Hey, nonprofits: don’t be afraid to take a stand.

Cheer loudly for noise ordinances. Have a hog roast for Vegan awareness. Rally children for zero population growth.

Just don’t stand too close to a politician while you’re doing it.

That’s the takeaway lesson from a minor dust-up between the pro- and anti-development wings of Telluride politics.

This time, the battle ground was the details of tax law.

Last week, the chair of the San Miguel County Republican Party accused the nonprofit environmental group Sheep Mountain Alliance of violating the tax code by getting too deeply involved in town politics.

“They have always been a very political organization,” Harley Brooke-Hitching said of SMA. “More than environmental issues, they spend time on town council issues, and getting people elected and not elected.”

Specifically, she planned to send a letter to the IRS, questioning the propriety of an advertisement SMA ran in the newspaper. The ad, which ran before the November election, urged voters to reject a $5 million construction project on Colorado Ave.
Brooke-Hitching said she thought this was “really abusive of their tax-exempt status.” Maybe, she thought, SMA’s tax-exempt status would be revoked.

But according to the IRS’s Web site, SMA’s actions were within the tax code.
Nonprofits who are registered 501c3 occupy a very particular political space. They’re allowed to talk about politics, engage in debate, hold rallies, and take stands on legislation and ballot initiatives. But they cannot endorse a party or become even “indirectly involved in campaigns of political candidates,” the IRS says.

In other words, SMA could take out full page ad declaring itself opposed to heating sidewalks on every moral, ethical, and ecological level, but it could not say publicly that Terry Tice “looks good in a suit.”

Sheep Mountain co-director Hilary White said her group got involved in ballot issue 2A because it was, in part, an environmental issue. The energy needed to heat the sidewalks would have pumped more C02 into the atmosphere than the lungs of a shoveler would’ve.

“Our mission is to protect the environment of the San Juan Mountain region, and therefore when we feel that a ballot issue is going to have an effect on the environment we choose to get involved,” White said. “On 2A it just really came down to the concerns that there wasn’t a lot of thought put into the ecological considerations.”
(The ballot question, by the way, failed by a wide margin, 575-213.)
Said White, “501c3s cannot get involved with any candidates and as far as I know Sheep Mountain Alliance has never done that.”

Nonprofits account for an estimated 6 percent of the nation’s GDP, and cover the political spectrum, from Protestant churches to Wiccan covens. All of them risk losing their tax-exempt status if they express a preference for a political candidate or party.
Jeffrey M. Berry, a political scientist at Tufts University in Massachusetts who has written extensively about nonprofits, said there’s a very good reason for that prohibition.

“They operate with tax exempt funding, and because of that people would prefer that those funds not be involved with political campaigns, or candidates for office,” Berry said yesterday by phone. “There’s the danger that they’ll just become tax dodges for political campaigns.”

But Berry argues that nonprofits should be encouraged to participate in every other kind of political debate.

“Although middle- and upper-class individuals have many organizations that engage and mobilize them, nonprofits usually are the only organizations that work on behalf of the poor, those without health insurance, immigrants, the disabled, and most other marginalized constituencies,” Berry wrote in a paper called Nonprofits and Civic Engagement.