Of 3s and 4s…

Why is it so important to know if We Love Harbor Springs is a federally recognized non-profit organization under Section 501(c)(4) of the tax code?

The short answer is: It matters because of the rules they must follow as a 501(c)(4).

But first, let's talk about the non-profits we all know and love, because our community needs our charitable non-profits to serve those who struggle:

𝗖𝗛𝗔𝗥𝗜𝗧𝗔𝗕𝗟𝗘 𝟱𝟬𝟭(𝗰)(𝟯) 𝗡𝗢𝗡-𝗣𝗥𝗢𝗙𝗜𝗧𝗦

These are the non-profits that instantly come to mind when we think about service organizations. These organizations operate exclusively for religious, charitable, educational, or other specified purposes and that meet certain other requirements and are tax exempt under Internal Revenue Code Section 501(c)(3).

Donors to non-profit 501(c)(3) organizations can give tax-deductible charitable contributions, and the organizations can use that money to conduct a variety of direct service, advocacy, and civic engagement activities. 𝗪𝗵𝗶𝗹𝗲 𝘁𝗵𝗲𝘆 𝗰𝗮𝗻 𝗽𝗮𝗿𝘁𝗶𝗰𝗶𝗽𝗮𝘁𝗲 𝗶𝗻 𝗽𝗼𝗹𝗶𝗰𝘆 𝗮𝗱𝘃𝗼𝗰𝗮𝗰𝘆, 𝘁𝗵𝗲𝘆 𝗮𝗿𝗲 𝘀𝘁𝗿𝗶𝗰𝘁𝗹𝘆 𝗽𝗿𝗼𝗵𝗶𝗯𝗶𝘁𝗲𝗱 𝗳𝗿𝗼𝗺 𝗲𝗻𝗴𝗮𝗴𝗶𝗻𝗴 𝗶𝗻 𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝘀 𝗼𝗿 𝗲𝗻𝗱𝗼𝗿𝘀𝗶𝗻𝗴 𝘀𝗽𝗲𝗰𝗶𝗳𝗶𝗰 𝗰𝗮𝗻𝗱𝗶𝗱𝗮𝘁𝗲𝘀.

I want to highlight three federally recognized 501(c)(3)s non-profits in our community who are all nominated for the 𝗛𝗮𝗿𝗯𝗼𝗿 𝗖𝗵𝗮𝗺𝗯𝗲𝗿 𝗼𝗳 𝗖𝗼𝗺𝗺𝗲𝗿𝗰𝗲 𝗠𝗮𝗿𝘁𝘆 𝗩𝗮𝗻 𝗗𝗲 𝗖𝗮𝗿 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝘆 𝗔𝗺𝗯𝗮𝘀𝘀𝗮𝗱𝗼𝗿 𝗔𝘄𝗮𝗿𝗱. Your tax-deductible contributions to the 𝗛𝗮𝗿𝗯𝗼𝗿 𝗦𝗽𝗿𝗶𝗻𝗴𝘀 𝗙𝗼𝗼𝗱 𝗣𝗮𝗻𝘁𝗿𝘆, 𝗔𝗺𝗲𝗿𝗶𝗰𝗮𝗻 𝗟𝗲𝗴𝗶𝗼𝗻 𝗣𝗼𝘀𝘁 𝟮𝟴𝟭, 𝗮𝗻𝗱 𝘁𝗵𝗲 𝗙𝗿𝗶𝗲𝗻𝗱𝘀𝗵𝗶𝗽 𝗖𝗲𝗻𝘁𝗲𝗿 would be appreciated and would go to fund their tremendous work to support our neighbors, veterans, and those in need here in our community.

Now, a bit about these more political non-profits like what we are dealing with on the zoning issue...

𝗣𝗢𝗟𝗜𝗧𝗜𝗖𝗔𝗟 "𝗦𝗢𝗖𝗜𝗔𝗟 𝗪𝗘𝗟𝗙𝗔𝗥𝗘" 𝟱𝟬𝟭(𝗰)(𝟰) 𝗡𝗢𝗡-𝗣𝗥𝗢𝗙𝗜𝗧𝗦:

Non-profit organizations exempt under Section 501(c)(4) of the tax code have far fewer restrictions on their political activities than those who are 501(c)(3) organizations. But there are also some tradeoffs that come with 501(c)(4) status. Donations to 501(c)(4)s are not tax deductible as charitable contributions and the 501(c)(4) is not required to disclose the names of their donors. This is the primary reason 501(c)(4)s are connected with the issue of "Dark Money." Because donors can be hidden and the organization can be involved in politics, they have become a way to hide who gave, and how much was given, in support of the group’s political activities.

Born out of the landmark 2010 "Citizen United" Supreme Court case that granted corporations the same political speech protection enjoyed by individuals, 501(c)(4)s may engage in a loosely regulated amount of political campaigning. Their “primary purpose” must be social welfare, which is generally interpreted to mean that 𝗮 𝗺𝗮𝗷𝗼𝗿𝗶𝘁𝘆 𝗼𝗳 𝘁𝗵𝗲 𝗼𝗿𝗴𝗮𝗻𝗶𝘇𝗮𝘁𝗶𝗼𝗻’𝘀 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝗶𝗲𝘀 𝗮𝗻𝗱 𝗯𝘂𝗱𝗴𝗲𝘁 𝗺𝘂𝘀𝘁 𝘀𝘂𝗽𝗽𝗼𝗿𝘁 𝘀𝗼𝗰𝗶𝗮𝗹 𝘄𝗲𝗹𝗳𝗮𝗿𝗲 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝗶𝗲𝘀 𝗿𝗲𝗹𝗮𝘁𝗲𝗱 𝘁𝗼 𝘁𝗵𝗲𝗶𝗿 𝗲𝘅𝗲𝗺𝗽𝘁 𝗽𝘂𝗿𝗽𝗼𝘀𝗲 𝗻𝗼𝘁 𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗶𝘀𝘀𝘂𝗲𝘀. A 501(c)(4) 𝗶𝘀 𝘀𝘂𝗯𝗷𝗲𝗰𝘁 𝘁𝗼 𝘁𝗮𝘅𝗲𝘀 𝗼𝗻 𝘁𝗵𝗲𝗶𝗿 𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗮𝗰𝘁𝗶𝘃𝗶𝘁𝘆.

𝗧𝗵𝗲 𝗦𝘁𝗮𝘁𝗲 𝗼𝗳 𝗠𝗶𝗰𝗵𝗶𝗴𝗮𝗻 𝗽𝗿𝗼𝗵𝗶𝗯𝗶𝘁𝘀 𝗱𝗶𝗿𝗲𝗰𝘁 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀 𝗳𝗿𝗼𝗺 𝗮 𝟱𝟬𝟭(𝗰)(𝟰) 𝘁𝗼 𝗮𝗻𝘆 𝗰𝗮𝗻𝗱𝗶𝗱𝗮𝘁𝗲. 𝗣𝗲𝗿𝗶𝗼𝗱. 𝗙𝘂𝗹𝗹 𝗦𝘁𝗼𝗽. Additionally, if a 501(c)(4) 𝘀𝗽𝗲𝗻𝗱𝘀 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 $𝟭𝟬𝟬 𝘁𝗼 𝘀𝘂𝗽𝗽𝗼𝗿𝘁 𝗹𝗼𝗰𝗮𝗹 𝗯𝗮𝗹𝗹𝗼𝘁 𝗶𝘀𝘀𝘂𝗲𝘀 𝗶𝗻 𝗠𝗶𝗰𝗵𝗶𝗴𝗮𝗻, 𝘁𝗵𝗲𝘆 𝗺𝘂𝘀𝘁 𝗱𝗶𝘀𝗰𝗹𝗼𝘀𝗲 𝘁𝗵𝗮𝘁 𝘀𝗽𝗲𝗻𝗱𝗶𝗻𝗴 𝗶𝗻 𝗽𝗮𝗽𝗲𝗿𝘀 𝗳𝗶𝗹𝗲𝗱 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗖𝗼𝘂𝗻𝘁𝘆 𝗖𝗹𝗲𝗿𝗸.

Clear as mud yet?

Here's my way shorter take away:

Please continue to support the 501(c)(3) organizations in our community who do so much for so many, including: Harbor Springs Food Pantry, American Legion Post 281, and the Friendship Center of Harbor Springs

On the other hand, I urge you to ask questions of and scrutinize the public filings of groups claiming to be 501(c)(4) organizations. Some do incredible work to advocate for causes across the political spectrum. However, others are specifically organized to hide donors and engage in unethical activities to further their goals.

Want to learn more? I found this article interesting: https://tinyurl.com/33pc2ss4