Leff on the Johnson Amendment and Safe Space

From the West Virginia Nonprofit Association

Ben Leff has some interesting commentary in Tax Notes (subscription required) regarding the prohibition against campaign intervention and the SAFE SPACE petition for declaratory relief.  His current piece elaborates on some ideas he shared earlier this year.  Here is an excerpt:

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A Constitutionally Sound Strategy

As discussed earlier, the argument that the Johnson Amendment (or its current interpretation) violates constitutionally protected speech rights must be balanced against the government’s legitimate interest in the fairness and integrity of the campaign-finance system and the charitable sector. Challenges to the Johnson Amendment using a no-additional-expense theory, like SAFE SPACE’s, dramatically alter that balance. A court hearing the SAFE SPACE case might undervalue the government’s nonsubvention interest and repeal the Johnson Amendment or create an overly broad exception that fundamentally alters the campaign finance tax system, creating a loophole that would deeply distort and harm the nonprofit sector. So how should a charity’s right to make known its views on candidates be vindicated while preserving to the fullest extent possible the government’s interest in nonsubvention?

I have a solution that vindicates the core speech rights of charities while simultaneously maximizing the government’s interest in nonsubvention. Instead of just writing about it, I considered actually creating organizations that use, and therefore illustrate the use of, the alternate means structure referenced in Taxation With Representation and Branch Ministries. That structure involves pairing a section 501(c)(3) charity with an affiliated social welfare organization exempt under 501(c)(4). As described above, I believe that the Constitution requires that the charity be permitted to (1) deliberate and formulate a formal opinion about the candidates, endorsing one if it chooses; (2) communicate that endorsement to its affiliated non-charity; (3) control the affiliated non-charity to ensure that it properly communicates the charity’s views; and (4) have the non-charity attribute the endorsement to the charity (rather than to itself). So I planned to create organizations to do those things without destroying the Johnson Amendment. However, my friends and colleagues made a strong case that actually creating the organizations and applying for tax-exempt status could be perceived as a stunt that puts an unnecessary strain on the IRS and even conceivably the court system. So instead of actually creating the organizations, I am describing what I would have done here.

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darryll k. jones