One indication of how lax is enforcement of charitable funds-use laws is the fact
that so many groups openly operate in apparent violation of the law. The six
organizations described below have all registered with the IRS as tax-exempt
educational organizations, enabling them to fund their activities with
tax-deductible contributions. However, they openly tell the media and prospective
supporters that what they really aim to do is to change public policy, not educate
the public.
Under federal tax laws, an organization does not qualify as a charitable group
(501(c)3 organization) unless it is operating "exclusively" for charitable
purposes, which include education. An organization is not regarded as operated
exclusively for charitable purposes "if more than an insubstantial part of
its activities is not in furtherance of an exempt purpose." So, if a tax-exempt
educational organization engages in education as only an incidental part of its
overall mission, it is operating in violation of the law.
More specifically, an organization does not qualify as a charitable educational
organization if its primary objective is to preserve or change public policy in
such a way that passage or defeat of legislation would be required. Even if the
organization does no direct or grassroots legislative lobbying, it still violates
the law if its primary objective cannot be attained without the passage or defeat
of legislation and it advocates for its objective in any way, including through
public education. For more on the law.
The American Cause (Pat Buchanan's Group)
Rainforest Action Network
Federation for American Immigration Reform
International Action Center
American Values (Gary Bauer's Group)
MoveOn.org
1. The American Cause (Pat Buchanan's Group)
Total contributions received in 2000: $183,000
What they tell the IRS they do:
"Serve as an independent research and education institution and disseminate information to the public on current issues of public policy."
Source: IRS Form 990, p. 15
What they tell prospective supporters:
"Founded in 1993 by Patrick J. Buchanan, the American Cause is an educational organization whose mission is to communicate and advance conservative ideas and policies rooted in the principles of national sovereignty, economic patriotism, limited government, individual freedom, and traditional American values."
Source: Website
On its website, the organization lists its "priorities" with respect to the issues it addresses. These priorities, which involve changes in U.S. laws, not public enlightenment, include:
Push for an immediate ban on partial birth abortion.
Pass an act of Congress conferring constitutional rights of personhood on unborn children.
Abolish all inheritance and capital gains taxes on family farms.
Exempt family farms from OSHA and begin a regulatory revolution to restore sanity to federal regulation.
Abolish soft money contributions and outlaw the use of union dues for political campaigns.
Require disclosure of all contributions within 48 hours via the Internet.
Increase individual donor limits and index them to inflation.
Repeal the nickel-per-gallon gas tax of 1993 and consider temporary suspension of the entire 18-cent federal gas taxes until prices at the pump decline.
Source: Website
2. Rainforest Action Network
Total contributions received in 2000: $3.2 million.
What they tell the IRS they do:
"Public education to increase awareness to protect and conserve the world's natural resources, specifically tropical rainforests."
Source: IRS Form 990, p. 27
What they tell prospective supporters:
"Rainforest Action Network is not your typical band of tree-huggers. We work hard to combine sophisticated strategies with radical demands. On any given day our team could be engaged in everything from corporate negotiations to community organizing, from policy development to civil disobedience, from an interview with the Wall Street Journal to an interview with the Earth First! Journal."
Source: Annual Report, p.2
3. The Federation for American Immigration Reform
Total contributions received in 2000: $3.2 million.
What they tell the IRS they do:
"FAIR's primary exempt purpose is to educate the public about the economic, sociological, environmental, demographic, and other effects of mass immigration to the United States."
Source: IRS Form 990 , page 24
What they tell prospective supporters:
"The Federation for American Immigration Reform (FAIR) is a national, nonprofit, public- interest, membership organization of concerned citizens who share a common belief that our nation's immigration policies must be reformed to serve the national interest…FAIR advocates a temporary moratorium on all immigration except spouses and minor children of U.S. citizens and a limited number of refugees…Since it was founded in 1979, FAIR has been leading the call for immigration reform."
Source: Website
4. The People's Rights Fund (International Action Center/A.N.S.W.E.R)*
Total contributions received in 2000: Unknown
What they tell the IRS they do:
Since we were unable to locate tax returns for this organization we don't know how they've described themselves to the IRS.
What they tell prospective supporters:
"Make a tax-deductible contribution to help stop the war before it starts...A.N.S.W.E.R. (Act-Now to Stop War & End Racism) is a new anti-war coalition that was established with thousands of people. The coalition has organized major international rallies against war and racism. In the U.S., there was a national march and rally in Washington, D.C. in front of the White House on September 29, 2001 and protests on the West Coast and around the world. There were also International Days of Action in October 2001 Against War and Racism…As an extra incentive, your tax-deductible donation can reduce, even if by a little, the money available to the Pentagon."
* Tax returns for this organization cannot be located on the database of returns maintained by Guidestar.org. The organization's website explains that both International Action Center and A.N.S.W.E.R. are both projects of the People's Rights Fund, yet no organization by any of these three names is located on the Guidestar database or the IRS listing of nonprofit charitable organizations. Either the organization has failed to file returns or has done so using a name not identified on its website. Since the organization solicits tax-deductible contributions on its website, it must have been established as a 501(c)3 tax-exempt organization or is soliciting such contributions illegally.
5. American Values (Gary Bauer's Group)
Total contributions received in 2000: $430,000
What they tell the IRS they do:
"Enable Gary Bauer to educate the public by representing the values of the members by appearing on such broadcasts as "Fox Morning News", "NBC's "Today Show," "Crossfire," and National Public Radio among others."
Source: IRS Form 990, p. 15
What they tell prospective supporters:
"These pages outline the Vision of American Values. Here you will find brief descriptions of a few of the fundamental problems facing this country and how American Values plans to combat them. During this year we will make an aggressive effort to make progress on our shared beliefs and purpose for our great nation and its people."
Source: http://www.ouramericanvalues.org/vision_main.htm
The succeeding pages of the website lay out the agenda of American Values: The agenda includes, for example:
Eliminate the U.S. Department of Education. During the six years that I served in the Education Department one thing became clear to me: The Department is a hopeless bureaucracy that wastes billions of dollars, concentrates power in Washington, and does little to improve children's learning. Parents, students, teachers and education itself would be better off without it.
Ensure that Taxpayer Money gets to the Classroom. I will push for measures similar to the Dollars to the Classroom legislation that makes sure that taxpayers' money is spent directly on classroom expenses and not on costly bureaucratic programs.
I will support a Human Life Bill which will, pursuant to congressional authority under section five of the Fourteenth Amendment, guarantee to the unborn the equal protection of state and federal laws.
I will work with a bipartisan coalition in Congress to enact health care reforms based on the following principles…Employees who are dissatisfied with their employer-provided health coverage will be allowed to opt out and claim the tax deduction that would have gone to the employer for the purchase of health insurance…Individuals whose employers don't offer health coverage would be eligible for a tax credit for the purchase of health insurance…Allow individual workers in employer-sponsored flexible spending accounts (FSAs) for health care to roll over unused funds in the account at the end of the year without penalty.
The United States should scrap the present tax code and replace it with a simple, fair l6 percent flat tax that eliminates special-interest deductions and provides major tax relief for America's families. In addition, federal inheritance taxes should be abolished.
Source: http://www.ouramericanvalues.org/issues_main.htm
6. MoveOn.org
Total contributions received in 2000: Unknown
What they tell the IRS they do:*
"Served as fiscal sponsor for 48 not-for-profit community efforts; providing accounting, human resource administration, gift-receipting, expense payments and other services. These community efforts include philanthropic collaborations between foundations, community efforts responding to crises and urgent calls to action, projects of limited duration, and new incubating organizations. Examples of achievements include assistance to homeless youth, making classical music reviews available free to the public, the strengthening of public schools, and assisting low income frail seniors and other disabled persons with transportation for medical needs."
Source: IRS Form 990, p.2. http://63.136.234.78/2000/943/255/2000-943255070-1-9.pdf
What MoveOn tells prospective supporters:
"What does MoveOn do? When there is a disconnect between broad public opinion and legislative action, MoveOn builds electronic advocacy groups. Examples of such issues are campaign finance, environmental and energy issues, impeachment, gun safety, and nuclear disarmament. Once a group is assembled, MoveOn provides information and tools to help each individual have the greatest possible impact. During impeachment, MoveOn's grassroots advocates generated more than 250,000 phone calls and a million emails to Congress. We helped Congress come to understand the depth of public opposition to impeachment."
Perhaps the best indication that this group is not concerned with public education, but rather with making changes in public policy is its listing of press releases:
August, 2002
Don't Rush to War
April 24, 2001
Online Advocacy Group Takes on Energy Suppliers:
Grassroots Campaign asks Feds to Restore Stable and Reliable Energy
March 29, 2001
MoveOn.org Delivers 30,000 Messages of Support for McCain-Feingold:
"American's Worst Static-Cling Victim" Thanks Senator McConnell
for His Brave Stand against Static Cling
March 22, 2001
Constituent Emails Flood Congress in Support of McCain-Feingold Bill
15,000 Messages Delivered Today
March 12, 2001
MoveOn.org launches SaveCharity.org Petition to Preserve Estate Tax
Calls Repeal " A Knife at the Throat of our Nation's Charities"
November 1, 2000
$10,000 Reward for Getting Your Friends to Vote:
MoveOn.org Activists Drive VotePledge.org Effort
to Reverse "Vanishing Voter" Trend.
June 30, 1999
MoveOn.org PAC breaks records
in online fundraising for year 2000 congressional races.
May 11, 1999
On-line Gun control petition nets 60,000 signatures in one week:
Springfield, Oregon school shooting survivors make delivery
to Senate leaders as key amendments readied for floor debate
February 9, 1999
Anti-impeachment Republicans locked out:
Over 3,500 Statements from Anti-impeachment Republicans Delivered to
Doorstep of GOP Headquarters and to Republican Leaders
January 28, 1999
Continuing impeachment trial spurs thousands
to work in year 2000 election campaigns:
500,000 volunteer hours pledged
December 21, 1998
"We will remember" campaign targets impeachers:
Citizens pledge millions of dollars in first day
November 6, 1998
Internet organizing rocks election:
Virtual voting drive gets disaffected to the polls.
October 26, 1998
Constituents across the nation to urge Congress to end impeachment:
Will deliver "Move on" message in 226 districts and 44 states
on Thursday October 29th at noon
October 15, 1998
Internet political campaign rides anti-impeachment backlash:
250,000 signatures make biggest web petition ever
September 22, 1998
Disgusted Citizens organize on the Internet:
Urge Congress to Censure and Move On
Source: Website http://www.moveon.org/about.html#s5
* MoveOn operates under the wing of the San Francisco Foundation Community Initiative
Funds. Accordingly, tax-deductible contributions solicited by MoveOn are solicited
under the authority of the Funds' tax-exemption. The tax-exempt purpose
description provided here is that found on the Funds' IRS return.
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