Center Plans to Submit Comments to U.S. House Committee on Nonprofits’ Election-Related Activities

Last week, the U.S. House of Representatives Ways and Means Committee published a “request for information” about “political campaign intervention” by 501(c)(3) charitable nonprofits and 501(c)(4) social welfare organizations. Federal tax law prohibits 501(c)(3) nonprofits from engaging in partisan election-related activities like endorsing or opposing candidates for public office or making financial contributions to political campaigns. However, longstanding guidance from the Internal Revenue Service makes clear that 501(c)(3) organizations can participate in nonpartisan voter registration, voter education, and get-out-the-vote work.

The Ways and Means Committee’s request for information seeks feedback on a series of questions, which focus on:

1. Whether there is a need to update definitions and guidance on nonprofit “political campaign intervention;”
2. Potential new reporting requirements for nonprofits on their election-related activities, potentially including new reporting on permissible nonpartisan voter engagement activities of 501(c)(3) nonprofits;
3. Identification of tax-exempt nonprofits whose voter engagement work or other programs and services have the effect of favoring one candidate or political party;
4. Information about the influence of foreign nationals on the election-related programs of 501(c)(3) or 501(c)(4) organizations; and
5. Specific examples of 501(c)(3) nonprofits that have misused donor funds in ways that benefit nonprofit executives or are inconsistent with donors’ intent.

Comments are due to the Ways and Means Committee by September 4. The committee is accepting comments by email at: waysandmeansRFI@mail.house.gov. The Center plans to respond to the committee with comments that will highlight that:

1. The rules on permissible nonpartisan election-related activities for 501(c)(3) are already quite clear. Nonprofits have access to plenty of information about these rules, both in the form of formal guidance from the IRS (e.g., IRS Revenue Ruling 2007-41) and in the form of free, user-friendly materials from the Center and other partners (e.g., the Center’s answers to common questions about nonprofits and elections and many great resources from Nonprofit VOTE).
2. The vast majority of 501(c)(3) nonprofits that engage in election-related activities do so in a nonpartisan way with intent of maximizing voter participation in their communities and without expectation that their activities will benefit particular candidates or political parties.
3. While there is not a need for additional reporting by 501(c)(3) nonprofits on their election-related activities, the American public would be well served by greater transparency of donors to 501(c)(4) organizations (which are permitted to spend money on partisan politics).

Take Action: Help People Connected to Your Nonprofit Maintain Medicaid Coverage

During the COVID-19 pandemic, Congress created a temporary exemption (known as continuous coverage) from annual Medicaid recertification rules that normally require Medicaid recipients to provide verification of their income, family size, and other information to ensure they remain qualified. The Medicaid continuous coverage provision ended on April 1, and the NC Department of Health and Human Services (DHHS) began the process of recertifying Medicaid beneficiaries in North Carolina in June. Medicaid recipients need to contact their local Division of Social Services (DSS) office to ensure that it has their current contact information. While the process isn’t difficult, many North Carolinians stand to lose their Medicaid coverage if they don’t contact their local DSS office. Recent data suggests that a significant number of North Carolinians are losing their Medicaid coverage for “procedural reasons.” Your nonprofit may be able to help others in your community maintain their coverage by providing clear information to the people you serve.

DHHS originally projected that as many as 300,000 North Carolinians – many of whom receive services from nonprofits – could lose their Medicaid benefits if they don’t recertify. Many of these North Carolinians may have begun participation in Medicaid during the pandemic and may be unfamiliar with the recertification process. According to data from DHHS, in June and July alone, more than 68,000 North Carolinians lost their Medicaid coverage, including about 60,000 people who lost coverage for “procedural reasons.” Based on these trends, it’s possible that far more than 300,000 North Carolinians will ultimately lose coverage through this review, the vast majority for preventable “procedural” reasons. Some of the people losing their Medicaid coverage may qualify again once Medicaid expansion begins in North Carolina, but they will still have a gap in coverage for at least the next few months.

Your nonprofit can help make sure that the people you serve keep their Medicaid coverage by sharing information with them about the recertification process and the need to confirm their contact information with their local DSS office. Three nonprofits – The Charlotte Center for Legal Advocacy, Pisgah Legal Services, and Legal Aid of North Carolina – recently launched NCMedHelp.org to answer questions about NC Medicaid services, including eligibility determination. The website has direct links to each county’s DSS office and information about legal help and health coverage options for people who have lost their Medicaid coverage through this process.

Federal Government Shutdown Looming in October

The new federal fiscal year begins on October 1. That means that over the next five weeks, Congress needs to either:

1. Pass 12 appropriations bills to fund the federal government through September 30, 2024; or
2. Pass a stopgap spending bill known as a “continuing resolution” to provide temporary funding for the federal government and give the U.S. Senate, U.S. House of Representatives, and the White House more time to negotiate full details of an appropriation plan.

If Congress is unable to take either of these actions, large parts of the federal government will shut down beginning on October 1. Government shutdowns can harm nonprofits and the communities they serve by causing delays in nonprofits’ payments from federal agencies and creating disruption in the delivery of federal benefits.

While Congress and the White House agreed to spending levels in June as part of the Fiscal Responsibility Act, both chambers appear to be ignoring that agreement, with the Senate proposing significantly more spending, and the House asking for greater spending cuts. Negotiations are more challenging than usual this year because a small group of House members are poised to block any spending plan or continuing resolution that doesn’t include severe spending cuts and controversial policy provisions that are unlikely to meet the Senate’s approval.

The Center will let you know if there are opportunities in the next month for your nonprofit to take action to urge Congress to prevent a federal government shutdown. 

Governor Cooper Vetoes Election Legislation that Could Affect People Served by Nonprofits

Yesterday, Governor Roy Cooper vetoed a bill (S.747) that would make a variety of changes to state election laws. Several of these changes could affect nonprofits and the people they serve, including:

1. A provision that would prohibit nonprofits from providing funding to the State Board of Elections or to county election boards. In the past, legislators have expressed concern that some organizations – including nonpartisan 501(c)(3) nonprofits – could provide funding to local elections boards to bolster support in communities with strong partisan leanings. The bill provides that nonprofits can make in-kind donations of facilities to be used as voting sites and in-kind donations of food and beverages for poll workers and ink pens or personal protection equipment for polling places, but cannot make other in-kind donations (e.g., use of the nonprofit’s staff, resources, or facilities) for other purposes.
2. A provision that would eliminate the three-day grace period after Election Day for receipt of absentee ballots. This change would mean that absentee ballots would need to be received by the county board of elections by 7:30 p.m. on Election Day.
3. A requirement that voters who use same-day registration during Early Voting must submit a retrievable ballot so that election officials can confirm their address and eligibility to vote. An earlier version of the bill would have required people who register during Early Voting to submit provisional ballots, which could have led to more challenges of ballots from people who registered or updated their registration during Early Voting. Many nonprofits encourage their staff, volunteers, and clients to vote early.
4. A variety of changes to the state election statute that would treat Early Voting as a type of in-person voting rather than a form of absentee voting. While this change should not have much of a practical impact for North Carolinians who choose to vote early, it would make the laws around Early Voting a bit clearer and may mean that nonprofits that share information about Early Voting may need to tweak their wording if they refer to it as a form of absentee voting rather than in-person voting.

Both the NC Senate and NC House of Representatives approved the bill in party-line votes last week. Legislators are likely to override Governor Cooper’s veto when they return to Raleigh next month. 

Nonprofits Are Important Messengers about Obtaining Free IDs for Voting This Fall

In April, the NC Supreme Court issued a decision reinstating a 2018 law that requires North Carolinians to show photo identification when voting in elections. Many nonprofit organizations have expressed concerns that the voter ID law could make voting more difficult for many people served by nonprofits, particularly seniors, people with disabilities, and low-income citizens. Voter ID requirements will go into effect for this fall’s municipal elections. That means that many North Carolinians who don’t have a current photo ID will need to obtain one in the coming weeks to be able to vote in this fall’s municipal elections.

Nonprofit organizations have historically been among the most effective messengers for educating the people they serve about what steps to follow in order to vote because nonprofits are trusted by the people they serve. Nonprofits often serve people who don’t have photo IDs, so it is important for nonprofit organizations to share resources for getting free photo IDs with the people they serve. The NC State Board of Elections (NCSBE) recently explained that voters without photo IDs have two options for obtaining free photo IDs:

1. The NC Department of Motor Vehicles (DMV) offers free photo IDs that can be used for voting. Carolina Demography recently posted information about the 116 DMV offices in the state and the number of voters living in the vicinity of each of these sites.
2. Voters also can obtain free photo IDs from their county board of election. NCSBE explained this week that voters will simply need to provide their name, date of birth, and the last four digits of their Social Security number, and have their photo taken to get these IDs.

For more information, check out NCSBE’s 10 facts about photo IDs for voting. The Center will continue to share information about how your nonprofit can help people in your community understand voting rules as we get closer to this fall’s municipal elections. 

Current Center Member? Access your benefits or create your account.

Not a Center Member? Join now.

If a colleague forwarded this message to you, sign up for our emails.

Nonprofit Policy Update is North Carolina Center for Nonprofits' weekly newsletter of state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities and agenda, or contact David Heinen, Vice President for Public Policy and Advocacy, for more information.