 U.S.C. 6304) to include the provision of any Federal funds used to carry
out a public purpose of the United States, but does not include funds used to acquire
property or services for the direct benefit or use of the United States, or to pay loans,
debts or entitlements, or funds provided to Article I or III courts. "Grantee" is defined
to include any recipient of a grant, except for states or local government, but does
include grantees that receive Federal funds from state or local governments.
Section 2 -- Disclosure Requirements
This section requires all grantees to submit an annual report to the Federal entity
awarding or administering the grant. Grantees that do not engage in advocacy need only
submit a simple statement to that effect. Politically active grantees must disclose basic
information about the grantee, the grant awarded, and the political advocacy conducted
by the grantee.
Section 3 .. Federal Entity Report
This section requires each Federal entity awarding or administering the grant to
report to the Bureau of the Census the names of all grantees, as well as the information
provided to it by each grantee that engages in political advocacy. In order to facilitate
public access to this information, this information shall be included in the Bureau of the
Census database on grants, and made available through the Internet.
Section 4 -- Public Accountability
This section makes all of the above information available to the public through
the Freedom of Information Act.
Section 5 -- Severability
This section is a saving provision that preserves the validity of the remainder of
the Act in the event that any provision of the Act is held invalid for any reason.
Section 6 -- First Amendment Rights Are Preserved
This section restates the intent of the drafters that nothing in the Act shall be
deemed to abridge any First Amendment rights, including the right of free speech and
the right to petition the Government.
Jul 18. 1995 (11:04am)