“No freedoms are more central to the American experience than the freedom of speech and the freedom to exercise religion.” – Commission on Accountability and Policy for Religious Organizations
A church should not have to give up a fundamental American right — like free speech — in exchange for a particular tax status. Yet that is the untenable current state of affairs as churches are in danger of losing their tax status if they endorse candidates or even if they speak out on social issues in a prohibited way during an election cycle.
A report recently issued by the Commission on Accountability and Policy for Religious Organizations (Commission) does not recommend that churches should endorse candidates. The Commission does believe, however, that each church should be free to make that determination for itself without fear of government reprisal.
The Commission was formed by ECFA (Evangelical Council for Financial Accountability) in 2011 at the request of Senator Charles E. Grassley (R-IA) to address some of the nation’s most challenging accountability and tax policy issues affecting churches. The Commission’s August 2013 report focuses on the controversial prohibition of political campaign activity in Section 501(c)(3), which as currently interpreted and administered by the IRS could cause a church to lose its tax-exempt status based solely on the words spoken by its religious leader during a worship service.
In a three-page introduction to the report, Commission Chairman Michael E. Batts notes the “disturbing and chilling” nature of the federal law. Although originally intended to prevent charitable organizations from participating in political campaigns, vagueness in official IRS guidance on the law has caused many religious leaders to remain silent on important moral and social issues of the day for fear of government reprisal: “Religious leaders are never quite sure where the lines of demarcation are, and the practical effect of such vagueness is to chill free speech — often in the context of exercising religion.”
Besides the law’s chilling effect on free speech, several other factors make the current state of affairs untenable. These include the IRS’s refusal to address deliberate attempts to challenge the law by a growing number of churches concerned with the law’s constitutionality, allegations and popular perceptions of inconsistent or selective IRS enforcement, and engagement in political communications within some faith communities where such activities are inextricably steeped in their history and culture.
Chairman Batts wrote, “Given the untenable mix of vagueness in the law, violations without consequences, limited and inconsistent enforcement, and the lack of respect for the law and its administration that inevitably results, something needs to change.”
The Commission’s latest report provides a new solution to Congress and the Treasury Department regarding the political expression quagmire — outlining an avenue which churches could utilize, if desired, to engage the issues and candidates of the day in a manner that is believed appropriate for that church. Brighter lines in this area would allow pastors to engage their congregations on issues of importance without fear of having the church’s tax-exempt status revoked.
While stopping short of a complete repeal of the existing 501(c)(3) prohibition on any activity that might support or oppose a specific candidate, the Commission recommends modifying the definition of what is prohibited by tax law to permit speech and other communications that are made in the ordinary course of a church’s tax-exempt activities. The recommendations would permit communications that do not incur additional costs, while maintaining a restriction on non-de-minimis expenditures. These recommendations would not modify the current prohibition as it relates to prohibiting campaign contributions or expending other church resources on political activity.
The 14 nationally recognized religious leaders comprising the Commission received a series of key inputs in arriving at these recommendations, including meetings with the leadership of the IRS Exempt Organizations Division, a special gathering of leaders from a number of African-American churches, media communications, public input, numerous position papers, presentations at national conferences, and a virtual town hall meeting. The Commission was assisted by 66 panelists representing every major faith group in the United States, legal experts in nonprofit and constitutional law, and thought leaders from the broader nonprofit sector.
Additional information on the Commission and a free PDF download of the complete report is available at ReligiousPolicyCommission.org.
Dan Busby is president of ECFA (Evangelical Council for Financial Accountability), an accreditation organization that sets standards for governance, financial management and fundraising/stewardship for churches and other nonprofits across the country.
Publication date: August 30, 2013