What Kinds of Organizations Influence Public Affairs?
The corporation is a contractual institution of civic life that’s commonly associated with for-profit business, that separates liability from the individuals running the business and the business as a separate legal “person.” A corporation also allows for separation between the assets and tax liability of an individual and the business, which allows these institutions to have longevity beyond a founder, or group of founders.
However, any formal organization that must report its finances to the government, not as or on behalf of an individual, is a type of corporation that should register with state and federal tax authorities. Depending on what your organization wants to do, or how it chooses to incorporate, there are often different rules to follow about how your finances must be reported, and what types of political activity you’re allowed to engage in.
For instance, for-profit businesses and unions can spend unlimited amounts of money influencing elections, but they may not directly contribute to federal election campaigns. The Federal Election Commission, often referred to as the FEC, publicly reports federal political contributions in their searchable, online database. After typing in the candidate’s name, you can view the total contributions to their campaign. If you then select “filing” it will give you a breakdown of individual donations, political party donations, PAC donations, donations from the candidate themselves, etc. The FEC is the agency responsible for regulating such contributions to make sure they’re lawful.
Aside from for-profit businesses, the following are the types of organizations that you will most commonly hear about or run across in the course of taking an interest in civic affairs.
Nonprofits
The term “nonprofit '' is used to describe many different types of organizations. 501(c) is the larger category that many of these organizations fall under, but there are actually about three dozen different types of nonprofits that congress has created. The IRS lists all of the types of nonprofits on their website, but below are some that come up most often.
Section 501 (c)(3): charitable organizations, churches. These organizations are tax-exempt
Section 501(c)(4): civic leagues, social welfare organizations, and volunteer fire companies.
Section 501(c)(5): labor unions
Section 501(c)(6): chambers of commerce
Section 501(c)(7): social and recreational clubs
Donations to a 501(c)(3) organization are considered a tax-exempt donation, but donations to a 501(c)(4) organization are not tax-exempt. This is partly because a 501(c)(4) group is permitted to engage in lobbying, while a 501(c)(3) organization must not do any substantial lobbying as part of its activities. A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status. WoLF is an example of a 501(c)(3) organization.
While we think of “lobbying” as simply influencing public officials, it is actually defined much more narrowly. Lobbying is an attempt to influence legislation, either directly or indirectly (e.g. through grassroots advocacy). Influencing regulatory bodies and participating in litigation are not lobbying, even if one of the parties is the government. There are also a lot of ways you can engage with lawmakers without it being considered lobbying. For example, educating policymakers and influencing policy development are not considered “lobbying” under the IRS rules. In its guidance, the IRS notes that nonprofit organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise discuss public policy issues in an educational manner that is not focused on influencing specific legislation.
501(c)(3) nonprofits can also work within the parameters of cause-related advocacy. For example, the following activities are not considered lobbying:
Providing legal aid to people whose cases fall under the primary mission of the nonprofit.
Efforts to make a government administrative agency change its policies, rules or regulations, or to adopt new ones.
Testifying before a legislative committee on a matter for which the organization has received a written request from the committee to testify.
Nonpartisan voter registration drives.
Contacting your representatives to explain your mission and share information about the work that your organization does.
On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention for a 501(c)(3).
A 501(c)(4), must also not be organized for profit and must be operated exclusively to promote social welfare. The organization must operate primarily to further the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). But in the case of this type of group, seeking legislation germane to the organization's programs is considered a permissible means of attaining social welfare purposes.
A 501(c)(4) social welfare organization may further its exempt purposes through lobbying as its primary activity without jeopardizing its exempt status, provided that the lobbying is related to the organization's exempt purpose. They may also engage in political campaigns on behalf of or in opposition to candidates for public office provided that such intervention does not constitute the organization's primary activity, but aren’t supposed to coordinate their communications with the campaign.
Political Parties
Political parties and candidates require money to operate effective campaigns, to be heard in increasingly expensive and complex media markets, and to reach voters across a much larger population than early US laws were set up to envision
There are often attempts to update campaign finance laws and regulations. Uncontrolled political spending can undermine the integrity of the democratic process, and lawmakers in what would become the United States started trying to rein in such undue advantage in the contest of political ideas as early as 1757.
The Federal Election Campaign Act of 1971, the Bipartisan Campaign Reform Act of 2002, and a series of federal court cases form the foundation of current federal campaign finance law.
Many believe that political parties have hijacked the inner workings of the election system and betrayed the intentions of the Founding Fathers. A 2011 law review article from Gilda Daniels, a professor at the University of Baltimore, touches on how states have slowly outsourced election administration to both major political parties, which often leads to voter suppression, among other illegal activities.
Political gerrymandering is the act of drawing political boundaries to favor a political party or one particular candidate for elected office. This is done to create districts that hold dense concentrations of voters who are favorable to their policies resulting in one party or candidate having political power over the others.
PACs, Super PACs, and 527s
A PAC, or “political action committee” is an organization created for the tax-exempt purpose of influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office, or office in a political organization. The election of Presidential or Vice-Presidential electors is also part of the exempt function of a political organization.
These committees can raise unlimited funds to spend on political messages and activities that are not connected to a particular candidate, but have to follow strict donation and spending limits in supporting candidates for federal office. In 2002, campaign finance law limits were set to how much an individual can donate to one candidate. It is currently set at $2,800 per individual for presidential candidates and the amounts are indexed to inflation.
A Super PAC is a type of committee that can support candidates, and can accept and spend unlimited donations to that end, but can’t either coordinate with or contribute to a candidate’s campaign.
After a 2014 Supreme Court decision, McCutcheon v. FEC, there is no longer a limit on how much one person can donate in total to all candidates, non-candidate political action committees (PACs), and party committees combined.
To get down in the weeds, 527 is the IRS tax exempt designation for a political organization subject to section 527 of the Internal Revenue Code (IRC). It is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for the organization.
Technically, all political parties, PACs, and 527 groups, are organized under IRC section 527, but only some groups are commonly called 527s, based on an expansion of the IRS rules for political committees in 1975.
Unions
The Oxford Academic Journal, Social Forces, published a 2013 study titled, “Union Membership and Political Participation in the United States.” The study uses three separate data sources on political behavior of American citizens from the 1970s through the mid 1990s: The Roper Social and Political Trends Dataset, the American Citizen Participation Study, and the General Social Survey.
The study’s findings conclude that the effect of union membership on political behaviors was quite significant. Union members were 18 percent more likely to vote in presidential elections than non-members, and 43 percent more likely to volunteer for an election campaign.
The study also noted that, “Union decline has implications for the composition of public life, shrinking the voice of those with less education. Unions are powerful engines of political participation, and their decline betokens a less democratic future for American politics.” U.S. union memberships peaked at 34 percent of the workforce in 1955 and was down to 10.3 percent in 2019.
Learn More: Most Americans View Decline of Union Memberships Negatively - PEW Research
Media
“The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter. But I should mean that every man should receive those papers & be capable of reading them.” - Thomas Jefferson, 1787
Though mainstream newspapers and broadcasters often aspire to remain formally neutral regarding elections, the media can influence votes by choosing which candidates to cover and by showing bias towards the candidate they prefer. Meaning, they may cover the candidate that they don’t like, but they will mainly cover negative things or put a negative spin on anything that candidate does.
Often though, supporters of any candidate can find an abundance of evidence that different reporters or media outlets don’t like their particular candidate. It’s rare to talk to the committed supporter of a candidate for office who thinks that the press has been fair to the person they chose to vote for, especially if that person loses an election.
But allowing robust criticism of our country’s leadership, or our would-be leaders, was established in colonial New York, in a 1735 court decision, as an important principle of an emerging, American system of government. That decision, won by Alexander Hamilton in defense of a printer charged with seditious libel for criticizing the governor, distinguishes our system from the 18th Century English law that then forbade any criticism of the government, even, and sometimes especially, if it were true.
The preservation of robust protections for free speech, and for freedom of the press furthers and informs public debate. Such speech, and debate, makes possible a society where the weight of public opinion and the will of a country’s citizens can act as a curb on the further abuses and excesses of power that occur reliably wherever people are also afraid to speak their minds.
The media, unlike political parties, were protected in the founding laws of the United States as an essential part of a functioning democratic republic. So while it’s become common to regard the industry as an annoyance, the spiraling layoffs and industry consolidation that have followed decades of relaxed ownership regulations should be cause for concern, not least because of how vulnerable it appears to have left reporters and editors to social media cancel culture.