The Rules of Engagement

A Voice for Nonprofits, by Jeffrey M. Berry with David F. Arons. Brookings Institution Press, 2003. 210 pp. $26.95 (hardcover).


Jeffrey M. Berry and David F. Arons strongly believe that leaders of American nonprofits must better represent the interests of their clients to government. In the authors’ view, public policy advocacy needs to be an important function within the organizations these leaders control – in other words, somebody on staff should have clear responsibility for effective contact with public officials; research and analytic capacity should be developed internally so that nonprofits bring fresh information to the table; and trustees need to understand, value and support such public policy work.

Berry and Arons also believe that the existing law governing nonprofit lobbying stifles meaningful participation in policy deliberations by the very organizations closest to government-sponsored efforts meant to help the poor, frail, elderly, unemployed, mentally ill, disabled and others most in need. They find the standard (set in 1934 and still on the books) that no nonprofit may enjoy tax-exempt status if “a substantial part of the activities…is carrying on propaganda, or otherwise attempting to influence legislation” to be terribly ambiguous. Further, they find that efforts by Congress in 1976 to provide an alternative to the uncertainty of the “substantial part” test (known as the 501h election) are hidden in the tax code and in its own sense confusing. Separate IRS filing procedures and two sliding scales on allowable expenditure limits, one applying to direct lobbying of legislators and another for grass roots lobbying, have combined to keep all but 2.5 percent of eligible nonprofits from exercising the 501h election. At bare minimum, the advantages of the 501h election and the procedures for compliance need to be better communicated to all nonprofit organizations, Berry and Arons argue.

Although A Voice for Nonprofits is within the mainstream of progressive opinion expressed in the many books, monographs and pamphlets on the subject of nonprofit advocacy published in recent years, it stands apart from all other works in the growing volume of literature on this topic. The bulk of these works can be categorized as handbooks aimed at nonprofit practitioners and their philanthropic funders. Typically, such useful manuals combine practical information with exhortations to increase participation in the policy-making process. The handiest of these will contain a competent overview of existing relevant law; answer FAQs about lobbying, litigation, policy research and public education; and list some dos and don’ts that enable nonprofits to advance policy agendas while remaining out of legal trouble.

A Voice for Nonprofits, in contrast to most other publications on the subject of nonprofit advocacy, is a treatise. This is not a “how to lobby” book. Rather, it is designed to both stimulate and inform the complex debate about the appropriate role of nonprofits in the policy process occurring within government, philanthropy and the entire nonprofit sector; it does so by introducing fresh information and analysis. Its conclusions are reached through the logical, cumulative chapter-by-chapter development of its main arguments.

The book recounts the explosive growth of the nonprofit sector during the 1970s and 1980s, which can be attributed to the transformation from a sector reliant entirely on charitable contributions to one contracting with government for direct provision of services – for health care, job training, home construction and a wide variety of other social services. The authors implicitly argue that these nonprofits should be encouraged to speak out on policies that affect their work, rather than be inhibited from having a voice.

Berry and Arons devote an entire chapter to federal regulations concerning lobbying by nonprofits. They note the inherent inconsistency of code containing the 501h election – designed to encourage lobbying, just as the “no substantial part” test vaguely discourages it. In this chapter, the authors document the shockingly large percentage of nonprofit leaders who are unaware of or misunderstand lobbying tax laws.

In another chapter, they detail the historic back-and-forth push and counterreaction between advocates and government officials on the Left and the Right. Berry and Arons exercise a judicious use of historical examples to contextualize today’s policies and contentions regarding nonprofit lobbying. For example, the authors describe the chain of events leading up to and following the Sierra Club’s 1966 loss of tax-exempt status and its subsequent restoration. The last link of the chain: the Sierra Club incident was well remembered by Congress 10 years later in deliberation over the Tax Reform Act of 1976, and it factored significantly in enactment of the 501h election.

Readers will find only a few housing and neighborhood programs specifically referenced in A Voice for Nonprofits. Nonetheless, as it pertains to the effectiveness of all nonprofits, this book is highly relevant to the ongoing work of improving urban and rural places.

Adding to the insights gained through the use of history, much is learned from a carefully written survey completed by over 1,700 nonprofit chief executives and subsequent interviews and focus groups. While this survey data represents truly new and important information, its description in narrative and tabular form makes this book a much tougher, though far more rewarding, read.

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