Is Black Lives Matter Putting its Fiscal Sponsors' Tax Exemptions at Risk?

I reported previously that Black Lives Matter Global Networks was campaigning openly against President Trump on its web site, and also in a CNN appearance by BLM co-founder Patrisse Cullors, while accepting 501(c)(3) tax exempt resources from fiscal sponsor Thousand Currents. BLM also has a donation page that goes through ActBlue Charities, which also is 501(c)(3) tax exempt. Thousand Currents recently handed off BLM's fiscal sponsorship to the Tides Foundation.

BLM Knows or Should Know it is Not Allowed to Campaign with 501(c)(3) Resources

Elle Reynolds' "BLM Co-Founder Appears To Violate IRS Laws On CNN" at The Federalist (June 26, 2020) reports, "The Black Lives Matter Global Network and the IRS did not return requests for comment." It is no surprise that the Internal Revenue Service did not respond because, as stated in the instructions for Form 13909, "Tax-Exempt Organization Complaint (Referral)," "Federal law prohibits the IRS from providing you with status updates or information about specific actions taken in response to the information you submit."

More to the point is however BLM's apparent failure to modify its behavior after Reynolds brought this issue to its attention. On or about August 20, more than seven weeks later, Cullors appeared in another video as reported by the Washington Post: "Patrisse Cullors: We can cheer Biden and Harris — but still must challenge their problematic past." Cullors does make remarks critical of the Democratic nominees but focuses explicitly on working to defeat President Trump: "I think we can call for Biden and Harris to be challenged for their past, while also being the cheerleaders for them to win the election Nov. 3. There are so many reasons why we must beat Trump. …Our work to defeat Trump also helps us defeat the white supremacists he has galvanized…" (When last I heard, by the way, white nationalist Richard Spencer endorsed Joe Biden who, to his credit, rejected the endorsement.)

The National Council of Nonprofits explains how fiscal sponsorship works. "The fiscal sponsor must first determine that serving as a fiscal sponsor is consistent with its mission (and does not jeopardize its own tax-exempt status)." The same organization adds that a "hot button" issue with the Internal Revenue Service is, "Not to participate or intervene in any political campaign on behalf of, or in opposition to, any candidate for public office…" This suggests that BLM's open campaign against President Trump is to the IRS what a waving red flag is to a bull.

If BLM did not know previously that it is not allowed to campaign while using 501(c)(3) resources, it knew or should have known this when The Federalist's columnist contacted it for comment. Cullors nonetheless went ahead and made the video that appeared on the Washington Post's web site and, as of August 27—about two months later—BLM's web page that calls openly for Trump's defeat is still online. "As disheartening as this was, we are reminded that the 2020 election is around the corner. We can make our voices heard by voting this Administration out of office." So is the page that compares Trump to "a Nazi trying to hide a neck tattoo."

The Tides Foundation itself explains further, "In a typical fiscal sponsorship relationship, a nonprofit organization confers its 501(c)(3) tax-exempt status to groups that are engaged in activities that serve the host’s mission, typically for a fee." This suggests that Tides is allowing BLM Global Network to use Tides' own 501(c)(3) status. While Tides' mission and vision statement says "We embrace risk," I doubt this extends to the potential risks associated with funding campaign-related activities with tax-deductible money.

This is emphatically not legal or tax advice from me, as I am not an attorney or tax professional. The Federalist however consulted Cleta Mitchell, "an expert on campaign finance regulation and tax laws governing charitable organizations." I am assuming from context that this is the same Cleta Mitchell who "… advises nonprofit and issue organizations, corporations, candidates, campaigns, and individuals on state and federal campaign finance law." The Federalist quotes her as saying that Black Lives Matter "must comply with all the rules that govern 501(c)(3) organizations" which it does not appear to be doing.

The IRS's "How to lose your 501(c)(3) tax-exempt status (without really trying)" adds explicitly, "All 501(c)(3) organizations are prohibited from participating in any political campaign on behalf of (or in opposition to) any candidate running for public office. The prohibition applies to all campaigns at the federal, state and local levels."

The IRS's "The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations" adds, "…public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity.  Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes. …voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention."

I was unable to find a sample fiscal sponsorship agreement at the Tides Foundation but they did host a white paper by Attorney Joshua Sattely. "The activities of all nonprofits, not just those practicing fiscal sponsorship, must operate in accordance with a stated tax-exempt purpose. If a project’s mission is not compatible with that of its sponsor, that sponsor is not serving its exempt status and its 501(c)(3) classification could be jeopardized."

The Internal Revenue Service might not be the only agency to have issues with BLM's anti-Trump campaign under the fiscal sponsorship of the Tides Foundation and previously Thousand Currents, both of which are headquartered in California. "California AG Becerra Hints at Crackdown on Nonprofit Political Activity" by Andrew Garrahan (May 2017) warned that Becerra intends to "… pursue nonprofit organizations that he believes 'abuse' their nonprofit status for political purposes." CalNonprofits adds that nonprofits can tell people to "vote with your mission" but also "A charitable nonprofit organization cannot tell people – directly or indirectly – for whom they should vote."

ActBlue and ActBlue Charities (the latter is the tax-exempt entity) are however in Massachusetts.

How BLM Could Deliver a November 3 Catastrophe to the Democrats

The Washington Post reports "The Democratic Party fully embraced the imagery and themes of the Black Lives Matter movement on its convention's first night Monday," thus tying its own fortunes to that of BLM. If it turns out that BLM Global Networks' anti-Trump campaign does in fact constitute misuse of 501(c)(3) tax exempt resources, this issue could expose the entire movement as a fraud on the trust of the American people and make the entire Democratic Party a party to the fraud in question just in time for Election Day. We must all publicize this issue as widely as possible to make this happen.

 

Civis Americanus is the pen name of a contributor who remembers the lessons of history, and wants to ensure that our country never needs to learn those lessons again the hard way. He or she is remaining anonymous due to the likely prospect of being subjected to "cancel culture" for exposing the Big Lie behind Black Lives Matter.

Image credit: Government logo // public domain

I reported previously that Black Lives Matter Global Networks was campaigning openly against President Trump on its web site, and also in a CNN appearance by BLM co-founder Patrisse Cullors, while accepting 501(c)(3) tax exempt resources from fiscal sponsor Thousand Currents. BLM also has a donation page that goes through ActBlue Charities, which also is 501(c)(3) tax exempt. Thousand Currents recently handed off BLM's fiscal sponsorship to the Tides Foundation.

BLM Knows or Should Know it is Not Allowed to Campaign with 501(c)(3) Resources

Elle Reynolds' "BLM Co-Founder Appears To Violate IRS Laws On CNN" at The Federalist (June 26, 2020) reports, "The Black Lives Matter Global Network and the IRS did not return requests for comment." It is no surprise that the Internal Revenue Service did not respond because, as stated in the instructions for Form 13909, "Tax-Exempt Organization Complaint (Referral)," "Federal law prohibits the IRS from providing you with status updates or information about specific actions taken in response to the information you submit."

More to the point is however BLM's apparent failure to modify its behavior after Reynolds brought this issue to its attention. On or about August 20, more than seven weeks later, Cullors appeared in another video as reported by the Washington Post: "Patrisse Cullors: We can cheer Biden and Harris — but still must challenge their problematic past." Cullors does make remarks critical of the Democratic nominees but focuses explicitly on working to defeat President Trump: "I think we can call for Biden and Harris to be challenged for their past, while also being the cheerleaders for them to win the election Nov. 3. There are so many reasons why we must beat Trump. …Our work to defeat Trump also helps us defeat the white supremacists he has galvanized…" (When last I heard, by the way, white nationalist Richard Spencer endorsed Joe Biden who, to his credit, rejected the endorsement.)

The National Council of Nonprofits explains how fiscal sponsorship works. "The fiscal sponsor must first determine that serving as a fiscal sponsor is consistent with its mission (and does not jeopardize its own tax-exempt status)." The same organization adds that a "hot button" issue with the Internal Revenue Service is, "Not to participate or intervene in any political campaign on behalf of, or in opposition to, any candidate for public office…" This suggests that BLM's open campaign against President Trump is to the IRS what a waving red flag is to a bull.

If BLM did not know previously that it is not allowed to campaign while using 501(c)(3) resources, it knew or should have known this when The Federalist's columnist contacted it for comment. Cullors nonetheless went ahead and made the video that appeared on the Washington Post's web site and, as of August 27—about two months later—BLM's web page that calls openly for Trump's defeat is still online. "As disheartening as this was, we are reminded that the 2020 election is around the corner. We can make our voices heard by voting this Administration out of office." So is the page that compares Trump to "a Nazi trying to hide a neck tattoo."

The Tides Foundation itself explains further, "In a typical fiscal sponsorship relationship, a nonprofit organization confers its 501(c)(3) tax-exempt status to groups that are engaged in activities that serve the host’s mission, typically for a fee." This suggests that Tides is allowing BLM Global Network to use Tides' own 501(c)(3) status. While Tides' mission and vision statement says "We embrace risk," I doubt this extends to the potential risks associated with funding campaign-related activities with tax-deductible money.

This is emphatically not legal or tax advice from me, as I am not an attorney or tax professional. The Federalist however consulted Cleta Mitchell, "an expert on campaign finance regulation and tax laws governing charitable organizations." I am assuming from context that this is the same Cleta Mitchell who "… advises nonprofit and issue organizations, corporations, candidates, campaigns, and individuals on state and federal campaign finance law." The Federalist quotes her as saying that Black Lives Matter "must comply with all the rules that govern 501(c)(3) organizations" which it does not appear to be doing.

The IRS's "How to lose your 501(c)(3) tax-exempt status (without really trying)" adds explicitly, "All 501(c)(3) organizations are prohibited from participating in any political campaign on behalf of (or in opposition to) any candidate running for public office. The prohibition applies to all campaigns at the federal, state and local levels."

The IRS's "The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations" adds, "…public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity.  Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes. …voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention."

I was unable to find a sample fiscal sponsorship agreement at the Tides Foundation but they did host a white paper by Attorney Joshua Sattely. "The activities of all nonprofits, not just those practicing fiscal sponsorship, must operate in accordance with a stated tax-exempt purpose. If a project’s mission is not compatible with that of its sponsor, that sponsor is not serving its exempt status and its 501(c)(3) classification could be jeopardized."

The Internal Revenue Service might not be the only agency to have issues with BLM's anti-Trump campaign under the fiscal sponsorship of the Tides Foundation and previously Thousand Currents, both of which are headquartered in California. "California AG Becerra Hints at Crackdown on Nonprofit Political Activity" by Andrew Garrahan (May 2017) warned that Becerra intends to "… pursue nonprofit organizations that he believes 'abuse' their nonprofit status for political purposes." CalNonprofits adds that nonprofits can tell people to "vote with your mission" but also "A charitable nonprofit organization cannot tell people – directly or indirectly – for whom they should vote."

ActBlue and ActBlue Charities (the latter is the tax-exempt entity) are however in Massachusetts.

How BLM Could Deliver a November 3 Catastrophe to the Democrats

The Washington Post reports "The Democratic Party fully embraced the imagery and themes of the Black Lives Matter movement on its convention's first night Monday," thus tying its own fortunes to that of BLM. If it turns out that BLM Global Networks' anti-Trump campaign does in fact constitute misuse of 501(c)(3) tax exempt resources, this issue could expose the entire movement as a fraud on the trust of the American people and make the entire Democratic Party a party to the fraud in question just in time for Election Day. We must all publicize this issue as widely as possible to make this happen.

 

Civis Americanus is the pen name of a contributor who remembers the lessons of history, and wants to ensure that our country never needs to learn those lessons again the hard way. He or she is remaining anonymous due to the likely prospect of being subjected to "cancel culture" for exposing the Big Lie behind Black Lives Matter.

Image credit: Government logo // public domain