Citizens United's Impact on the Non-Profit Sector

"OMG!" thought I.

"My mind has just been blown," said another lawyer in the back of the room.

Both of us had at the same moment realized how a video about candidate Hillary Clinton had upended non-profit law in the United States. We were in a breakout session at the annual Georgetown Law conference on tax-exempt organizations. The subject was Citizens United v. FEC, the recent Supreme Court case ruling (triggered by a 90-minute video critical of then-Sen. Clinton) that corporations may now use general treasury funds to advocate the election or defeat of

named candidates for office. One of the panelists, the highly regarded Frances Hill of the University of Miami, had just posited that the ruling paved the way for all non-profit organizations, including charities and churches, to spend resources advocating for political candidates.

Many minds, including mine, boggled. A reading of the opinion makes it clear that the current ban on 501(c) (3) organizations--the charities--getting involved in politics might not survive a future claim that the ban violates the organizations' First Amendment speech rights. Many charities with broader missions (safety, environment, health, etc.) probably would continue to avoid politics if only to keep donors happy, but some churches with narrower social goals would be free to make endorsements from the pulpit, organize congregations for named candidates and spend money for or against them. The political implications of such church activities would be enormous in light of the ongoing cultural divide in our society, which seems to influence so many candidate races. And it wouldn't take long for the appearance of new charities formed with the express purpose of politicking.

Such a development would blow away the up-to-now sacrosanct idea that taxpayers should not subsidize--through tax exemptions and the tax deductibility of donations--political and lobbying activities. This court, if asked, could conclude that the government's interest in avoiding the subsidy of such conduct is clearly trumped by the speech rights of the corporation. And what if a donor made a charitable donation on the condition that none of it is used for political purposes? A plausible argument could now be made that such a restriction, even a private one, would infringe the charity's speech rights. Does that mean the death of donor intent, at least in politics and lobbying?

What about political action committees after Citizens United? Some of them could disappear entirely. But all non-profits still have to be wary of being deemed political committees under remaining election law, in which case they would have to disclose their donors and their contributions. But who knows? With the current uncertainty even that rule could be seen as an impermissible burden on political speech.

My mind, though thoroughly boggled, nevertheless realizes the majority's opinion is based entirely on a legal fiction--that corporations are legally persons and imbued with the rights of persons under law. The courts granted corporations personhood so they could be sued under contract. It solved a big problem at the time and everybody thought it was a neat solution. The problem, of course, is that corporations are not natural persons. They don't die for their country--in fact, they don't die at all. They don't serve on juries. They don't vote, and they don't run for office. They are not people in the sense of the Constitution's preamble, which said the power of the government is derived from "We the people." Yet, these artificial "people" are given the same political speech rights as the rest of us.

This legal fiction may have once solved a logical conundrum for contract law, but today it promises to throw the non-profit sector into chaos.

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Bruce D. Collins

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