Two presidential campaigns are facing challenges about their ties to nonprofit groups. The Bush campaign's appeals to churchgoers to recruit from their congregations, and the Ralph Nader campaign's office rental agreement with a 501(c)(3) group founded by him, both raise the possibility that charitable or religious resources are being used for partisan purposes. Both are the subject of a complaint filed at the Federal Election Commission (FEC) that alleges illegal coordination between the campaigns and two nonprofits in Oregon working to get Nader on the state ballot.

On July 6, a federal court judge ruled that AmeriCorps must stop funding programs that place volunteers in Catholic schools.

Three campaign finance reform groups have filed a new complaint at the Federal Election Commission (FEC) against an independent political committee, America Coming Together (ACT), alleging violation of FEC rules on what activities must be paid for with hard money. Hard money refers to funds raised subject to the limitations of federal campaign finance regulations, which prohibit corporate donations and individual donations over $5,000. ACT has used soft money to pay for direct mailings urging voters to defeat President Bush and elect progressive candidates all across the country.

On June 21 the Senate Finance Committee published a Staff Discussion Draft of Proposals for Reforms in the Tax-Exempt Accounting and Best Practices that is "based on staff investigations and research as well as proposals from practitioners." The document notes that specific proposals are meant to generate comments and additional suggestions "as the Finance Committee continues to consider possible legislation." It focuses on changes for nonprofits, while other legislative proposals focus on deductibility issues and abuses by donors.