The Biggest Loser From Repealing the Johnson Amendment? Philanthropy

A megachurch in Ohio

A megachurch in Ohio

What did it take to get evangelical leaders to support a thrice-married businessman for president? A lot of promises, apparently. That would explain why Trump appointed Betsy DeVos, a billionaire philanthropist (and evangelical Christian) who knows little about public schools to be his secretary of education. It would also explain a draft executive order now circulating that would greatly expand religious freedom in ways that legalize certain forms of discrimination, especially against LGBT Americans.

And it would explain President Trump’s promise at last Thursday’s National Prayer Breakfast to “totally destroy” the Johnson Amendment. The 1954 law forbids churches and other 501(c)(3) tax-exempt organizations from engaging in official electioneering.

Raise your hand if you think Donald J. Trump knew what the Johnson Amendment was before he ran for president. Right, of course he didn’t. But he mentioned it often on the campaign trail, vowing repeal. Now he’s showing he hasn’t forgotten that promise.

Trump’s line on Thursday met with cheers from the religious audience, who have long chafed at its restrictions and resented the government’s oversight of what churches and their leaders can say or do politically.

But make no mistake: This is not mainly a fight over free speech. This is about political power, and the religious right’s ongoing drive to expand its influence with voters and elected leaders. More broadly, what’s at stake here is the separation of politics and philanthropy, along with public trust in the charitable sector. This sector, already viewed with growing uneasiness by many Americans at a populist moment, can ill afford to be seen as a conduit for partisan spending—which is exactly the risk, here.

Repealing the Johnson Amendment could potentially open the door to moving large amounts of electoral money through megachurches and, for that matter, any institution that meets the legal definition of a tax-exempt nonprofit “church.” (Currently, there are 300,000 Protestant churches in the U.S.)

As Inside Philanthropy has recently explored, plenty of money already flows from religious donors into policy and advocacy groups like Focus on the Family and the Family Research Council. The National Christian Foundation is a leading player here, as the top donor-advised fund on the Christian Right, with all its grantmaking circumscribed by laws governing 501(c)(3) organizations.     

But if the Johnson Amendment were repealed, religious donors looking to sway politics and policy would have new ways to do so while also getting a tax deduction. In effect, taxpayers would start subsidizing political spending.

An analysis by the watchdog group Citizens for Responsibility and Ethics in Washington described the likely result of repeal this way:  

Most of the dark money spending currently done by the non-charitable section 501(c) groups would almost certainly move to charities, as would at least some of the super PAC spending. The ability to deduct what would effectively be political contributions would be a massive incentive to contribute to charities that engage in politics, instead of to other section 501(c) entities. Even better, donors could still keep their contributions secret. Deductibility of contributions and secrecy similarly would motivate donors to switch from super PACs—and from candidates and political parties—to political charities.

While Trump cannot will the law out of existence with an executive order, Congressional Republicans have already taken steps to heed their leader’s call. In the Senate, Oklahoma Senator James Lankford introduced legislation calling for repeal.

“The federal government and the IRS should never have the ability to inhibit free speech,” he said in a Wednesday press statement. “People who work for a nonprofit still have constitutional rights to assembly, free speech, and free press.”

That sentiment, however, is far from universal. Within hours of Trump’s declaration, many in the larger nonprofit community sounded the alarm, warning that repeal would open the door to the politicization of charitable giving, with negative consequences.   

“Nonpartisanship is vital to the work of charitable nonprofits,” Tim Delaney, president of the National Council of Nonprofits said in a statement. “It enables organizations to address community challenges, and invites the problem-solving skills of all residents, without the distractions of party labels and the caustic partisanship that is bedeviling our country.” The Independent Sector also spoke out against repeal.

It seems unlikely that a repeal of the Johnson Amendment will happen anytime soon. Or ever. The entire philanthropic sector—which depends not just on public trust but taxpayer subsidies—has too much to lose, here. As it is, this sector is on thin ice, given how much tax-deductible money already flows to policy and advocacy organizations on both left and right that work hand-in-glove with partisan politicians. The tightening embrace between nonprofits and politics—which has grown more notable in just the past decade or so, as we’ve reported—has increased the chances of a populist backlash against philanthropy and especially against the charitable tax deduction. That possibility would rise considerably if the Johnson Amendment were repealed.

The journalist and philosopher G. K. Chesterton once remarked that you shouldn’t take a fence down until you know the reason it was put up. Indeed, far from deliverance, repealing the Johnson Amendment would likely open the world of charitable giving to a no-man’s land of unforeseeable consequences.