Citizens United Unfair to One Million Corporations

Jack Shakely, former president of the California Community Foundation, takes a different tack (with a little wisecracking) on what to do about the Citizens United decision allowing for-profit corporations to spend unlimited funds on electoral campaigns:

A few weeks ago I received a breathless email (if such things exist) crowing that California had become the sixth state to pass a law demanding a constitutional amendment to overturn the 2010 Citizen's United Supreme Court decision on political campaign spending by corporations. Great! I thought: now all we need is two-thirds approval in both the House and Senate, then ratification by thirty-two more states, assuming the six stay on board. Good luck with that.

Then I thought about Citizens United in a new way.

Recently, Bloomberg columnist Michael Kinsley wrote in the Los Angeles Times that, like it or lump it, the Citizens United decision won't be overturned anytime soon. Any loose ends in that floorboard of hope were nailed down in June when the court reversed the Montana Supreme Court decision limiting corporate political donations in that state.

Kinsley argued that, just as Chief Justice Roberts did in the Affordable Care Act decision, the Citizens United decision was based on sound principles of law even if many don't agree with the result. The Citizens United decision not only made corporations people when it came to elections, it fixed some flaws in the now-overturned McCain-Feingold Act that favored media companies.

Rights for some or rights for all?

In defending Citizens United, Kinsley stated that "a right granted to one company should be granted to all."

Though eloquently stated and logical, sadly the Citizens United decision does not insure that rights granted to one company are granted to all. Not by a long shot. Two years after the Citizens United decision was handed down, there are still more than a million corporations that are prohibited from participating in our country's political process. These are America's 501(c)(3) nonprofit corporations.

Koch Industries can spend as much as it wants in state and national elections; the Girl Scouts can't spend a dime. The Montana copper bosses can throw money at candidates like drunken sailors on shore leave; if Montana Public Radio makes a single contribution, it will be fined and stripped of its tax-exempt status--the death pill for most nonprofits.

Just how serious is the IRS about keeping nonprofits out of the political arena? Here it is in their own words: "Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or opposition to) any candidate for elective public office...violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes." About the only thing they didn't mention was the blindfold and the firing squad.

Nonprofit corporations aren't people like for-profit corporations are

Apparently the IRS has a real jones against nonprofits being full citizens. It's hard to figure out why. (Ironically, Citizen's United is actually a nonprofit corporation, but a 501(c)(4), which means that contributions to it are not tax-deductible, as if the Koch brothers gave a damn).

Some will argue that nonprofit organizations receive government-subsidized charitable contributions, and therefore should be treated differently. But the timber industry is subsidized; the coal industry ditto and so are most energy companies. So why are Weyerhaeuser and Con Agra protected under Citizens United and Big Brothers/Big Sisters not? Where is the fairness? Where is the logic?

I'm not a big fan of the Citizens United Supreme Court decision. But at least we should agree that what is sauce for the goose should be sauce for the gander. If we are going to treat all corporations the same, let's really treat all corporations the same. Nonprofit corporations deserve a seat at the table.

Jack Shakely is president emeritus of the California Community Foundation and a senior fellow at the Center on Philanthropy and Public Policy at the University of Southern California. Prior to this, he was publisher of Foundation News for the Council on Foundations. And before that he served in the Peace Corps in Costa Rica and was an officer in the U.S. Army. If you're thinking, "He's done everything but write a book" -- well, he's done that, too. In fact, he's authored two novels: The Confederate War Bonnet and POWs at Chigger Lake, the former of which won an Independent Publishers Award in 2009.

Comments (10)

  • Go, Jack! I loved your OpEd saying that nonprofits should support getting rid of the charitable tax deduction. Unusual opinions always catch my attention.

    Oct 06, 2012
  • Anonymous

    Corporations are not human and the 1878 Supreme Court decision again made during a holiday season gave corporations clout. This is a government of,by and for the people....and we are giving corporations the equivalent of voting privileges---that is unconscionable.

    Oct 16, 2012
  • Anonymous

    Interesting point of view, but even if 501c3s were allowed to participate in electoral politics in the same way that for-profit corporations do, they simply don't have the financial resources to even the playing field.

    Oct 16, 2012
  • Anonymous

    Just because a not-for-profit organization receives tax-exemption doesn't mean they should be prohibited from lobbying or making contributions on behalf of specific candidates or issues? Jack Shakely in support of hundreds of thousands of churches weighing in and backing Pulpit Freedom? Wow!

    Oct 16, 2012
  • Anonymous

    501 (c) 3 corps are prevented from endorsing/supporting/promoting a candidate. Nothing prohibits them, including churches, from chiming in about issues and polcies.

    Oct 16, 2012
  • Anonymous

    In my opinion, we need to get money OUT of politics and Jack is suggesting that we provide another vehicle to add to the problem. Most 501(c) 3 organizations don't have the kind of funds it would take to level the playing field. Many churches do, and they already break the law - they recently had a day when they all blatantly did so from the pulpit and the IRS just let them slide...

    Oct 19, 2012
  • Anonymous

    You keep it up now, understand? Really good to know.

    Oct 20, 2012
  • Anonymous

    This is ALL important to religious non-profits these days as their individual and corporate rights, which align with Scripture, are being challenged. There is a double standard for some non-profits. If the church leans liberal, I find it interesting that you find candidates promoting themselves in pulpits and making political statements which are often shown on the So California TV networks. But, if a conservative church did that, they'd be in trouble. So "Pulpit Freedom Sunday" (Oct 6) was started to challenge this. If candidates or political parties are anti-Christian, then a church body should be able to support with contributions and criticism, those who try to take away our liberties.

    Oct 21, 2012
  • I'm glad a reader has raised the point about Pulpit Freedom Sunday, in which pastors (mostly conservative politically) deliberately endorse political candidates during their Sunday sermons (in 2012 about 500 pastors participated). They even send videotapes of their doing this to Congressional representatives to show that they are defying the law. The IRS has pointedly chosen to ignore Pulpit Freedom Sunday.

    Pulpit Freedom Sunday has made me think harder about what I think about religious and secular nonprofit support for candidates. Ultimately I think we hurt ourselves (both congregations and other nonprofits) by doing so.

    Thanks for writing, Anonymous. Jan

    Nov 12, 2012
  • Anonymous

    That insight would have saved us a lot of effort early on.

    Nov 18, 2012

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