Nonprofit Speech Rights | Center for Effective Government

527 Reform Legislation Heats Up in the Senate

On March 8, the Senate Rules Committee held a hearing to consider the 527 Reform Act of 2005 (S. 271). The hearing revealed the complexity of issues raised by the proposed extension of federal election regulations to independent political committees (527s). The testimony and questions from senators highlighted the likely consequences of passing the bill in its current form, including migration of soft money to 501(c) groups, who, unlike 527s, do not disclose donors.

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Faith-Based Roundup

House Vote on Jobs Act Would Codify Religious Discrimination, Opponents Await Senate Vote On March 3, the House approved H.R. 27, the Job Training Improvement Act, which would allow publicly funded religious agencies to hire and fire workers based on their religious beliefs. A coalition of organizations had urged the House to reject the bill unless it was amended to ensure that workers could not be discriminated against on religious grounds in federally supported social service programs.

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Independent Sector Report Urges Nonprofit Accountability

On March 1, Independent Sector's (IS) Panel on the Nonprofit Sector presented its Interim Report on nonprofit accountability, calling for voluntary action by nonprofits, increased enforcement by the Internal Revenue Service (IRS) and action by Congress, to Sen. Charles Grassley (R-IA), chair of the Senate Finance Committee. A hearing on proposals for legislative action is expected this spring. The Panel is expected to publish a final report before summer.

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Jones Continues to Misrepresent Rights of Houses of Worship

On March 2, Rep. Walter Jones (R-NC) formally introduced the Houses of Worship Free Speech Restoration Act (H.R. 235). The bill would amend the Internal Revenue Code to allow religious organizations to endorse or oppose candidates and engage in partisan activity as long as it is part of a religious event. Currently, all 501(c)(3) organizations, including houses of worship, are prohibited from intervening in elections. Supporters of the bill claim religious leaders are afraid to speak out on political issues.

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Coalition Opposes Bill to Regulate Independent 527 Groups

A new coalition has formed to oppose passage of the 527 Reform Act of 2005 (S. 271 and H.R. 513). The Coalition to Protect Independent Political Speech sent a letter to Congress signed by more than 100 nonprofits urging rejection of the bill, noting, “These organizations have contributed to the revitalization of American democracy, helping bring millions of people back to the process of governing the country by bringing them back to the polls.” The Senate Rules Committee has scheduled a hearing for March 8.

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OMB Watch Comments on Nonprofit Sector Working Group Draft Recommendations

OMB Watch Comments on the Work Group Recommendations to the Panel on the Nonprofit Sector (as posted for public comment on January 24, 2005) Submitted January 28, 2005 These comments on the “Work Group Recommendations” are submitted by OMB Watch, a nonprofit research and advocacy organization dedicated to promoting government accountability and citizen participation in public policy decisions. Thank you for the opportunity to comment on the recommendations.

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Analysis of H.R. 235, The Houses of Worship Free Speech Restoration Act

On Jan. 4, 2005, the “Houses of Worship Free Speech Restoration Act of 2005” was introduced by Rep. Walter Jones (R-NC) in the U.S. House of Representatives. The legislation is a revised version of a bill he has introduced in every Congress since 2001.

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NAACP IRS Audit

Prior to the November 2004 election, the IRS initiated an audit of the National Association for the Advancement of Colored People (NAACP), based on criticism of President Bush's policies. The NAACP claims the audit is politically motivated. Update: Aug. 31, 2006: IRS Drops Case Against NAACP. See below for more details and our press statement

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Inspector General Reports on IRS Review of Charities' Partisan Activity

The Treasury Inspector General for Tax Administration (TIGTA) has published its evaluation of the Internal Revenue Service’s (IRS) process for reviewing referrals alleging illegal political campaign intervention by charities. It describes the process used in detail, and said it found no indications that the random sample of cases it reviewed were handled inappropriately. The IRS requested the review after its audit of the National Association for the Advancement of Colored People (NAACP), announced shortly before the election, raised questions about political motivation.

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Grant Made to Politically Connected Group with Negative Rating

A politically well connected organization that promotes abstinence education received a major federal grant last fall under the president’s AIDS program despite its proposal having been rated “not suitable for funding” by an independent review panel. A Feb. 15 letter from Rep. Henry Waxman (D-CA) to Randall L. Tobias, head of the President’s Emergency Plan for AIDS Relief (PEPFAR), made public Waxman’s repeated requests for basic information on the administration of PEPFAR and demanded information on the unusual grant.

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