Report: Nonprofits more active in advocacy, education but work is still ‘shallow’

Caption: A woman takes a picture of workers at a voter registration booth on Indiana Avenue. (Photo/Tyler Fenwick)

By Tyler Fenwick | Indianapolis Recorder
May 13, 2021

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A report from Indiana University found more nonprofits in Indiana do advocacy and public education work than they did almost 20 years ago, though few dedicate a substantial amount of resources to that work, and there is probably confusion about what nonprofits are allowed to do as tax-exempt organizations.

The report, based on a survey from the Indiana Nonprofits Project, found 43% of nonprofits participated in advocacy or public education activities in 2017, the most recent year data was available.

That’s an increase from 27% the last time the survey was conducted in 2002, though Kristen Grønbjerg, director of the Indiana Nonprofits Project and one of the authors of the report, said 43% isn’t necessarily good or bad.

“It means that those kinds of activities are fairly widespread,” she said.

At the same time, the report calls some of the nonprofits’ work in this area “shallow” because only 38% reported advocating to policymakers. Most focus on the general public.

Part of the problem appears to be a combination of miseducation and hesitancy, Grønbjerg said, since the Internal Revenue Service (IRS) has many nonprofit classifications that come with various restrictions to preserve tax-exempt status.

The most popular is 501(c)(3), the section that includes most public charities. It’s a misconception that 501(c)(3) organizations can’t do anything political, but it is true that the IRS limits what they can do. They can’t, for example, get involved in a political campaign on behalf of (or in opposition to) any candidate for office, but they can take positions on public policy issues and even do some lobbying.

The report defines advocacy as “action taken in support of a cause or an idea,” including litigation, public education and lobbying.

Indiana Humanities, a 501(c)(3), reported using staff and volunteers to “influence foreign, national, state or local legislation” in its most recent filing with the IRS. What that means in practice, President and CEO Keira Amstutz said, is lobbying for federal funding.

Indiana Humanities receives a portion of its funding from the National Endowment for the Humanities. The organization, along with humanities groups from other states, takes a “hill visit” to Washington, D.C., to meet with Indiana’s congressional delegation and make their case for funding.

Amstutz said it could be possible to lobby for public policy issues, but the IRS says lobbying can’t be a “substantial” part of a 501(C)(3)’s activities.

“We have gotten very accustomed to the rules and knowing how to report,” Amstutz said.

Act Indiana, a 501(c)(4), grew out of Faith in Indiana, a 501(c)(3), in large part because of the debate over mass transit in Indianapolis.

Most 501(c)(4) organizations have to operate “exclusively for the promotion of social welfare,” according to the IRS. A 501(c)(4) can make lobbying its primary activity as long as it’s related to the organization’s mission.

“We realized in order to have a bigger say in the decisions that impact people’s lives, it requires difference vehicles,” said Shoshonna Spector, executive director of Act Indiana. Spector is also executive director of Faith in Indiana, but the organizations are separate.

Even though Act Indiana technically has more leeway when it comes to political activity, Spector said much of the work overlaps with what Faith in Indiana does because advancing democracy — through voter engagement, for example — isn’t about partisan politics.

“At the end of the day, our work is really focused on people,” she said. “People should have a say in democracy and the decisions that impact their lives.”

The Indiana Nonprofits Project survey included traditional public charities such as homeless shelters and museums but excluded colleges, hospitals, bank-managed trusts and public school building corporations.

It’s possible the years-old survey data doesn’t accurately reflect what nonprofits are doing in 2021. A worldwide civil rights movement that started in 2020 could cause nonprofits to increase the amount of advocacy and public education work they do, but Grønbjerg said it’s difficult to tell if that actually happened because of the COVID-19 pandemic.

A survey in May 2020 found nonprofits were struggling with basic operations. More than half curtailed or suspended programs, and 71% reported a loss in revenue from the beginning of March.

Central Indiana Community Foundation (CICF) is ramping up its focus on policy but mostly uses its sizeable influence to help organizations doing the “everyday work,” said Pamela Ross, vice president of opportunity, equity and inclusion.

Ross said the organization, a 501(c)(3), started focusing on smaller groups in 2020, including Indy10 Black Lives Matter, which has been active since the police killings of George Floyd in Minnesota and Dreasjon Reed locally.

For the most part, Ross said, the pandemic and civil rights protests didn’t create new problems. Home internet access, for example, was already an issue.

“We didn’t learn that these problems existed,” she said. “We learned that we would have to approach them much differently.”

Contact staff writer Tyler Fenwick at 317-762-7853. Follow him on Twitter @Ty_Fenwick.

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