Nonprofit Campaign Spending Down Overall in 2008

Feb. 25, 2009, CQ TODAY ONLINE NEWS — Overall spending by nonprofits was down considerably during the 2008 campaign, even though some groups tripled their expenditures to help take up the slack.

Propelled largely by business organizations and labor unions, nonprofits spent more than $400 million to influence voters in competitive races, according to an analysis by the Washington-based Campaign Finance Institute, which studies money in politics.

The amount represents a decline in spending from the 2004 election, when nonprofits racked up approximately $486 million in campaign expenditures. But the study found that 501(c) groups tripled their expenditures on the 2008 election, spending nearly $196 million compared to an estimated $60 million in 2004.

The 501(c) groups, which included business coalitions, heavily favored Republican candidates. The top three spenders were the U.S. Chamber of Commerce with $36.4 million, Freedom’s Watch with nearly $30.2 million and Employee Freedom Action Committee, which spent $20 million.

The decline in nonprofit spending overall, however, was the result of 527 groups withholding fire. These unregulated, narrow interest groups spent $202 million during the 2008 election, down from the $426 million they shelled out in 2004.

The 527s first gained prominence in the summer of 2004 when Swift Boat Veterans and POWs for Truth ran a series of ads attacking Democratic presidential candidate John Kerry . Since then, the Swift Boat organization and other 527s have been saddled with six-figure fines from the Federal Election Committee for campaign finance violations. The fines may explain why 527s — which actually favored Democrats over Republicans last year — were less willing to commit big dollars.

Among the top 527 supporters of Democrats were: AFSCME Special Account, $30.6 million; Service Employees International Union, $27.4 million; and America Votes Inc. and Friends of America Votes with $24 million.

While the spending was down overall from four years ago, it will likely paying big dividends for the donors in the long run, according to Steve Weissman, associate director of policy at the Campaign Finance Institute.

“The problem is that the elected officials are grateful to these big donors and may oblige them when it comes to appointments and policies,” said Weissman. “Very few people can match the kind of money that comes from a corporate treasury, a union treasury or an individual wealthy donor.”