Nonprofit Civic Engagement, Election Administration Activities Under Congressional Scrutiny
Tax-exempt organizations have recently come under congressional scrutiny for their civic engagement and election administration activities. In the last Congress, both chambers of Congress investigated tax-exempt organizations’ grants in support of civic engagement and election administration, and the House passed multiple pieces of legislation seeking greater transparency in this area.
Although the influence of “dark money” in 501(c)(4) entities has been a bipartisan topic for several years, Republican members of Congress and conservative groups have recently shifted their focus to examining allegations that tax-exempt 501(c)(3) organizations have crossed the line into engaging in impermissible political activity, citing charities involved in voter engagement and election administration efforts as key culprits, according to an AP report.
Non-partisan civic engagement and election administration are two distinct categories. Examples of non-partisan permissible civic engagement activities include educating voters on the voting process, hosting a candidate forum and encouraging people to vote, according to a Nonprofit VOTE checklist (opens as a pdf). Election administration, on the other hand, is support for the non-partisan organizations, systems and research that help state officials operate secure, transparent, accurate and convenient elections regardless of what party is in power.
Election administration has in the past generally been seen as non-partisan — and uncontroversial. Nevertheless, the AP report noted the House Administration Committee in February 2024 held a hearing to investigate the impact of Mark Zuckerberg and Priscilla Chan’s commitment to invest $400 million in election access, since most of that investment flowed to local and state election offices in Democratic districts. Because of where the funds were focused, Republican Congress members argued that this spending violated the federal prohibition against using tax-deductible donations in ways that have the effect of benefiting one candidate or party. On the other side, Democrats argued that the funding was essential to address under-staffed and under-resourced polling places that serve traditionally underprivileged communities.
With respect to civic engagement, research has shown that non-partisan voter registration efforts have value beyond those undertaken by political parties (opens as a pdf). Notwithstanding, Republicans have criticized left-leaning foundations and donor-advised funds for steering big money donations and grants to nonprofits engaged in voter registration efforts that overwhelmingly favored Democratic strongholds.
Notably, much of the criticism from Republicans is targeted toward where the resources have been directed (perceived Democratic-leaning states) versus the activities themselves. Even while, in the 2024 election cycle, Elon Musk personally contributed more than $200 million to support AmericaPac, which he founded, to register and engage low-propensity voters. AmericaPac even ran a “$1 million a day” sweepstakes to reward registered voters who signed a petition committing to the PAC’s political vision and to work in collaboration with the Trump campaign (opens as a pdf).
As a result, 28 states since 2020 have passed legislation regulating the use of private funds to administer elections, many with exceptions for the donation of private buildings as polling locations or for in-kind contributions, such as food for poll workers. Last Congress, several new pieces of legislation were introduced to address perceived bias in the administration of election administration and civic engagement funding including the “End Zuckerbucks Act” advanced out of the House Ways and Means Committee in May 2024 under Rep. Jason Smith, the committee chairman and a Missouri Republican who has been a vocal proponent of limiting private funding in national elections.
Even if the Trump administration only takes action to clarify the rules around nonprofit political activity, tax-exempt organizations engaged in civic engagement or election administration work should be prepared for continued scrutiny from the 119th Congress around their grants and funding. Organizations should review their compliance programs to ensure that all activities funded are strictly within what is allowed under the law, as one error could be the focus of a future Congressional hearing.
Organizations may also want to consider possible engagement with the Trump administration or Congress, either individually or as an industry, to demonstrate why these activities are important and appropriate for tax-exempt organizations to undertake. At a minimum, it is worth tracking the bills that have already made it out of committee and to have a plan and team in place if your organization is targeted.
The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
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Dawn Smalls is a partner in Jenner & Block’s New York office. Dawn advises clients on complex policy, political and governance issues, and litigates high-stakes disputes that often have significant implications for their business or the broader political landscape. She also counsels clients on strategy when they are under regulatory, Congressional or public scrutiny. Dawn serves as a co-chair of the firm’s environmental, social and governance practice.
Illyana Green is an associate in Jenner & Block’s Washington, D.C., office. Illyana assists clients involved in appellate and trial litigation involving complex issues of commercial, constitutional and administrative law. She has authored or co-authored briefs in the U.S. Supreme Court, federal courts of appeals and federal district courts. Illyana also advises clients facing crucial strategic decisions at the trial-court level and litigates case-dispositive motions. She helps clients navigate regulatory challenges across a variety of substantive areas.
Jenner & Block Associate Lauren E. May is a graduate from the New York University School of Law, where she graduated magna cum laude and served as a managing editor for the law school’s Journal of Legislation & Public Policy. Lauren was also a finalist in the 2024 Orison S. Marden Moot Court Competition. She earned her bachelor’s degree from the University of Michigan in public policy.
