Remember Bull Connor, an Alabama official who famously turned dogs and fire hoses on peaceful civil rights demonstrators in 1963? Do you recall his objection to the tax exemptions enjoyed by civil rights groups:
We shouldn’t allow desegregationists to be subsidized; not in our state, not on our dime!
At the time, the NAACP and other civil rights groups enjoyed tax exempt status, even in Alabama, but of course these groups held views with which a lot of Alabamans disagreed. So it’s not surprising Connor was outraged that these groups and their donors enjoyed a tax break.
Nor is it surprising that a few years before Connor’s brutal attacks on civil rights activists, Alabama officials went to court to force the NAACP to hand over lists of its members and donors. The state of Alabama wanted to intimidate those members and donors and to render future support less likely. That case went all the way to the U.S. Supreme Court and remains the leading constitutional case on the question of whether nonprofits must disclose such information.
Now I’ll be honest: So far as I know, Bull Connor didn’t say desegregationists should not be subsidized by tax exemptions. But a California legislator has recently said just what I “quoted” Connor saying, with discrimination substituted for desegregationists.
State Sen. Ricardo Lara (D-Long Beach) recently introduced and saw California’s senate pass a law to revoke the tax-exempt status of any youth group (read: “the Boy Scouts”) that discriminates on the basis of sexual orientation or “gender identity.” A similar bill has been introduced in the New York Senate.
One of Sen. Lara’s main allies, Equality California, was just as emphatic:
California is well within its rights to take away special tax exemptions from organizations that discriminate…. We owe it to all Californians to stop subsidizing intolerance with public money.
Media Matters for America, which generates vast tax deductions for billionaire George Soros, piled on. But others were deeply troubled by the proposed law. The Los Angeles Times editorial page, for example, deplored the Boy Scouts’ policy, but thought that yanking tax exemptions in this way is unwise:
If legislators can go after the Scouts for engaging in legal (though offensive) behavior, what group will they go after next?
Similarly, the distinguished legal scholar Walter Olson, a gay man who helped raise money for a Maryland same-sex marriage bill last year, quickly tweeted, “Bad, unfair move.”
I agree. This kind of attack on nonprofits and the right of association is wrong twice over. First, it assumes that there’s no difference between allowing a group to have a tax exemption and having the government subsidize that group with a grant. This assumption only makes sense if every penny you possess belongs to you on the government’s sufferance; so if the government lets you keep some of your money and give it to a nonprofit, the government has sent its money to the nonprofit. This ridiculous idea contradicts four centuries of Anglo-American law and is totalitarian.
Second, persons who attack unpopular groups’ tax exemptions fail to understand that the basis of tax exemption, in our law, rests not on whether the government, or a majority of citizens, agree with any particular group’s viewpoint. No, tax exemptions in section 501(c)(3) of the tax code rest on the purposes for which the group is organized. It is exempt if
organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition … or for the prevention of cruelty to children or animals….
In the current controversy, my sympathies are with the Boy Scouts, but if Equality California wants to set up a boys camping group that excludes heterosexuals, I don’t want anyone to try to take that group’s tax exemption away. Similarly, I’m not a warlock, but if the Church of Universal Ecletic Wicca wants to start a girls group to teach them how to celebrate pagan holidays, that’s fine. Neither I nor any government is endorsing Wicca by allowing that group to enjoy a tax exemption.
The persecution of the Boy Scouts is just one more example of how pernicious it is to argue that tax exemptions equal governmental endorsement and subsidization. Our civil society is supposed to be diverse and tolerant. If our nonprofits aren’t allowed to hold sharply different points of view, to teach their members different outlooks on life, to disagree about the best ways of life, then our nation has ceased to be free, much less tolerant or diverse.
And yet Equality California already has a second nonprofit in its sights, the Capitol Resource Institute, with threats to attack its “tax breaks” as well. What ever happened to public argument against people with whom you disagree?
Amazing, isn't it, that a gay rights group is attacking the Boy Scouts in a way that the Bull Connors of Alabama never dreamt of attacking the NAACP? (Of course, it's also amazing that an administration led by the first African-American President has imitated Alabama segregationists by demanding nonprofits hand over their donor lists.)
God—or Gaia—help us if we can’t tolerate nonprofits that disagree with the majority of the citizens of a given state.
FOOTNOTE: For one of the best refutations of the claim that private, tax-exempt giving is somehow a “public” subsidy, see Evelyn Brody and John Tyler’s How Public Is Private Philanthropy?, published by the Philanthropy Roundtable. For documentation of the Obama administration's demands for nonprofits' confidential information, see the IRS letters posted by Cleta Mitchell, the Foley & Lardner attorney who represents many of the targeted groups, as well as the letter sent to a Virginia group. (Many of those groups are 501(c)(4) groups, rather than 501(c)(3)s like the NAACP, but that fact doesn't significantly alter the issue.) For a related post of mine on these issues, see “Dam Political Speech.”