A great deal of attention has recently been focused on nonprofit organizations associated with potential presidential candidates, particularly Pat Robertson's Freedom Council and Jack Kemp's Fund for an American Renaissance. Such scrutiny is healthy, and it means that candidates may well be forced to deal with the novel issue of federal election laws and where they cross IRS regulations governing tax-deductible organizations. Nevertheless, it misses what may be the real area of trouble. That is, the establishment of nonprofit corporations by less conspicuous senators and congressmen as well as by state and municipal officials.
Within the last month the Internal Revenue Service has begun to take steps in the direction of tighter enforcement and even though Sen. Gary Hart has just introduced the first bill to require financial disclosure of nonprofits associated with senators and congressmen. There is a great deal of work to be done to make sure that our distinguished and unique system of independent and free-standing philanthropic organizations is not abused by politicians eager to seek a new way to finance their careers.
At present, there are at least 20 senators and representatives who are closely associated with nonprofit charities. Most of them appear to do first-rate work. Because there is no system of cataloging nonprofit organizations according to whether or not they are connected to politicians, we have no idea of what the true number is. Similarly, there is no telling how many governors, mayors, state commissioners, aldermen, etc., have their own organizations. Lawyers familiar with the use of nonprofits by politicians estimate that there may be hundreds of such organizations around the country.
Recently, we have seen a lot of attention given to nonprofits associated with Robertson, Reps. Kemp and Richard Gephardt, and Sens. Bill Bradley, Hart, Edward Kennedy and Robert Dole. Also, in New York state, attention has begun to focus on the restoration of the governor's mansion, at present inhabited by Mario Cuomo; this, too, is a nonprofit effort. And in the 1984 election we saw a great deal of attention paid to the Arab League's funding of the Rev. Jesse Jackson's People United to Save Humanity.
But for all the TV and print coverage, most of it favorable, concerning these well-known politicians and preachers, we are missing the disclosure of the financial relationships between nonprofits and politicians and how those relationships influence votes.
Certainly the most important effort undertaken to date has been Hart's "Fair Foundation" bill. The bill calls for the creation of a five-member panel, made up of representatives from the IRS and the Federal Elections Commission, to see how nonprofits might be used for election-related purposes and then to recommend legislation to make sure such abuses do not occur.
In addition, it calls for the disclosure of receipts and expenditures of such organizations, thereby permitting the public to see whether there are trades of money for votes.
* Such legislation might be a model for state and municipal legislators who may soon be faced with the same phenomenon.
While the legislation does not cover political aspirants who are not currently in office, it at least puts pressure on those candidates who will not disclose the information.
On the whole, we ought to be encouraged at this point by the latest evolution in the political process. Nonprofit organizations associated with legistators may greatly improve the way that government works.
Two of the more conspicuous organizations -- Hart's Center for a New Democracy, which focuses on public policy questions, and Dole's Dole Foundation, which helps the handicapped, have received praise even from the other charities that work in the same area, something, alas, not easy for any nonprofit organization to get.
While no one can expect these nonprofits to compete with the success of, say, FDR and the creation of the March of Dimes, there is reason to be encouraged. But in the atmosphere of suspicion that has almost always surrounded legislators, it would be wise to encourage all steps that would bring as many of these nonprofits into the open as possible.
The writer served as president of the Franklin D. Roosevelt National Centennial Committee. He is currently participating in a study of nonprofit organizations.