Tester introduces the SUN Act, gets real about disclosure by nonprofits

Sen. Jon Tester. Photo credit: Nicko Margolies/Sunlight Foundation

Today, Sen. Jon Tester, D-Mont., introduced the Sunlight for Unaccountable Nonprofits Act (The SUN Act). Not only are we at the Sunlight Foundation more than a little bit in love with the name, but we also love what the bill does. The SUN Act would at long last require that already public information about nonprofits be put online in a searchable, usable format. It would also require disclosure of large donors to nonprofits that elect to engage in political activities.

The SUN Act brings political spending out of the shadows. The bill ensures that tax-exempt organizations’ tax returns — their 990s — are made public, online and in a searchable format. These provisions are a legislative no-brainer. The information is already supposed to be made public, either by the IRS or, upon request, by the organizations themselves. In reality, the information is far from accessible. The IRS charges a hefty fee for data from 990s, which it provides in a non-searchable DVD format. Nonprofits often make requesters jump through hoops before disclosing their 990s. And even when they put the forms online (as Sunlight does here) the information is not in a usable format. The SUN Act embraces our mantra that public means online.

The bill would also require so-called social welfare organizations that specifically elect to engage in political activities to disclose donors who give $5,000 or more to the organization. Opponents of transparent, accountable government will cry foul, claiming the disclosure requirements will “chill speech.” But the provisions are narrowly tailored so that they in no way prevent political speech by nonprofits. Instead, the bill addresses the rampant abuse of the tax code since the Citizens United decision opened the door to ostensibly independent political spending by nonprofits. If a social welfare organization does not participate in politics, its donors can remain anonymous. On the other hand, a tax-exempt nonprofit that elects to spend its resources on politics must disclose its donors. An organization that wants to both serve the public interest and engage in politics also has the option of bifurcating its activities, disclosing only donors whose contributions are being used influence elections. By limiting disclosure to only those donors who give more than $5,000 to a politically active organization, the bill allows small donors to continue to remain anonymous while providing transparency and accountability where it is needed most.

Shadowy nonprofits spent at least $145 million on this year’s midterms. The public has the right to know who is behind that spending, but by exploiting the law, nonprofits engaged in election-related activities evade donor disclosure requirements that apply to traditional political organizations. The headline of a recent Washington Post editorial didn’t mince words, stating, “Undisclosed spending in elections threaten American democracy.” The piece cites evidence from a recent study by the Brennan Center for Justice that found that in 10 of the 11 tightest Senate races, dark money groups accounted for 71 percent of the spending on behalf of the winning candidate — with the 11th race headed for a runoff.

The voters in those states don’t know who provided the big bucks to help elect their senators, but you can bet the senators themselves know exactly who to thank for helping them secure their jobs. The SUN Act brings reality back to IRS disclosures and accountability back to government, recognizing that a functioning democracy requires informed voters.