The Catholic University of America

CUA Law Professor Roger Colinvaux published a June 1 op-ed in The Conversation entitled "Hillary Clinton is starting a social welfare group. What does that mean?"  See below
 

Hillary Clinton is starting a social welfare group. What does that mean?

The Conversation 
By: Roger Colinvaux
Date: June 1, 2017

Hillary Clinton recently announced that she was setting up a new group called Onward Together, offering few details other than that it will support an array of progressive causes, such as Swing Left, Emerge America, Color of Change, Indivisible and Run for Something. Unlike the Clinton Foundation, which is a charity, Onward Together will operate as a social welfare organization.

But what exactly are social welfare nonprofits, what’s the difference between them and charities and how involved in politics can they get?

As a law professor who formerly served as counsel to the nonpartisan congressional Joint Committee on Taxation, I am interested in the use of nonprofits to serve political purposes. I would like to explain why this kind of organization has become more popular – and more controversial.

What are social welfare organizations?

Social welfare groups are nonprofits formed to benefit the community in some way.

The largest social welfare groups, like AARP, the National Rifle Association and the local units of the NAACP, are familiar to most Americans. Smaller ones, such as firefighters’ associations, neighborhood civic associations and many PTAs serving specific schools, are more common. According to the National Center for Charitable Statistics, there are more than 83,000 social welfare nonprofits.

Social welfare organizations, sometimes referred to by the part of the tax code regulating them – section 501(??)(4) – have been around since 1913. The IRS and the courts sometimes treat this category as a catchall for nonprofits not made exempt by other parts of the tax code.

Social welfare groups rarely got much attention until the Supreme Court’s Citizens United decision. That 2010 ruling opened the door for 501(??)(4)s to be used as a channel for dark money, or anonymous political contributions, making them a magnet for controversy.

How do they differ from charities?

On the surface, social welfare groups are easily confused with charities, as defined by section 501(??)(3) of the tax code. Both are nonprofits, both are meant to provide a community benefit and both are exempt from paying federal income taxes. Even more confusing: Social welfare organizations and charities are often affiliated and share the same branding.

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Roger Colinvaux  

Professor Roger Colinvaux's
Areas of Expertise

Tax-Exempt Organizations

Charitable Deduction

Political Activities of Nonprofits

For additional information about our professors' areas of speciality, see Professor Colinvaux's faculty page.