Free Speech for Nonprofits?

Last week, the United States Supreme Court made a decision that could have huge implications for nonprofits across America, regardless of their missions.

In Citizens United v Federal Election Commission, No. 08-205, the Supreme Court relied on the First Amendment protection of free speech to say, according to Justice Kennedy who wrote the majority opinion, that Congress may not fine or jail “citizens, or associations of citizens (emphasis added), for simply engaging in political speech.”  In other words, with its 5-4 decision, corporations are no longer banned from spending money in political campaigns—whether it is taking out an ad explicitly endorsing a candidate or conducting a mail campaign praising a candidate’s particular position, for examples.  In fact, it would be outright unconstitutional to ban such activity.

What is particularly interesting in this case is that the plaintiff in the case is not a big oil company or a major Wall Street player or some other mega-billion dollar for-profit company; rather, the plaintiff is a nonprofit.  Citizens United had produced a 90-minute documentary that was apparently unfavorable to Hillary Clinton who was, at the time, running for President.  Citizens United lost its suit against the Federal Election Commission to allow it to show the documentary on an on-demand station and run TV ads for the showing.  Appeals brought it to the Supreme Court.

Many pundits are seeing the dark side of this decision:  corporations with their deep pockets will now have the ability to drown out the voices of the rest of us—the individual citizen and all of the rest of the groups that are “associations of individuals.”  And while I agree that is true, I am choosing to look at the bright potential of this decision.  Given that the decision is planted fully under the free speech protection of the First Amendment and extends it to groups of citizens (in addition to individuals), and the Fourteenth Amendment guarantees equal protection of the laws to all citizens—can we have one class of associations of citizens—corporations—receiving different treatment than another similarly situated class of associations of citizens—nonprofits?

As a non-lawyer, it seems to me that the question may hinge on whether these two classes of associations of citizens are truly similarly situated.  A huge question, I know.  But if corporations are going to be taking their unrestricted profit dollars and spending them, as they please, on endorsing political candidates, and without having to check with their shareholders to see if they approve of having a share of their dividends go to endorse specific candidates, shouldn’t nonprofit organizations be able to use their unrestricted dollars to do the same? And similarly, without restrictions from the government?  Or, are nonprofit associations of second-class citizens?

Does this Supreme Court ruling open wide the door to challenge the IRS’ ban on campaign activities by 501(c)(3) organizations? It would certainly seem so, and I doubt there will be a dearth of organizations willing to mount that challenge!

For more on this different perspective on the Supreme Court decision, check out OMB Watch.

This chart helps define what Citizens United means for nonprofits >