The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether.While the court's decision adjudicated the free speech rights of organizations falling under section 501(c)(4) of the federal tax code, the reasoning of the majority opinion, based on the First Amendment, raises a related question: Do tax-exempt non-profit organizations likewise now have First Amendment free speech rights that cannot be abridged by prohibitions on partisan political activity in section 501(c)(3) of the tax code?
The Chronicle of Philanthropy writes that, while the court's decision technically only applies to 501(c)(4) organizations, the issue is not settled as to whether or not it would also apply to tax-exempt, non-profit organizations:
Charities governed by 501(c)(3) — which are not affected by the court ruling — present a more complicated picture, legal experts say. Such groups are barred from any partisan political activity and may conduct only a limited amount of lobbying. The Supreme Court has previously ruled that such restrictions do not violate free-speech rights because charities benefit from tax-deductible contributions.In a separate opinion piece at the same website, Leslie Lenkowsky, professor of public affairs and philanthropic studies at Indiana University, continues the argument:
But the new ruling gives such weight to the First Amendment that some legal experts expect it may prompt a charity to challenge the existing rules. Although it would be a tough case to make, says Ronald Jacobs, a Washington lawyer, “it wouldn’t surprise me if someone tried it.”
[The] Supreme Court has opened the door for more extensive political activity by nonprofit groups, which may be a mixed blessing.
This has generally been obscured because the Supreme Court’s decision refers to election spending by “corporations,” which many understand as “businesses.” In fact, the opinion is using “corporations” in a legal sense, referring not just to businesses but also to labor unions and many other types of incorporated organizations, including nonprofit ones.
Many non-profit groups -- particularly the larger ones with deeper pockets -- are organized as corporations under state law, which is why Lenkowsky argues for more expansive implications of the court's decision.
I can imagine, however, that the counter-argument to expanded non-profit advocacy would be that non-profit institutions in effect obtain their tax-exempt status in exchange for surrendering some of their free speech rights -- a tax-exempt benefit that 501(c)(4) organizations do not enjoy. Free speech rights are not restricted, because the organization could always turn down the tax-exempt designation.
But it still raises interesting possibility: Might the Catholic Church now have the free speech right to endorse candidates in federal elections without losing its tax-exempt status as a 501(c)(3) non-profit?
If so, then Massachusetts might once again look politically like it did early in the 20th century when William Cardinal O'Connell exerted enormous political power. Imagine how different the abortion or casino gambling debates would play out if the church were free to engage in partisan political activity.