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Nonprofits warned to be careful at election time

The Connecticut Jewish Ledger
September 19, 2000

HARTFORD—With the selection of Sen. Joseph Lieberman as Vice President Al Gore's running mate, members of Jewish communities throughout the country, particularly those in leadership positions, have been inundated with interview requests by the media.

From television stations to newspapers, every form of media has been looking for the Jewish community's response to Lieberman's nomination.

The Jewish Council for Public Affairs (JCPA) and local Jewish Community Relations Councils (JCRC) have been reminding Jewish non-profits to be careful about what they say. Their tax-exempt status prohibits them from endorsing any candidate or political party.

However, involvement in non-partisan voter registration, education and "get-out-the-vote" campaigns will not jeopardize their tax-exempt status. Jewish non-profits can also hold debates and publish lists of incumbents' voting records on a variety of issues.

These activities are important because, according to the JCPA memo, studies show that about 20 percent of American Jews are not registered to vote.

"We want to make sure people abide by the IRS regulations, but that it doesn't have the chilling effect," said Reva Price, Washington representative of the JCPA.

Federal tax law states that organizations exempt from the federal income tax under Section 501c (3) of the Internal Revenue Service (IRS) code "may not participate or intervene, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office."

"It's an absolute ban, and it applies to both primary and general elections," explained Price.

Most Jewish non-profits and all synagogues are designated as 501c (3)s, also known as public charities by the IRS.

Failure to comply with this requirement can be found guilty of violating IRS laws as well as Federal Election laws, says the JCRC of New York's pamphlet "Election Year Guidelines." Improper activities could lead to an excise tax on the organizations and its staff and lay leadership as well as the revocation of the organization's tax-exempt status by the IRS. Plus, the Federal Election Commission (FEC) can initiate a lawsuit against an organization for making a "contribution or expenditure, in connection with any [federal] election." And, anyone, including the loser of an election, can easily make a complaint that will trigger an IRS investigation, an FEC investigation or both.

The Connecticut State Election Enforcement Commission can also fine the officers of a non-profit 501c (3) organization up to $2,000 for each violation of the state election and campaign finance laws, said Gregory Zepka, director of disclosure and public information at the State Election Enforcement Commission.

Besides violating federal and state laws, supporting or opposing candidates for office can adversely harm the non-profit organization.

"If a non-profit backs a local or state guy and he loses, you could have your funding cut," explained Marcia R. Eisenberg, director/general counsel of the Jewish Legal Assistance Program of the JCRC of New York.

Although they can't endorse or oppose a candidate for public office, nonprofit 501c (3) organizations can publicly advocate for an issue or a ballot proposition.

"We have positions on issues, and if a candidate aligns themselves with a position closer to ours, that's for individuals to decide. We take positions on issues, but we often work with officials that agree with us on some issues and don't on others," Price said. "It's so important to stay non-partisan. Some issues we work together, some we don't."

While any individual may participate in campaigns, the JCRC of New York writes that communal leaders-both lay and professional-should keep their individual political activities carefully segregated from their relationship with any non-profit or religious organization.

"If you're there to represent, take care of, and speak for your organization for communal needs, not having access to your government is the pits," Eisenberg said. "If you back the wrong person, you can't do your job."

"There are two great reasons to avoid stepping in to the electoral fray," explained Ethan Felson, executive director of the JCRC of the Jewish Federation of Greater Hartford, which sends a memo every June to all leaders of Federation agencies and synagogues with what activities to avert.

"One is to avoid a costly challenge to your non-profit status. Secondly, because your candidate may lose, and you'll have an elected official who well remembers the leaders of your organization were against him."

While its up to the individual organizations to decide whether its communal leaders can publicly support a candidate on their own, Eisenberg said that she thinks it's unwise for one, especially the executive director, to do so.

"Here our lay leaders and staff quoted in the paper will not support or come out against a candidate/party," she said.

She even recommends that lay leaders cut all ties to political campaigns until after their terms in their nonprofit organizations end.

Locally, the Greater Hartford JCRC also urges visible leaders-both lay and professional-of nonprofit organizations to "avoid stepping into the electoral fray."

"People may have a difficult time discerning when people act in their private role and their public role on behalf of the organization. So the safest rule is the most cautious rule," Felson said.

Bob Fishman, the executive director of the Jewish Federation Association of Connecticut (JFACT), also tells the leaders of his organization to err on the side of caution. While JFACT is a 501c (4) organization-also known as an advocacy nonprofit-its donors contribute money to a 501c (3) fund.

"We know our donors rely on the tax deductible nature of what we do," said Fishman. "To put that in jeopardy is counterproductive to our mission."

He strongly discourages staff and lay leaders from attaching their name and title to any campaign advertisements or literature.

"It is something people have to be careful about. A lot of things are very gray. We encourage people to do non-partisan voter registrations and get-out-the-vote campaigns," said Price.

"Sometimes because it's so gray, people don't want to do the things they are allowed to do."

There are a list of activities, though, that nonprofit 501c (3) organizations can organize-from voter registration drives to debates-and not jeopardize their tax-exempt status.

But, Eisenberg warned that some Jewish nonprofits may have contracts with local, state or federal departments, such as senior services or youth, which may contain language that forbid voter education or registration drives.

Candidate questionnaires should be avoided, Felson advised. In the past, some questions have been slanted in favor of one candidate, thus eliciting close scrutiny by the IRS.

While having Lieberman as the headline speaker may draw record crowds now for Jewish nonprofits, the Greater Hartford JCRC recommends this be avoided unless all legally qualified candidates have been invited as well.

© JTA Inc., 2000. May not be reproduced without written permission


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