View Full Version : Why are donations to the Brady Center fully tax deductible? non profit 501 c experts
04-16-2003, 02:29 PM
Why are donations to the Brady Center fully tax deductible? They favor legislation??!
The tax law says to be a 501 c-3 non profit organization you must have
“no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h)), and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office”
Yet on the Brady Center website they state their purpose:
Help us create an America free from gun violence.
Together, we will join forces to build a safer America through:
• Passing sensible gun laws
• Building grassroots activism
• Increasing public awareness
And they say if you wish to donate:
“Your entire gift to the Brady Center to Prevent Gun Violence is fully tax-deductible since no goods or services were provided. If you wish to support our legislative activities, go to www.bradycampaign.org. “
What gives? A non-profit charity that declares its purpose is to pass specific types of laws is not “trying to influence legislation?”
04-16-2003, 02:59 PM
It's actually two different organizations.
The Brady Center to Prevent Gun Violence is a 501(c)(3). Donations are tax deductible, so no lobbying.
OTOH The Brady Campaign to Prevent Gun Violence is a 501(c)(4). Not tax-deductible. Their donation page (http://www.bradycampaign.org/donate/index.asp) says:Because we lobby for sensible gun laws, contributions to the Brady Campaign are not tax deductible for federal income purposes. If you wish to make a tax-deductible gift, go to www.bradycenter.orgThe way that the two websites share a lot of pages and text is very confusing. But I presume as long as they keep the bank accounts separate, they meet the requirements of the law.
04-16-2003, 03:14 PM
Subsection (h), perhaps?
Expansion on the Section 501(h) Election
For an organization to remain eligible for tax-exempt status under section 501(c)(3), it must not engage in too much lobbying activity._ Section 501(c)(3) provides in relevant part that an organization shall be eligible for tax-exemption so long as "... no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except as otherwise provided in subsection (h))..."._ Since under the "no substantial part" test there is very little guidance to help section 501(c)(3) organizations know what is too much lobbying, in 1976 the Congress added subsection (h) to section 501 which generally allows section 501(c)(3) organizations to elect to have the question of whether they are engaging in too much lobbying decided on the basis of how much money they spend on lobbying, i.e., the level of their lobbying expenditures._ We will refer to this election as the "(h) election."_ Generally, section 501(c)(3) organizations are permitted under the (h) election to spend up to 20% of the first $500,000 of their budget on lobbying and reduced percentages of budget amounts above $500,000 with an overall cap of $1 million._ Of the permissible amounts, only 25% may be spent on grassroots lobbying._ Generally grass roots lobbying involves contacting members of the general public and in turn urging them to contact legislators to urge them to act favorably or unfavorably on some proposed legislation.
The (h) election provides very clear guidance as to what is and is not lobbying, etc., and its rules are liberal in the sense of characterizing activity, that might be considered lobbying under the rules that apply if a group has not made the election, as not constituting lobbying._ Many close observers of the nonprofit sector think that groups that do lobbying at any significant level are well advised to make the election._ It appears, however, that few have done so.
Looking at the brady sites though, it's more complicated.
Because we lobby for sensible gun laws, contributions to the Brady Campaign are not tax deductible for federal income purposes. If you wish to make a tax-deductible gift, go to www.bradycenter.org [/b]
now, http://www.bradycenter.com/donate/index.asp says:
[quote]Your entire gift to the Brady Center to Prevent Gun Violence is fully tax-deductible since no goods or services were provided. If you wish to support our legislative activities, go to www.bradycampaign.org.
So they're clearly distinguishing (or maybe not so clearly...) the two entities. I'm guessing the Center is more focused on education and promoting nonviolence (and probably only does comparatively small amounts of actual lobbying), whereas the Campaign is explicitly trying to change laws.
Those are just arguments, mind you. It all seems pretty shaky reasoning to me.
04-16-2003, 03:44 PM
Lots of 501(c)(3) organizations work to promote or advocate legislation that advances whatever endeavor to which they have committed themselves. I do a good amount of work with several 501(c)(3)s that deal with banning weapons of mass destruction such as landmines, and they contact senators all the time (and urge regular people to do the same) to ask them to sign such-and-such bill and it's all perfectly legal and on the up-and-up. But they are not classified as lobbys, and I'd bet that the definition of what a "lobby" is makes all the difference.
04-16-2003, 03:51 PM
I really need to know where the line is.
I am in the planning stages of a 501 c 3 organization with a definite agenda, just like the brady center. Can you help me figure out where exactly the line is? Who would know?
I guess I really need to consult with a lawyer...but the Brady center website makes me think it is pretty flexible.
04-17-2003, 12:12 PM
From the horse's mouth ("Charities & Non-Profits, Exemption Requirements"):
and see, in particular, "Lobbying Issues":
… the Code creates four separate and very different regulatory regimes" regarding lobbying.
The first regime, which applies to IRC 501(c)(3) public charities, permits these organizations to lobby so long as they do not devote a substantial part" of their activities to attempting to influence legislation. This system has two subsets, which employ different tests of substantiality. The older, enacted in 1934, applies facts and circumstances criteria to determine substantial part." The newer was introduced in 1976, by the enactment of IRC 501(h) and IRC 4911. IRC 501(h) provides that certain public charities may make an election and have their lobbying activities governed by expenditure tests in lieu of being subject to the IRC 501(c)(3) substantial part" test. If the expenditure limits are exceeded, a tax under IRC 4911 will be imposed or, if the limits are exceeded by 150 percent over a defined period, exempt status will be lost. The tests are discussed in Parts 2 and 3.
The second regime applies to IRC 501(c)(3) private foundations. Under this regime, any expenditures incurred for lobbying activities are treated as taxable expenditures under IRC 4945(d)(1) and subject to the tax imposed by IRC 4945(a). Part 4 discusses this topic.
The third regime involves other federally tax-exempt organizations. Outside of IRC 501(c)(3), there is no specific provision of IRC 501(c) that restricts lobbying activities. Consequently, the only limit imposed on the lobbying activities of non-IRC 501(c)(3) organizations is that the lobbying activities must be germane to the accomplishment of the organization’s exempt purpose. As a result, the organization’s sole activity in support of its exempt purpose may be lobbying without jeopardizing its tax exemption. This topic is discussed in Part 5.
The fourth regime concerns the lobbying expenditures of businesses. These rules are set forth in IRC 162. Until recently, this was not a subject that particular concerned exempt organizations. Now, however, because of the lobbying disallowance provisions of the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993), exempt organizations also must consider the provisions that disallow deductions for lobbying by businesses. Part 6 discusses this topic.
That PDF is 106 pages. Happy reading.
04-17-2003, 12:19 PM
Really, your best bet to keep things on the up-and-up is to either make a section (h) election, which allows you to spend 20% of your income on lobbying efforts (but only 25% of that on grassroots efforts)--it looks like unpaid volunteers, etc. can be used to lobby and thereby get you more lobbying for your buck--or instead form a 501 c 4, which is allowed to lobby so long as the stuff it's lobbying for is in line with its primary mission (i.e., a gun-control organization could lobby for legislation supporting further limits on handgun ownership without incident, but probably not on abortion rights legislation).
04-17-2003, 12:22 PM
- - - Sarah Brady has two organizations, one to fill each pocket.
04-18-2003, 06:30 AM
[b]ready29003[/], since you're "in the planning stages" for your non-profit, you must be recruiting a board of directors. Recruit a lawyer.
I was with several major charities (at the state level) for years. We always had a lawyer -- or several -- on the board who gave their expertise as part of their service to the organization.
04-18-2003, 08:49 AM
Originally posted by DougC
- - - Sarah Brady has two organizations, one to fill each pocket.
~ Cite, please?
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