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Nonprofit gag rule un-American

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By Gary Bass

Can you pat your head and rub your stomach at the same time?

On October 26, the House of Representatives, by passing the Federal Housing Finance Reform Act with a nonprofit gag provision intact, told nonprofits they are not in essence allowed do two things at once.

While aimed at housing groups, the provision sets a precedent that threatens the entire nonprofit sector.

It disqualifies nonprofits from receiving grants under a new Affordable Housing Fund if they engage in partisan or nonpartisan voter engagement activities, certain grassroots advocacy, or lobbying at any point from one year before applying through the grant period.

These restrictions do not apply to for-profit applicants.

Moreover, organizations that share resources, have overlapping boards or staff, or receive more than 20 percent of their budget from one entity are automatically “affiliated” under the House bill.

Once affiliated, the actions of the affiliated entity can disqualify the nonprofit from receiving money under the Housing Fund.

So, using office space or equipment donated by a private company that lobbies would disqualify a housing organization from receiving Housing Fund funding.

If a housing group receives more than 20 percent of its budget through state grants, it could also lose out since states must help register voters under federal law.

Conservatives advanced the provision under the wrong-headed logic that nonprofits should choose to either speak out on issues, providing nonpartisan voter engagement services, or provide services, in this case housing services.

This logic ignores the diversity of Americans represented by nonpartisan nonprofit organizations and the role nonprofits play in helping disadvantaged and underrepresented members of our society to engage in civic life.

This vital contribution to our democracy should be encouraged, not hindered.

Nonprofits are already barred from using federal funds to lobby or electioneer, and investigations have shown no pattern of abuse.

Nonprofits have long supported current laws and regulations that prohibit the use of federal funds, including matching funds, for lobbying or partisan political activities.

In other words, the provision “fixes” problems that don’t exist.

Conservatives argue that federal funds are fungible, and federal funding for services would free up nonprofit resources for advocacy or nonpartisan voter engagement activities, thus underwriting “political” speech.

However, this is not how nonprofits operate; money allocated for services does not move to advocacy upon receipt of a federal grant.

Service delivery requires partnership with government; cutting federal funding means cutting services, which may be what the provision’s supporters really have in mind.

This un-American, and possibly unconstitutional, gag provision awoke the nonprofit sector.

Now we must ensure this attack, which clearly contradicts our core democratic principles, ultimately fails.


Gary Bass is the founder and executive director of OMB Watch, a Washington-based research and advocacy group promoting government accountability and citizen participation.

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