In an attempt to increase transparency by placing new requirements on nonprofit groups that accept and expend “dark money” to engage in election-related communications without public disclosure, New York Attorney General Eric T. Schneiderman has adopted new regulations. Effective June 5th, tax-exempt organizations classified by the IRS as a 501 (c)(4) “social welfare” organization will be required to report the percentage of their expenditures that is politically directed towards federal, state and local elections. Any such group in New York that spends a minimum of $10,000 on state or local election advocacy is now required to file an Electioneering Disclosure Schedule with their annual financial report to the New York Attorney General’s Charity Bureau. Finally, contributions from a single donor that exceed $1,000 must be itemized and the donor’s name, the date of the donation, and the donor’s employer must also be disclosed.
Following the 2010 Citizens United ruling by the Supreme Court, which provided a loophole for donors to anonymously contribute significant amounts of money for political activities via 501(c)(4) organizations, spending on such activities accelerated. Attorney General Schneiderman’s goal has been to maintain transparency in the face of now unlimited opportunities for outside spending in elections.
The types of communication covered by the new ruling include any call for the nomination, election or defeat of a candidate or political party, the passage or defeat of a proposition or constitutional amendment, or any message that alludes to the name or likeness of a candidate.
Although the new regulation affects only nonprofits in the State of New York, other states have begun to examine the means by which 501(c)(4) organizations may now provide opportunities to make political contributions without disclosure.
Click here to hear more from Mr. Schneiderman on these changes.