8/13/2019 "Separation of State and Nonprofits Is Valuable" by Dimitri Cavalli in the Washington, D.C. daily newspaper Roll C

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14 Roll Call Thursday October 11 2012

O P I N

Separation of State andNonprofits Is Valuable

B Y D I M I T R IC V L L I

uestObserver

Every sooften thereare calls for thefed-eral governmentto

revoke the tax-exempt statusofchurches.The most common arguments made

for taxing churchesarethat exemptionsdeny the government important sourcesof revenue to pay itsbillsandthat manychurches often abuse their tax-exemptstatus by violating IRSguidelines thatprohibit themfromengaginginpoliticalactivity.

In fact, churches areonly partof thelarger nonprofit sector in the UnitedStates. Accordingtodata collectedby theNational Center forCharitable Statistics,

there are more than 1.5millionnonprofitorganizations (with com bined total assetsof almost $5.7 trillionas ofAugust 2012)registered withtheIRS,andmanyofthemare nonreligious institutionsandorgani-zations that also seektoinfluencepublicpolicy despite being tax-exempt.

Houses of worship andcharitiesareregistered withthe IRS as 501(c)(3)non-profit organizations. Becausefinancialcontributions to 501(c)(3)nonprofits aretax-deductible, donors have theincentiveto open their wallets.

W hen most people hear theterm tax-exempt, they usually thinkofchurchesand charities.In fact,the IRSexemptsmany typesof o rganizationsfrompavingtaxes, including labor unions, chambersof com merce, social clubs, socialwelfareorganizations (suchas theNationalOr-ganization fo r Womenand theAmericanCivil L iberties Union)andfraternal orga-nizations (suchasindividual branchesofthe Freemasons andElkslodges).

Along with churches and charities,the IRS provides the coveted501(c)(3)

nonprofit status to scientific, literaryand educational organizations. Becausethey qualify as educational organiza-tions, most colleges anduniversitiesinthe United States, including those thathave generous endowments andcash-producing sports programs,arealso tax-exempt. O ther 501(c)(3)nonprofitsin-clude: Americans UnitedforSeparationof Church and State, American Atheists,American Humanist Association, Free-dom From Religion Foundation, Catho-lics for Choice, Feminist Majority Foun-dation, CenterforReproductive Rights,Ayn Rand Institute,the Gay &Lesbian

Alliance A gainst DefamationandMotherJones, theleftistmagazine.

IRS guidelinesfornonp rofits, wh ichare available on the agency's website, areoften m isunderstood. W hile many peopleuse these terms interchangeably,the IRSdefines politics asseekingtoinfluencethe election of candidates and lobbyingas seeking to influence legislation.

Accordingto the IRS,all501(c)(3)nonprofits cannot officially endorse oroppose candidatesforelectedofficeandmake financial contributionstopoliticalcampaigns. In 1964, theliberal Protes-tant magazine Christian Century lost itstax-exempt statusfor oneyearafteritendorsed President Lyndon Johnsonforre-election.

Nonprofits, however, can certainlypraise or criticize candidates, electedof-ficials, political parties and their standson public policy issuesandcontroversieswithoutspecificallytelling peopletovotefor or against them. Thisiswhat manynonprofits hav e been doing sincethepas-sage of the 1954 Internal Revenue Act,which added section 501(c) regulatingnonprofit organizationsto the taxcode.

The IRS recognizes that the heads ofnonprofits, including churches,canexer-cise their rights asprivate citizens with-out jeopardizing thetax-exempt statusoftheir organizations.The IRSalsoaffirmsthat 501(c)(3)nonprofitscanengageinsome lobby ingiflobbyingis not a sub-stantial partof the organization's regularactivities. The IRSimposesnoadditionalrestrictions on churches; itrequiresallregistered 501(c)(3)non profits, religiousand nonreligious, tofollowthe sameguidelines at the risk oflosing theirtaxexemptions.

The Catholic, Evangelical andMor-mon churches, which seemto be theonly

nonprofits thatareever accusedofviolat-ing IRS guidelines, shouldnotfeelthatthey have to scale back their activitiesinAmerican publiclifebecause theymaylose their tax-exem pt status. Since 1990,the IRS has revoked thetax-exempt statusof exactly one church. Perhapstheleadersof these churchescanstart ask ing wheth-er the many other nonprofits (especiallythe liberal activist ones) arefollowingthesame IRS rules that critics wishtoself-righteously impose onothers.

Dimitri Cavalli is a freelance writer iYork City.

OPINION