Nonprofits and Elections Are Intertwined

In the middle of this noisy election season, I ask the question: What is the connection between elections and nonprofits? The answer, in short: They are intertwined. This may surprise many of you, so let me explain.

First, I will explain what I don’t mean. You may have heard a lot about “dark money.” This is spending to influence elections that is not channeled directly through candidate campaign war chests, but instead is “hidden” by filtering through organizations with generic sounding names, thus keeping voters in the “dark” about the original source. Usually, the media describe these organizations as nonprofits, because most often they are 501(c)(4) “social welfare” nonprofits that are permitted some spending in elections. But the media confuse people when they simply call them “nonprofits” without clarifying which type. They may lead some people to believe that all or most nonprofits are freely spending money on elections, which is not the case. That is what I don’t mean when I say elections are intertwined with nonprofits.

To clarify, the largest group of nonprofits are charitable 501(c)(3) organizations. These are the groups most people think about when someone refers to nonprofits: homeless shelters, cancer support groups, arts organizations, conservation advocates, youth organizations, animal welfare groups, etc. These charitable nonprofits are expressly prohibited from endorsing or opposing candidates for office, which includes giving money to campaigns, at the risk of losing their tax exemption from the IRS. (Note: They are allowed to get involved in ballot initiatives, as long as they report accurately to the IRS.) Therefore, when the media describe dark money as flowing through “nonprofits,” be clear that they are not referring to charitable nonprofits, the same ones you support with your charitable contributions.

So why, then, do I suggest that nonprofits are intertwined with elections?

The answer begins with nonprofit finances. On average, nearly one out of every three dollars supporting nonprofits comes in the form of grants and contracts awarded by federal, state and local governments. For some nonprofits, such as many offering social services, organizations may receive as much as 60 to 70 percent of their funds from government. Yes, when you make a donation to the homeless shelter, you are providing much-needed support. But the reality is that the majority of that nonprofit’s support may be coming from government contracts.

Therefore, nonprofits have a huge financial stake in decisions made by elected officials, which affect and determine the level of funding available to them. During the Great Recession, cuts to funding in social services had huge ramifications for hundreds of nonprofits in Arizona, and some have not yet recovered from those decisions. Furthermore, even nonprofits not receiving government dollars were affected, because social service nonprofits were now competing against them for the same corporate, foundation and individual donations, thus shrinking the pie for everyone.

Funding is one area of nonprofit concern, but it is not the only one. For example, organizations dedicated to stemming the growth of landfills have a huge stake in city policies regarding trash collections and recycling. Organizations operating group homes in neighborhoods need supportive city council members to secure zoning permissions. The list goes on.

In short, nonprofits need strong allies in the public sector in order to effectively deliver on their missions. And the nonprofit which does not pay attention to who is being elected runs the risk that public policy could undermine its ability to deliver its mission.

Therefore, the upcoming election has huge implications for the relationships between nonprofits and their public-sector allies during 2017 and beyond. And that is why I suggest that the elections and nonprofits are seriously intertwined.

I urge all nonprofit leaders, employees, board members and volunteers to take a serious look at the positions of candidates as they relate to your nonprofit mission. Choose wisely, and vote for someone who will be a strong nonprofit ally in 2017.

Patrick McWhortor is president of Lead for Change, a former president of the Alliance of Arizona Nonprofits and a member of the Arizona Nonprofit Policy Council.