The Rundown - When Nonprofits and Politics Collide - March 10, 2023
What happens when nonprofits turn advocacy and politics into their driving objective?
Today we are going to explore two stories. Two stories of nonprofits that have turned their service to society into a pivotal part of the political game. These political games tend to be highly localized and the impacts can be devasating to communities and those in which those nonprofits tried to serve.
Public Corruption in Ohio
On March 9th, former Ohio State Representative and House Speaker Larry Householder and former Ohio Republican Party Party Chairman Matt Borges were found guilty of racketeering. The two were found to have taken bribes from energy companies in return for favorable legislation.
The two men were part of a conspiracy in which a non-profit they created was used to funnel dollars to allied legislators and to stop efforts to repeal House Bill 6; the legislation that was passed at the benefit of a certain energy company in Ohio.
This nonprofit, Generation Now, is not a typical 501(c)3 non-profit organization. Rather it was established as a 501(c)4 organization. You can learn more about how this organization worked through this press release that was issued when Generation Now plead guilty to their role in the racketeering conspiracy.
501(c)4 nonprofit organizations are tax-exempt organizations recognized by the Internal Revenue Service (IRS) under section 501(c)4 of the Internal Revenue Code. These organizations are also known as social welfare organizations and are often established to promote the common good and general welfare of a community.
Unlike 501(c)(3) organizations, which are primarily focused on charitable activities, 501(c)4 organizations can engage in social welfare activities such as lobbying and advocacy, as long as these activities do not constitute a primary purpose of the organization. This means that 501(c)4 organizations can support or oppose political candidates and legislation, as long as these activities are not the primary focus of the organization.
501(c)4 organizations can be formed by individuals, businesses, or groups of individuals with a common interest. They can operate as civic leagues, chambers of commerce, or social clubs, among other forms. These organizations can also engage in a wide range of activities, including community development, economic development, and political education.
However, it's important to note that 501(c)4 organizations are not required to disclose their donors, which has led to concerns about potential dark money flowing into political campaigns. As such, there have been calls for greater transparency and accountability in the operations of 501(c)4 organizations.
501(c)4 organizations can’t receive donations from individual taxpayers that can be deducted from income tax liabilities. Also, these organizations don’t go through a formal approval process. Rather, these organizations simply sign a notification form with the Internal Revenue Service letting them know they exist.
Housing Development turns to politics in San Francisco
This story in The San Francisco Standard goes in depth about the non-profit housing corporation, the Tenants and Owners Development Corporation, or TODCO. The story begins describing what it is like living in a TODCO unit.
Ernest Archer was watching television a few months ago when he heard a “popping sound” and felt a bite on his back. The 71-year-old resident of Hotel Isabel, a single-room occupancy (SRO) building in San Francisco’s South of Market area, knew the feeling well.
Archer and other tenants of Hotel Isabel, which is run by the affordable housing nonprofit Tenants and Owners Development Corporation (TODCO), said it’s not uncommon for roaches and vermin to crawl through the building’s electrical outlets and that complaints to management often went nowhere.
“It’s terrible to wake up in the middle of the night with a mouse on your chest,” Archer said.
But the bite on his back last winter didn’t come from a rodent. Archer said it was a bullet that ripped through the wall of a neighboring apartment and lodged itself just below his left shoulder.
Over the years, TODCO has seen their revenues skyrocket as rents have increased. During this same period, they are spending more and more on salaries for key personnel; from about 7% in 2012 to 13% in 2021. The big change came in 2014, when TODCO became more politically active. It spent millions of dollars in local elections and spent money on lobbying at city hall.
What Can We Learn from this?
Nonprofits are often in the bullseye of the political class. These organizations are always with those assets politicians want. Lucrative contracts for critical social services are often awarded to nonprofits. These organizations also have earned a great deal of trust with their volunteers and clients and can provide a strong voter base in local elections.
But, nonprofits must be careful not be used by the political class. Just like nonprofits don’t exist to perform reputation rehabilitation for large donors, our organizations shouldn’t be treated like pawns in the political world.
The work we do is important and often transcends political differences; in my own experience, I have yet to meet a political candidate that is either “pro-poverty” or “pro-hunger”. In addition, there is a timelessness to our work. Political leaders come and go. Issues that are hot one year will be cold the next. But our work is always here and will always need to be done. If we are going to play the political game, we need to be careful to have the public, and their political representatives, have a clear picture on how our work is strengthening communities and not giving political advantage to one group or another.
The Weekly Notebook
A quick rundown of what I am seeing and hearing in the nonprofit world….
Now Hiring!
I have a nonprofit in Sidney, Ohio that has reached out to me looking for a new Executive Director. I can tell you that this a very strong organization that needs leadership that has strong entrepreneurial and staff management skills. If you have any interest, please drop me a line at pinnaclestrategiesltd@gmail.com and let’s talk!
Also, the local CASA/GAL agency in Troy, Ohio is looking for a new staff member as well. It’s a great agency with solid leadership. If you have interest, please let me know by sending an email to pinnaclestrategiesltd@gmail.com and I will share what I know.
The Habitat for Humanity affiliate serving Miami and Shelby Counties in Ohio is looking to a hire a Community Development Director. This looks like a great posiiton for anyone interested in helping build communities and affordable housing. The position is located in the growing community of Troy, Ohio. You can look at the listing here. Applications are due April 15, 2023.
Another organization in Troy, Ohio is also hiring. Troy Main Street, which is the major downtown development non-profit in the community, is looking for their next Executive Director. You can learn more about the position from their website at www.troymainstreet.org and scroll down to the “jobs” tab.
What Can We Work on Together?
Did you know that Pinnacle Strategies works individually with nonprofit and public sector leaders to help them solve problems, achieve goals and gain confidence in their roles?
Why?
Because, this work is hard and it’s often a lonely road. Our nonprofit and public sector leaders need people that they can talk to to get solid advice and encouragement to do the work that is in front of them. If you feel that this can be of value to you, or a member of your team, please reach out to pinnaclestrategiesltd@gmail.com and let’s talk.
Ready to Learn Something New?
One of the prettiest cities in the Midwest is Indianapolis and travelling there can open a perfect opportunity to sharpen your skills and meet new professionals in the field. I would encourage you to look at some of the offerings of The Fund Raising School at the Lilly School of Philanthropy at Indiana University’s campus in Indianapolis. The professional development school has great programming both on-line and in-person both in Indianapolis and at other sites across the country. Take a look at their course offerings here!
Online Learning Options from Texas A&M Announced
If travelling for professional development isn’t in the cards (or the budget), the Center for Nonprofits at Texas A&M University has some great offerings! I recently enrolled in one of their certificate programs and really enjoyed the online format and the online discussions that were developed. It was time and money well spent and I would highly recommend this program, especially for early or mid-career professionals. The next session begins in early February and you can learn more here!
Other Ways to Connect
Our coaching practice has openings and it has been a blast working with nonprofit leaders all across the country! If you are interested in working with me to get your nonprofit organization on a track to achieve the big missions you have, please reach out to me at pinnaclestrategiesltd@gmail.com.
Here are some other ways you can keep in contact with Pinnacle Strategies!
Check us out on our LinkedIn Page
Check us out on the Celebrating Leadership Facebook Page.
Want to help support this newsletter?
I hope you have found value in this newsletter. If you have found it valuable and want to help, the best thing you can do is “hit the heart”! By liking this post, you help other people interact with it. Also, sharing and commenting is very helpful as well. Thank you.