State Officials Are Trying to Hinder Fund Raising by Advocacy Charities

Assaults on nonprofit advocacy rights don’t always originate on Capitol Hill. More and more frequently, the underpinnings of nonprofit free speech and advocacy rights are under attack at the state and local government levels, where few people notice or mobilize in protest. The efforts are often attempts by conservative politicians to squelch donations to organizations that oppose their policies.

The most recent example is in Minnesota, where the state commissioner of employee relations, Cal Ludeman, tried to kick the Community Solutions Fund out of the charity campaign for state workers. The fund, which solicits money on behalf of 47 groups that work on social-justice issues, has been a participant in the state’s campaigns for 18 years and through three state administrations — Republican, Democrat, and Independent — until Mr. Ludeman, who was appointed last year by Gov. Tim Pawlenty, decided that the fund was no longer eligible.

The members of the Community Solutions Fund are hardly out of the mainstream. Its members include the Greater Minneapolis Day Care Association, Jewish Community Action, the Minnesota Coalition for Battered Women, the Minnesota Senior Federation, Missing Children Minnesota, the Rondo Community Land Trust, the West Bank Community Development Corporation, West Side Community Health Services, and the Youth Farm Market, among others.

What about those groups made Mr. Ludeman reject the Community Solutions Fund but keep all 35 other fund-raising federations and 1,300 nonprofit groups that had solicited previously?

Mr. Ludeman said he discovered that a significant number of the members of the Community Solutions Fund are advocacy organizations. Those groups, he contended, didn’t fit the state guidelines, which require participating groups to devote a significant percentage of their time to providing direct services. Even though many of the groups in the fund do provide services, they also pursue advocacy campaigns — and Mr. Ludeman concluded that advocacy doesn’t count as charity.

The Minnesota case is not an aberration. For several years, state and local governments have attacked the rights of activist charities to participate in the governments’ employee-giving campaigns, usually under two kinds of pretexts:

• So-called paycheck-protection measures that forbid the use of any state resources (such as state payroll systems) for broadly defined political activities or that create onerous reporting and administrative procedures requiring donors to approve the political activities undertaken by the groups they support.
• Efforts like Minnesota’s to amend or reinterpret government guidelines to specifically make nonprofit groups that emphasize advocacy ineligible to solicit money from government workers.

Historically, paycheck-protection efforts have sought to prohibit fund raising by labor unions, but are frequently written broadly enough to be applicable to a wide range of nonprofit groups. For the most part, those initiatives have been defeated at the polls and in state legislatures, most recently in Oregon, Montana, North Dakota, South Dakota, and Utah. Those followed the defeat of paycheck protection in California in 1997.

At least five states have some type of paycheck-protection laws, though most nonprofit groups ignore them because the language applies to labor unions but not other types of tax-exempt groups. When it comes to restricting nonprofit rights, states that focus on regulating unions often end up limiting the rights of other tax-exempt organizations as well. Nonprofit groups that think they should sacrifice the rights of unions do so at their own peril.

Minnesota’s reinterpretation of eligibility guidelines falls into the category of conservative politicians explicitly disallowing advocacy organizations from participating in state campaigns. The same thing happened in Texas. In 2001 and 2003, the rules for the Texas State Employees Combined Campaign were reinterpreted by state government administrators to prohibit money raised through the campaign to be used for lobbying or litigation, both of which charities are legally allowed to pursue.

Texas, in effect, denied eligibility to social-justice organizations and environmental groups in favor of human-service providers. In the end, the state’s legislature allowed advocacy organizations that had previously been permitted to raise money in the campaign to remain eligible, but new restrictive standards remain on the books. Those standards make it easier for human-services groups and exceptionally difficult for advocacy organizations to gain the right to solicit state employees, and require special scrutiny of groups that pursue litigation before they can become eligible to participate in state-employee campaigns.

Two trends seem to be involved in these challenges to social-justice and environmental advocacy groups. One is simply the opportunism of conservative ideologues trying to silence their opponents by making it harder for them to raise money.

Just as pernicious is the side effect of these state campaign rules restricting participation to organizations that provide health care and human services and sometimes restricting participation to local rather than national and international charities. The result appears to be a legislative and bureaucratic effort to maximize charitable donations to provide human services that state governments are cutting as they seek to deal with budget shortfalls. The state campaign regulations in Alabama, Arizona, Delaware, Kansas, Kentucky, Oklahoma, and South Carolina, among others, make it clear that donations collected from state employees are meant to flow directly to social-service providers and to no other group.

Because these are state rather than federal actions, they are happening largely below the radar screen. Local nonprofit groups fight to keep their toeholds in state campaigns on a case-by-case, appeal-by-appeal basis. But what nonprofit groups need to do is work together to mount a full frontal challenge to the long discredited notion that advocacy is somehow less important and less beneficial than delivering services to the needy, or that advocacy can and should be divorced from service delivery at all.

In Minnesota, the immediate consequences of the Community Solutions Fund losing its right to solicit would be severe. The fund’s member organizations would lose not only payroll-deduction contributions from state employees, but also donations from many county and municipal charitable campaigns that make eligibility in the state campaign the prerequisite for participation in theirs. The total lost might be a half-million dollars of charitable giving for social change.

Equally significant would be the damage to nonprofit advocacy work. The nonprofit world should be on guard against all end-run efforts to clamp down on public-policy advocacy by charities. Just because this challenge hasn’t come from a federal policy maker or doesn’t involve big national nonprofit groups doesn’t mean that the nonprofit world should turn a blind eye to efforts to eat away at one of the most important responsibilities of charitable groups: advocating on behalf of all citizens.

Rick Cohen is executive director of the National Committee for Responsive Philanthropy, a nonprofit advocacy group in Washington.