MOMS FOR LIBERTY: THE NON-PROFIT THAT'S MORE PROFITABLE THAN A LEMONADE STAND
Move over, Girl Scouts. There's a new non-profit in town, and they're making bank. Moms for Liberty, the conservative organization that's been making headlines for opposing school curricula that mention LGBT rights, race and ethnicity, critical race theory, and discrimination, has been accused of using their 501 (c) (4) non-profit status as a tax dodge to hide their real donors. But who needs transparency when you have a budget of $300,000 and former Fox News host Megyn Kelly on speed dial?
The Southern Poverty Law Center (SPLC) has labeled Moms for Liberty as an extremist group, but the moms themselves prefer to be called "passionate patriots" who just want to protect their children from the liberal agenda. And what better way to do that than by campaigning against COVID-19 protections in schools, such as mask and vaccine mandates? Because nothing says "I love my kids" like putting them at risk of a deadly virus.
But let's get back to the money. Moms for Liberty claims to be a grassroots organization funded by its members and supporters, but there's evidence that they receive financial support from other sources. Like Conservatives for Good Government, a conservative Florida political action committee. And let's not forget the fundraisers with conservative celebrities like Megyn Kelly, who was paid to appear at an event. Who needs a bake sale when you have deep-pocketed donors?
But here's where things get really funny. A Michigan attorney has filed a complaint with the Internal Revenue Service (IRS) against Moms for Liberty, alleging that the group is in violation of its non-profit status. The complaint questions whether Moms for Liberty is a political educational organization and whether it engages in political activities that are not its primary purpose. Because apparently, campaigning against LGBT rights and critical race theory isn't political enough.
To be fair, Moms for Liberty is allowed to participate in some political activities as a 501 (c) (4) organization, as long as that's not their primary activity. But they can spend up to 49% of their money on influencing elections, lobbying, or advocating for specific issues or candidates, as long as they don't directly endorse or oppose any candidate for public office. Which means they can't say "Vote for Trump" but they can say "Vote for the guy who hates LGBT rights and critical race theory."
And let's not forget the best part: as a 501 (c) (4) social-welfare nonprofit, Moms for Liberty doesn't have to disclose its donors. Which means we'll never know if they're getting money from big conservative donors or from that one guy who always shows up to PTA meetings with a briefcase full of cash.
But all jokes aside, the lack of transparency and accountability of 501 (c) (4) organizations is no laughing matter. Some have been accused of spending more than 50% of their money on political activities, engaging in partisan political campaigns, failing to report or underreporting their political spending or income, misrepresenting their activities or purposes, and coordinating with candidates or parties. And while the IRS has been trying to enforce the rules and regulations governing these groups, it's faced challenges and controversies along the way.
So what's the solution? Maybe we need more lemonade stands. Or maybe we need to rethink the whole concept of non-profits and political donations. Or maybe we just need to laugh at Moms for Liberty and hope that someday they'll see the irony in calling themselves a non-profit while making more money than a lemonade stand.
THE DEFT DIVE
Moms for Liberty is a conservative political organization that opposes school curricula that mention LGBT rights, race and ethnicity, critical race theory, and discrimination. It also campaigns against COVID-19 protections in schools, such as mask and vaccine mandates. The group has been labeled as an extremist group by the Southern Poverty Law Center (SPLC), a civil rights organization that tracks extremists. The SPLC defines an extremist group as an organization or collection of individuals that has beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics¹.
A Michigan attorney, whose name has not been disclosed, has filed a complaint with the Internal Revenue Service (IRS) against Moms for Liberty, alleging that the group is in violation of its 501 (c) (4) non-profit status. The complaint, which is private but was obtained by the Guardian, questions whether Moms for Liberty is a political educational organization and whether it engages in political activities that are not its primary purpose. The complaint also cites public posts endorsing Republican candidates, the group’s campaigning for Republican candidates, and links to partisan training materials².
To be tax-exempt as a 501 (c) (4) organization, an organization must not be organized for profit and must be operated exclusively to promote social welfare. The earnings of a 501 (c) (4) organization may not benefit any private shareholder or individual. A 501 (c) (4) organization may engage in some political activities, as long as that is not its primary activity. However, a 501 (c) (4) organization cannot participate or intervene in political campaigns on behalf of or in opposition to any candidate for public office³.
The IRS complaint against Moms for Liberty could result in an investigation that could take at least two years. If the group’s non-profit status is revoked, it could cause the group to re-characterize as a private organization, which would reduce its transparency and accountability².
Bing, 7/29/2023
(1) A Michigan attorney has filed an IRS complaint against Moms for Liberty .... https://www.bollyinside.com/news/politics/us-politics-moms-for-liberty-a-rightwing-parents-rights-group-faces-tax-complaint/.
(2) Moms for Liberty hit with tax complaint. https://news.yahoo.com/moms-liberty-hit-tax-complaint-144616792.html.
(3) Tax complaint filed against rightwing parents’ rights group Moms for .... https://www.theguardian.com/us-news/2023/jul/29/moms-for-liberty-irs-tax-complaint.
(4) 'Extremist' Moms for Liberty group hit with IRS complaint probing nonprofit status: report. https://www.msn.com/en-us/news/us/extremist-moms-for-liberty-group-hit-with-irs-complaint-probing-nonprofit-status-report/ar-AA1ew55Z.
(5) Moms for Liberty hit with tax complaint | Salon.com. https://www.salon.com/2023/07/29/moms-for-liberty-hit-with-complaint/.
(6) Moms for Liberty - Wikipedia. https://en.wikipedia.org/wiki/Moms_for_Liberty.
(7) Who We Are | M4L National - USA - Moms for Liberty. https://www.momsforliberty.org/about/.
(8) AASLH Statement on Moms for Liberty Meeting – AASLH. https://aaslh.org/statement-moms-for-liberty-museum-american-revolution/.
(9) Moms for Liberty - Ballotpedia. https://ballotpedia.org/Moms_for_Liberty.
(10) Moms for Liberty is part of a long history of rightwing mothers .... https://www.theguardian.com/commentisfree/2023/jul/06/moms-for-liberty-long-history-rightwing-activism.
(11) 501(c)(4) Status | Qualifications, Application Process, & More. https://www.patriotsoftware.com/blog/accounting/501c4-social-welfare-organizations/.
(12) . https://bing.com/search?q=IRS+501+%28c%294+non-profit+status+requirements+and+limitations.
(13) Types of Organizations Exempt under Section 501 (c) (4). https://www.irs.gov/charities-non-profits/other-non-profits/types-of-organizations-exempt-under-section-501c4.
(14) Federal Tax Obligations of Non-Profit Corporations. https://www.irs.gov/charities-non-profits/federal-tax-obligations-of-non-profit-corporations.
(15) What is a 501(c)(4) Non Profit Organization? - FindLaw. https://www.findlaw.com/legalblogs/small-business/what-is-a-501c4-non-profit-organization/.
(16) Social Welfare Organizations | Internal Revenue Service. https://www.irs.gov/charities-non-profits/other-non-profits/social-welfare-organizations.
(17) Frequently asked questions about hate and antigovernment groups. https://www.splcenter.org/20220216/frequently-asked-questions-about-hate-and-antigovernment-groups.
(18) Extremist Files | Southern Poverty Law Center. https://www.splcenter.org/fighting-hate/extremist-files.
(19) Antigovernment General | Southern Poverty Law Center. https://www.splcenter.org/fighting-hate/extremist-files/ideology/antigovernment-general.
(20) Southern Poverty Law Center - Wikipedia. https://en.wikipedia.org/wiki/Southern_Poverty_Law_Center.
(21) Far-right 'Moms for Liberty' listed as a hate group for first time. https://www.rawstory.com/bank/moms-for-liberty/.
(22) undefined. https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations.
(23) undefined. https://www.classy.org/blog/501c4/.
Moms for Liberty is a conservative political organization that opposes school curricula that mention LGBT rights, race and ethnicity, critical race theory, and discrimination. It also campaigns against COVID-19 protections in schools, such as mask and vaccine mandates. The group has been labeled as an extremist group by the Southern Poverty Law Center (SPLC), a civil rights organization that tracks extremists¹.
The group claims to be a grassroots organization that is funded by its members and supporters, but there is evidence that it receives financial support from other sources. According to some reports, Moms for Liberty has received financial support from Conservatives for Good Government, a conservative Florida political action committee. The group also hosts fundraisers with conservative celebrities such as former Fox News host Megyn Kelly and hosted a fundraiser in June 2021 that was sponsored by Florida Republicans running for office. In June 2022, heiress Julie Fancelli donated $50,000 to Moms for Liberty. As a 501 (c) (4) social-welfare nonprofit, Moms for Liberty does not have to disclose its donors².
The group's leaders dismiss speculation that big conservative donors are funding the group, even as the organization paid former Fox News host Megyn Kelly to appear at an event. The group's annual budget is $300,000². However, some critics have questioned whether the group is a political educational organization and whether it engages in political activities that are not its primary purpose. A Michigan attorney has filed a complaint with the Internal Revenue Service (IRS) against Moms for Liberty, alleging that the group is in violation of its 501 (c) (4) non-profit status³.
Bing, 7/29/2023
(1) Moms for Liberty - Wikipedia. https://en.wikipedia.org/wiki/Moms_for_Liberty.
(2) . https://bing.com/search?q=Moms+for+Liberty+funding+sources.
(3) Just who is behind Moms for Liberty? | Column - Tampa Bay Times. https://www.tampabay.com/opinion/2022/07/09/just-who-is-behind-moms-for-liberty-column/.
(4) Unmasking Moms for Liberty | Media Matters for America. https://www.mediamatters.org/critical-race-theory/unmasking-moms-liberty.
(5) Moms for Liberty - SourceWatch. https://www.sourcewatch.org/index.php/Moms_for_Liberty.
(6) The Right-Wing Money and Influence Behind Moms for Liberty. https://www.laprogressive.com/education-reform/supporting-moms-for-liberty.
(7) undefined. https://wusfnews.wusf.usf.edu/politics-issues/2022-07-18/moms-for-liberty-aims-to-expand-political-influence-bolstered-by-trainings-endorsements.
(8) undefined. https://www.tcpalm.com/story/news/2021/12/08/moms-liberty-florida-chapters-members-details/6355142001/.
A 501 (c) (4) organization is a type of nonprofit organization that is exempt from federal income tax under section 501 (c) (4) of the Internal Revenue Code. These organizations are typically referred to as "social welfare" groups, and they are supposed to be operated exclusively for the promotion of social welfare by primarily promoting the common good and general welfare of the people of the community¹. Some examples of 501 (c) (4) organizations are civic leagues, volunteer fire departments, homeowners associations, and certain advocacy groups³.
However, 501 (c) (4) organizations are also allowed to participate in some political activities, as long as that is not their primary purpose. This means that they can spend up to 49% of their money on influencing elections, lobbying, or advocating for specific issues or candidates, as long as they do not directly endorse or oppose any candidate for public office¹. Unlike political action committees (PACs) or super PACs, 501 (c) (4) organizations do not have to disclose their donors or sources of income, which makes them attractive for donors who want to remain anonymous².
This lack of transparency and accountability has led to some abuses and controversies involving 501 (c) (4) organizations. Some of the ways that these groups have been accused of abusing their tax-exempt status are:
- - Spending more than 50% of their money on political activities, which violates the requirement that social welfare must be their primary purpose².
- - Engaging in partisan political campaigns on behalf of or in opposition to specific candidates, which violates the prohibition on intervening in elections².
- - Failing to report or underreporting their political spending or income to the IRS or other authorities, which violates the tax laws and regulations².
- - Misrepresenting their activities or purposes to the IRS or the public, which violates the trust and confidence of the tax system and the society².
- - Coordinating with candidates or parties, which violates the independence and neutrality of 501 (c) (4) organizations².
Some examples of 501 (c) (4) organizations that have been involved in scandals or investigations are:
- - Crossroads GPS, a conservative group co-founded by Karl Rove, which spent millions of dollars on ads attacking Democratic candidates in the 2010 and 2012 elections. The group was sued by a watchdog group for failing to disclose its donors and was investigated by the IRS for its tax-exempt status².
- - Organizing for Action, a liberal group that emerged from President Obama's campaign operation in 2013. The group was criticized for accepting unlimited donations from wealthy individuals and corporations and for granting access and influence to its donors. The group was also questioned by the IRS for its tax-exempt status².
- - The National Rifle Association (NRA), a gun rights group that has been one of the most influential lobbying groups in the country. The group was accused of using its 501 (c) (4) arm to funnel foreign money into U.S. elections and to evade campaign finance laws. The group was also investigated by the New York attorney general for its financial mismanagement and corruption².
These are just some of the examples of how 501 (c) (4) organizations have been abused or misused by some groups or individuals. The IRS has been trying to enforce the rules and regulations governing these groups, but it has faced challenges and controversies along the way. In 2013, the IRS admitted that it had targeted conservative groups for extra scrutiny when applying for tax-exempt status, which sparked a political scandal and a congressional investigation². In 2018, the IRS issued new guidance that relaxed the reporting requirements for some 501 (c) (4) organizations, which raised concerns about further reducing transparency and accountability².
Bing, 7/29/2023
(1) IRC Section 501 (c) (4) Homeowners’ Associations. https://www.irs.gov/government-entities/irc-section-501c4-homeowners-associations.
(2) Types of Organizations Exempt under Section 501 (c) (4). https://www.irs.gov/charities-non-profits/other-non-profits/types-of-organizations-exempt-under-section-501c4.
(3) What is a 501(c)(4), anyway? - The Washington Post. https://www.washingtonpost.com/news/the-fix/wp/2013/05/13/what-is-a-501c4-anyway/.
A 501(c)(3) and a 501(c)(4) are both types of nonprofit organizations that are exempt from paying federal income tax. However, they have some important differences in their purposes, activities, and tax benefits. Here are some of the main differences between them:
- - Purpose: A 501(c)(3) organization operates for charitable, religious, educational, scientific, literary, public safety testing, fostering amateur sports competitions, or preventing cruelty to animals or children. A 501(c)(4) organization operates to promote social welfare, which can include a wide range of issues and causes¹.
- - Tax deductions: Donations to a 501(c)(3) organization are tax-deductible for the donor, which can be a powerful fundraising tool. Donations to a 501(c)(4) organization are generally not tax-deductible for the donor, except for some fire and rescue squads and veterans organizations².
- - Political activities: A 501(c)(3) organization cannot participate or intervene in political campaigns on behalf of or in opposition to any candidate for public office. It can only engage in limited lobbying and nonpartisan voter education. A 501(c)(4) organization can engage in unlimited lobbying and political activities, as long as that is not its primary purpose. It can also endorse, campaign for, or fund political candidates, but it cannot deduct those expenses as a business expense².
- - Reporting requirements: A 501(c)(3) organization must file an annual information return (Form 990-series) with the IRS and disclose its financial information and activities to the public. A 501(c)(4) organization must also file an annual information return (Form 990-series) with the IRS, but it does not have to disclose its donors or sources of income to the public².
Bing, 7/29/2023
(1) The Difference Between 501(c)(3) and 501(c)(4) Organizations. https://www.thetascgroup.com/the-difference-between-501c3-and-501c4-organizations/.
(2) . https://bing.com/search?q=difference+between+501%28c%29%283%29+and+501%28c%29%284%29.
(3) 501(c)(3) Vs. 501(c)(4): Differences, Pros And Cons - Forbes. https://www.forbes.com/advisor/business/501c3-vs-501c4/.
(4) 501(c)(3) Vs 501(c)(4)- Key Differences and Insights for Nonprofits. https://donorbox.org/nonprofit-blog/501c3-vs-501c4.
(5) What Is the Difference Between a 501(c)(3) and 501(c)(4)?. https://www.financestrategists.com/tax/501c3/501c3-vs-501c4/.
(6) undefined. https://www.perliskilawgroup.com/does-a-church-have-to-have-a-501c3/.
(7) undefined. https://www.smartcapitalmind.com/what-is-a-501c3.htm.
(8) undefined. https://www.thehatcfoundation.org/overview/.
(9) undefined. https://www.upcounsel.com/what-is-the-difference-between-501c-and-501c3.
