The Douglas County Educational Foundation, founded 23 years ago as the Douglas County School District’s fundraising arm, is a nonprofit. Some parents — concerned about the foundation’s payments to consultants and a speech by paid consultant Bill Bennett in the weeks preceding the school-board election — see the activity as a potential threat to its nonprofit status.
A 501(c)(3) organization must “serve the public good,” according to the Internal Revenue Service. Such groups “must absolutely refrain from participating in the political campaigns of candidates for local, state, or federal office,” according to the IRS.
Some campaign-related activities and expenditures are allowed, but that allowance hinges on circumstances. Permitted activities include “the presentation of public forums … conducted in a non-partisan manner,” according to the IRS.
Bennett’s Sept. 25 presentation was coordinated by the South Metro Denver Chamber of Commerce as a presentation on education and his view of Colorado schools.
“On the other hand, voter education or registration activities with evidence of bias that would favor one candidate over another, oppose a candidate in some manner, or have the effect of favoring a candidate or group of candidates, will constitute campaign intervention,” according to the IRS.
Such activities jeopardize an organization’s nonprofit status.
Among the factors the IRS considers that tend to show an advocacy communication is political campaign activity:
• Whether the statement is delivered close in time to the election.
• Whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office.
• Whether the communication is part of an ongoing series of communications by the organization on the same issue that are made independent of the timing of any election.
A June fundraising luncheon for the DCEF was coordinated with help from the Starboard Group, self-described as “the state’s premier Republican fundraising and consulting firm.” Starboard’s contract with the DCEF for the “Love Our Schools” fundraising luncheon shows its event management fee as a $1,500 retainer, “plus 7 percent of gross revenues.”
“Principles and Practices for Nonprofit Excellence in Colorado” — a publication of the Colorado Nonprofit Association, which credits support from Colorado’s secretary of state and attorney general — addresses “Compensation of Fundraising Professionals”:
“A nonprofit should ensure that compensation for fundraising personnel and contractors is not based on a percentage of funds raised or other commission-based formulas,” it reads.
Another section addresses accessibility and public information, stating, “A nonprofit organization should make information about its operations — including its governance, finances, programs and activities — widely available to the community and on the organization’s website.”