Nonprofits Are The New 527sUnderlying that Boston Globe story I just noted is a salient fact: outside groups are increasingly taking the form of 501(c)(4) groups this year.
What does it mean? Well, for the groups it means they can take any amount of contributions from virtually any source, including corporations, provided that their ads never cross the line into explicit advocacy — i.e. “vote for candidate X this election.” And the groups never have to disclose their donors, which makes everyone involved happy. That’s much more freedom than 527 organizations, like the Swift Boat Vets for Truth, had in the last election.
As David Corn reported earlier this year, the Supreme Court loosened the restrictions on 501(c)(4)s at the same time that the FEC was cracking down on 527s, making them an irresistible model.
Recently, a new 501(c)(4) demonstrated how free the groups are to operate. As we reported last week, a group called the American Future Fund has been running ads supporting Sen. Norm Coleman (R-MN). The ads have the look and feel of a campaign ad, so much so that the Minnesota Democratic-Farmer-Labor Party filed a complaint with the FEC charging that the American Future Fund is breaking the law by claiming that it is not a political committee.
Dave Kochel, a spokesperson for the group, said that AFF is not worried: “The law is pretty clear. As long as you’re not advocating the election or defeat of a particular candidate, and the ad is crafted in a way that’s informative on the issues, you’re on solid ground.”
Steve Weissman of the Campaign Finance Institute agreed. As long as the ad avoids certain buzzwords, doesn’t mention the election, doesn’t “build up the person more than the issue,” he said, then AFF’s ads were unremarkable for a 501(c)(4).
In a recent report, the Campaign Finance Institute sized up the growing field (pdf) of 501(c)(4) nonprofits on both the right and the left. So far, the Campaign To Defend America, with its McSame ad, has made the biggest splash on the left. The field is growing even faster on the right — in part, Weissman said, because Republicans tend to like the (c)(4) model because it allows corporate contributions and Republicans tend to be “more sensitive” about donor disclosure.
Will it be the American Future Fund, Freedom’s Watch, Common Sense Issues, the DCI Group’s successor to Progress for America, or some other as yet uncreated vehicle that will emerge as the Swift Boat Vets of the 2008 election? Stay tuned.
