Power Grab - Jason Chaffetz Page 0,7

Named for the section in the IRS code that defines them, 501(c)(4)s have some latitude to engage in political activities (provided that engagement is limited and nonpartisan). By contrast, 501(c)(3) charities, which we’ll scrutinize in the next chapter, ostensibly have minimal ability to engage in politics.

Planned Parenthood received 80,000 donations in the first three days after the election. The American Civil Liberties Union (ACLU) reported receiving $7 million from 120 donors in the five days following Donald Trump’s victory. By contrast, the New York Times reported, the five days following President Obama’s reelection brought in just $28,000 from 354 donors to the ACLU. Around the same time that I was holding my last town hall in late January 2017, the ACLU reported receiving $24 million in donations over a single weekend due to the release of the Trump administration’s travel ban policy.

Nonprofit news outlets on the left also saw the bump. Pro Publica, best remembered by conservatives for publishing confidential tax information about conservative nonprofits requesting tax-exempt status in 2013, was among these. Pro Publica raised more money in the days following the Trump election—$750,000—than it raised in all of 2015. Inside Philanthropy reported similar large fund-raising bumps for the Center for Public Integrity, the Marshall Project, and NPR affiliates like WNYC.

This phenomenon dubbed “rage donating” lit up the nonprofit sector in the days and weeks following Hillary Clinton’s epic election loss. It would continue to varying degrees throughout the Trump presidency, ultimately enabling Democrats to take back the House in the 2018 midterm elections.

Nonprofits Take Center Stage

The growing significance of the nonprofit sector in our political and electoral landscape will potentially have far-reaching implications for future elections. Well-meaning campaign finance reforms that require donor disclosure, cap campaign donations, prohibit foreign financing, and preclude the use of government resources for partisan activity may appear successful on the surface. But much of the activity that is now illegal in the campaign world has shifted to the nonprofit world. While this is true for both parties, the effect is far more pronounced on the left.

In the progressive-dominated nonprofit sector, partisan political activity is helping swing the results of elections using the very methods Congress has criminalized on the campaign side. With no limits on donations, no disclosure of who is donating, no means of discerning whether foreign governments are participating, and with minimal oversight, a growing list of political nonprofit advocacy groups operate freely and openly in the partisan political space.

The last two election cycles have shown that the impact of nonprofit engagement in our political process has been profound. And it is growing, fueled by the tsunami of rage donations that have energized Democratic campaigns in the wake of the Trump presidency.

The same kind of energy might have propelled more significant fund-raising gains on the right in the heady days of the 2009 Tea Party movement had conservatives been able to access the kind of nonprofit infrastructure available to progressives. But many of the groups purporting to lead the Tea Party movement were formed after the fact and missed the big opportunities of the nascent movement’s early days. They were not established nonprofits with large endowment funds, high name recognition, or extensive databases of supporters and volunteers. Furthermore, as Tea Party groups began cropping up around the country from 2009 to 2012, many had difficulty getting up and running in the face of unexplained IRS delays approving their applications for nonprofit status.

By contrast, the Trump Bump came at a time when the nonprofit world was already dominated by established left-leaning organizations, many of which control multimillion-dollar endowments, enjoy steady revenue from government contracts, and have a long history of political activism.

Rage donating has been good for nonprofit advocacy groups under both the Obama and the Trump administrations, benefiting groups across the political spectrum, though disproportionately favoring progressives. In my experience, the phenomenon also has a downside that sometimes had a counterproductive influence on our work in Congress.

Motivated by a pattern of rage-driven fund-raising hauls, political advocacy groups on the right and left had more incentive to drive that rage than to calm it. Efforts to shame anyone found working across the aisle resulted in greater polarization in Congress. Any attempt at bipartisanship or compromise spawned a fund-raising campaign or what was called a key vote—a vote that would appear on an end-of-year scorecard marketed to voters as a means to judge lawmaker performance. This was good news for partisans and purists, but in a form of government that depends on finding