On August 12, AFJ hosted a webinar to explain what a newly passed law in California, SB 27, means for nonprofits that support or oppose ballot measures. We hosted the webinar because we hope that the changes in the law will allow more nonprofits to weigh in on ballot measures in California, now and in the future. I was joined by campaign finance attorney Melissa Mikesell, who explained what reporting as different types of committees looks like under state law, and Common Cause California Executive Director Kathay Feng, who discussed the issues involving campaign disclosure (or lack of disclosure) that SB 27 was intended to address.
Some key legal points from the webinar:
- Nonprofits can and should get involved in ballot measure advocacy! Be aware of the dual legal issues of:
o IRS rules that limit how much lobbying a 501(c)(3) can do, and
o California ballot measure disclosure laws, which may require an organization to become a committee.
o If your organization is active at the state level outside of California, see our State Law Resources.
- What type of committee an organization becomes depends on whether it raises money for its ballot measure work, or uses money already on hand.
- SB 27 has created an opening for some nonprofits to spend more than previously, before qualifying as a committee, which means there are fewer legal and procedural barriers for these organizations to engage around ballot measures. This applies to certain nonprofits that do not raise or accept funds earmarked for ballot measure activity.
- Raising money for ballot measure work will almost always result in becoming a committee that has to disclose contributors; SB 27 does not change that for nonprofits.
- Carefully think through your money sources, spending needs, how close you are to the election, and other similar issues early – ideally, before you start raising or spending money on ballot measures.
Although we focus on the aspects of SB 27 that apply to nonprofits engaging in ballot measure advocacy, note that the new rules also apply to other types of nonprofits – such as 501(c)(4) organizations and 501(c)(6) trade associations – supporting or opposing candidates.
In addition to the links above, AFJ has the following resources that may be helpful for 501(c)(3)s working with non-501(c)(3)s:
