Most Tea Parties are 501(c)(4)’s – Prohibited from Endorsing Candidates

The Greater Phoenix Tea Party issued this clarification after the mainstream media tried to make hay over the fact several Tea Parties hadn’t endorsed JD Hayworth. Tea Parties that aren’t 501(c)(4)’s like TaxDayTeaParty, have endorsed Hayworth.

From IC Arizona and others.

For Immediate Release: Friday, March 5, 2010

To whom it may concern:

Due to misleading press reports, many Tea Party and other fellow conservative activists have misconstrued the position of the Greater Phoenix Tea Party in the area of candidate endorsements. First of all, the initial news story was written without the approval of our organization and this paper represents the position of our Board.

The facts are simple and clear. The Greater Phoenix Tea Party was formed as a 501c-4, the same as the Center for Arizona Policy, the National Tea Party Organization and other Constitutional conservative organizations. As such, we are bound by certain IRS rules and regulations, including the prohibition of endorsing candidates. We can – and will - follow the lead of many others in stating our position on issues and the position of various candidates on those same issues. That is voter education and falls within the guidelines we are required to follow.

Since the news story specifically dealt with the contest for United States Senator from Arizona, our position was presented in a manner to lead the public to believe we were opposed to one of the candidates – JD Hayworth. We are all aware of the slanted stories that pervade the Main Stream Media, and find it to be in conflict with the profession of journalism. In this case, their bias is personally offensive.

Our organization supports the sovereignty of our country and our state, supports free speech, private property rights, and opposes a larger and more intrusive government. Our members are already hard at work in the fight to restore those basic Constitutional principles to the people of Arizona. The main goal of the Greater Phoenix Tea Party is to increase the numbers of informed voters in both the Primary and General elections.

Again, as an organization we are not endorsing any candidate, however, as individuals we will continue our efforts on a daily basis to elect those who share our values. In that vein, we are and will continue to oppose candidates who have a track record in opposition to these values.

The Greater Phoenix Tea Party

Non-Profit Corporations 101.
From The Greater Phoenix Tea Party Patriots

Understanding a non-profit organization can be a challenging thing. Most people are used to operating in the corporate world, which can be much different. Understanding tax status, filing with the state, and donations can get confusing very quickly. Let’s take a look at some basics:

Entity – To be recognized as a non-profit organization, it is more than “not making a profit” that year. You have to create a legal entity, registered with the state of the base of operations. A document often called the “articles of incorporation” must be filled out and registered with the state. This establishes the trade name, the entity, and accountability to that state’s laws.

Leadership Structure – Different from a regular corporation, there is no one head figure that has a final say. The organization must create a board of directors, and each person has an equal vote on that board. Decisions regarding the entity itself and its construction and bylaws (not operational decisions) are passed by the board of directors for approval.

Board of Directors – The initial board of directors often is appointed by the founders of the organization. Here are some examples:
California Public Resources Code Section 5783-5783.13
Certified Organizational Ombudsman Practicioner (Article IV, Section 4.02)

The board sets in its bylaws provision for the organizing body to appoint the initial board of directors. Then, within the body of the bylaws details how often elections will take place for the new positions. Often board of directors are limited to under 7 members, and keep an odd number (in case of a tie). Any more than 7 and it is difficult to create a new organization due to the nubmer of voices and opinions. It can be done, however the practice is to grow the board of directors over time.

After the bylaws and board of directors is solidified, the organization works with the IRS to determine their tax status. You have heard of 501c3, 501c4, 527’s, etc. in discussing tax exempt status. It basically has to do with whether or not an organization can receive donations and whether the donations are tax deductable by the benefactor. If they are deductible, the IRS is very restrictive in the organization’s activities in politics, religion, etc. Other designations allow participation in the political process, but the donations cannot be deducted by the benefactor. Depending on whether the organization is involved in lobbying or elections, determines which type of filing is reported to the IRS. ANY violation of compliance puts the organization at risk of losing their tax exempt status. This is why it is important to use best practices in avoiding any unforseen problems with Uncle Sam.

This non-profit nutshell barely scratches the surface of non-profit practices, and it is intricate and complex. Not like the corporate world, the non-profit world levels the playing field so that no one person profits financially. For that, there are rules galore!