Is Exodus a Lobbyist Group?

Timothy Kincaid

August 7th, 2007

Exodus International requests contributions from its supporters by means of its website.  Exodus informs potential donors of the following:

We are a 501(c)(3) organization incorporated in the state of Maryland. Our tax identification number is 52-1413470.

501(c)(3) status refers to a section of the tax code identifying a specific type of non-profit organization. This status is particularly important because this is what allows contributions to such an organization to be deductible on the donor’s income tax return. It is this distinction that motivates many larger donors to contribute to non-profit charitable religious or educational organizations instead of candidates or political efforts.

Tax deductible organizations are allowed to take positions on cultural issues and can even do some minimal lobbying. They can extol the virtues of conservationism or decry the evils of greenhouse gasses or educate about immigration. But they cannot endorse candidates and they cannot be a lobbyist group.

In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.

An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.

It is quite clear that Exodus does at this time perform lobbying efforts.  Whether it is a “substantial part” of their organization is a legal question I am not qualified to answer.  However, in general Exodus is allowed to spend about 20% of its budget on direct contact with legislators and about 5% on grass roots efforts.

Exodus may wish to contact its CPA firm to help determine how Amanda Banks’ salary is to be allocated.

See also:

Exodus Sharpens Its Political Presence

Lynn David

August 7th, 2007

Here in Indiana we have the AFA of Indiana which has a separate AFA of Indiana PAC as well. And there have been times that the AFA/IN has made an endorsement, but it is unclear if it is the AFA/IN-PAC which made the endorsement or just the plain, ole AFA/IN. Even if the AFA/IN-PAC made the endorsement instead of its nonprofit sister, it is still a problem because a nonprofit 501(c)(3), unlike 501(c)(4) organizations, are not allowed to form political action committees under federal tax rules.

A 501(c)(3) not-for-profit corporation are sch organizations which are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. But in Indiana the people behind the AFA/IN have been getting away with it for years now. The AFA/IN-PAC has also been busy degrading democrats in Indiana [see: http://advanceindiana.blogspot.com/2007/04/afa-fails-truth-in-advertising-test.html }. Now small groups such as these may be able to get away with it. But I doubt Exodus could.

I wonder, hiring a lobbying firm like the Wabash Group seems to be a way of getting around the idea that they cannot form a PAC. Not exactly the same structure but could have the same effect.

Robguy

August 7th, 2007

I wonder if it would even matter under the current administration.

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