Nonprofit (C)4s Get Ready for Midterms (news)

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Lots Of Money To Move Around PACs, Super PACs, But Also 501(c)4 Tax-Exempt Orgs This Election Cycle

As the primaries wrap up and the general midterm elections start moving into full swing, more and more money will start flowing through various election spending vehicles, including 501(c)4 organizations, which are sometimes criticized as “dark spending” avenues for political expenditures. 501(c)4 organizations are prohibited by FEC and IRS rules from spending more than 50% on political lobbying or advocacy, though some critics argue that the largest funds might spend beyond that. While 501(c)3 organizations can spend “insubstantial” amounts of money on political lobbying, their 501(c)4 counterparts routinely spend millions during each election cycle. Nonprofits should brace themselves for a tough messaging battle in Q3 to the beginning of Q4 as they go up against political organizations spending millions on advertising, fundraising, lobbying, and the like.

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Transcript:

[00:00:00] This week on the nonprofit news feed for the week of July 11th, seven 11, always open lots of money, lots of money moving around packs and super packs. As we move into that type of midterm season, Nick, how’s going good, George. We can dive right into it. So alluding to that first story, uh, we wanted to talk about at the head of the podcast was that lots of money are moving around packs super PACS, but also 5 0 1 C four tax exempt organizations, this election cycle as in past election cycles.

[00:00:38] So this is something we want to talk about because I think it’s important for nonprofit leaders to know that there are tax exempt organizations operating in this space and. Might create messaging challenges and public perception, challenges as we go into what is sure to be another pretty volatile midterm election year.

[00:00:59] So 5 0 1 C four organizations are similar to C3 organizations except they are. Specifically designed for groups that work on advocacy they can spend up to, but no more 50% of their expenditures on advocacy, political lobbying, X, Y, Z some of these orgs, however that are associated with packs doll out millions and millions of dollars.

[00:01:26] We have an article in here about a pack associated with Senate majority pack, uh, or a, a C4 associated with Senate majority pack. Given out tens and tens of millions of dollars to various causes in previous elections. This is just how it works. Right. C four S are increasingly a vehicle for moving money around in the political space.

[00:01:47] C3 organizations can send, spend quote, unquote insubstantial amounts of money on political lobbying. Definitely do research it before you do that, if you’re a C3, but the, the takeaway here is that C four S are tax exempted organizations. There’s going to be tens of millions, if not hundreds of millions of dollars swirling around this year during the.

[00:02:13] Quite frankly, C3 should be aware of that. You might see more news stories about X, Y, and Z tax exempt organization, dark money, this that, how can your organization increase its legitimacy. And the perception that your money is being used for good and being used efficiently. Something else we wanted to point out is that advertising during elections can become notoriously difficult for smaller organizations going up against these massive ones cost per click on ad

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