Johnson Amendment

By September 6, 2017Nonprofit

Since 1954, the so-called “Johnson Amendment,” a portion of the provision in the Internal Revenue Code that lays out the basic requirements for Section 501(c)(3) organizations, has prohibited charities from implicitly or explicitly endorsing or opposing political candidates.

In May of this year, President Trump signed an executive order purporting to ease the Johnson Amendment restrictions. However, the executive order was more symbolic, than anything (which is even acknowledged by his own Justice Department) and has raised some confusion and concern about where we stand with regard to the prohibition that all charities, including churches, abstain from engaging in political activities. What is this all about?

Is this really about free speech?

No. The attempt to repeal the Johnson Amendment is rooted in the belief that churches are unable to communicate with their congregations in accordance with their beliefs because they cannot support or oppose candidates or parties. However, churches are able to conduct all sorts of activities that allow them to act in accordance with their beliefs, such as: nonpartisan voter education activities, nonpartisan voter registration drives, lobbying of their state and federal representatives regarding issues important to the church (within limits), speaking about and taking positions on any and all political and social issues. Churches are subject to the same restrictions as other public charities with regard to this issue – which is that they can almost always take positions on issues, we just don’t want them getting involved in electoral activity. From a policy standpoint, this makes total sense – I think that most people would agree that we don’t want organizations that receive the greatest public tax subsidies (in the form of income tax exemption and the ability to receive charitable contributions) using those subsidies to support or oppose candidates.

What proponents of the repeal don’t tell you is that many churches that seek the repeal and claim it is restricting their activities have in actuality pushed the boundaries of the Johnson Amendment by openly disregarding the restrictions, and have not typically seen any crackdown by the IRS on their tax-exempt status. In fact, since the year 2008, over 2,000 mostly evangelical Christian clergy have been openly and deliberately violating the law, without punishment.

Do all churches support the repeal?

No. Thousands of religious leaders have signed onto a letter letting Congress know that they are opposed to the repeal. Many churches actually appreciate the restriction because it allows them to more easily manage situations that could come up within their membership and their community when individuals want the church to endorse them or otherwise show support, and the church does not want to alienate members of their congregation by taking a position on an election.

What if the Johnson Amendment is repealed?

There are a few pieces of legislation that have been introduced that could limit the impact of or completely eliminate the language of the Johnson Amendment. It is expected that one of those pieces of legislation could get pushed through later this year with tax reform. Depending on which piece of legislation passes (if any) the impact could be wide ranging. For example, because churches are exempt from reporting requirements, unlike most other nonprofit organizations, donors could potentially make contributions without their names being disclosed and the contribution would be tax deductible without any real means to require transparency or oversee the use of funds. If the Johnson Amendment was repealed completely, the integrity of all nonprofits and foundations would be weakened. The current law protects nonprofits, and the significant public subsidy we provide to them, from partisan politics. Without the protection provided by the Johnson Amendment, the nature of charitable nonprofits could shift away from the important work they are doing to support disadvantaged communities and individuals, and toward a more divisive, politically fueled environment.