Are Nonprofits Losing Their Voice in Washington?

August 16, 2023 | Luke Wachob

“We want them to get off the sidelines and to get back on the field.”

That’s the message Akilah Watkins, President and CEO of Independent Sector, is sending to the nonprofit community just days before National Nonprofit Day on August 17, after a recent survey of over 2,200 organizations revealed a steep decline in advocacy on public policy issues.

“Less than one-third of nonprofits have actively advocated for policy issues or lobbied on specific legislation over the past five years, down from nearly three-quarters of nonprofits in 2000,” noted a widely syndicated article by Alex Daniels of The Chronicle of Philanthropy.

Independent Sector, a coalition of nonprofits and grantmakers, wants to reverse that disturbing trend. They wish for nonprofits to reclaim their longtime role as advocates for their communities in Washington and state capitols. But they face a pair of familiar and formidable obstacles: the IRS and political leaders intent on controlling the conversation about their policy agendas.

If nonprofits don’t find a way to counter these threats, their voice in America’s future political and social debates is far from guaranteed.

Independent Sector’s survey revealed nonprofits “fear that taking part in debates on policy matters or providing voters with nonpartisan voting guides would put their nonprofit status in jeopardy.” That is partly due to uncertainty in the IRS’s guidance for nonprofits, but nevertheless, federal law undeniably permits nonprofits to engage in a wide range of advocacy activities. It’s also true that, in the past and under many of the same rules, nonprofits regularly worked to effect changes in public policy.

So, what happened? Are today’s nonprofit leaders getting bad legal advice? Losing their courage?

Not exactly. The IRS has a history of targeting nonprofits for investigations and harassment based on their views about public policy. The last time it happened in a way that snowballed to major scandal – the targeting of Tea Party groups in the early 2010s – the outcry was enormous, but the reforms were minimal.

Many of the IRS’s leaders at the time resigned, and Congress put riders in future budgets to stop IRS officials from imposing even worse regulations on nonprofits. Neither measure, however, gave Americans – and the causes they support – lasting assurance that the IRS would not target them for their beliefs in the future.

Making matters worse, politicians from both major parties have begun attacking nonprofits that oppose their agendas as “dark money” groups. Senate Democrats have long sought to impose new speech-chilling laws on nonprofits, even promoting the “deterrent effect” such laws would have on nonprofits’ advocacy efforts. On the Republican side, some members increasingly flirt with the idea of unleashing the IRS on liberal nonprofits.

Then, there’s our increasingly heated political environment, which has everyone thinking twice before expressing views that might generate a backlash. The internet and social media have made it easier to track what people are saying – and punish them for it. Add it all up, and it’s no surprise nonprofits aren’t engaging with policymakers and the public the way they used to.

Falling silent, however, won’t stop the threats. It will just leave Americans with less of a voice in our policy debates.

To begin pushing back, nonprofit leaders must demand that the government respect their members’ First Amendment rights to support social causes and to speak out about public policy. Americans across the political spectrum should join them. The IRS’s chill on speech is not just a problem for nonprofit leaders and donors. It’s a problem for taxpayers, voters, and everyone who cares about democracy and freedom of speech.

For generations, nonprofit membership organizations and advocacy groups have provided one of the main avenues for Americans to exercise their First Amendment rights. Americans join and donate to nonprofits to support their shared values and amplify their voices on social and policy issues. These organizations then keep their members and the public informed and involved during the nitty gritty of legislating and governing.

In the hopes of shutting down a few groups they disagree with, politicians seem increasingly willing to throw all that away.

On August 17, nonprofits across the country will celebrate the impact they and their members have made through their generosity and tenacity during National Nonprofit Day. In a testament to the power of tax laws to shape the nonprofit universe, the date was chosen to coincide with the passage of the Tarriff Act, the 1894 law that exempted nonprofits from the federal income tax. But as nonprofits increasingly stay silent on policy issues and Americans’ giving to charity wanes amid inflation and cancel culture, this year’s National Nonprofit Day ought to be a call to action.

America needs strong nonprofits. Nonprofits need freedom of speech.

The good news is that policymakers have begun to respond to the demand for better protection for nonprofits and free speech. In the House of Representatives, the American Confidence in Elections (ACE) Act (H.R. 4563) would make it safer and easier for nonprofits to exercise their First Amendment right to speak out on policy issues. The legislation permanently restricts the power of the IRS to crack down on social welfare nonprofits and codifies recent court rulings protecting the privacy of nonprofit donors.

The ACE Act, sponsored by Rep. Bryan Steil (R-WI), passed out of the House Administration Committee in July and now awaits action in the full House. Over 70 nonprofit leaders and organizations, including People United for Privacy, have already endorsed its protections for nonprofit advocacy and donor privacy.

If Congress steps up and passes the bill, nonprofits will truly have something to cheer about. Until then, this year’s National Nonprofit Day will take place under a cloud of uncertainty about nonprofits’ future role in American democracy.