The Financing and Programming of Advocacy in Complex Nonprofit Structures

Abstract

This article examines nonprofit environmental groups to demonstrate the impact of Internal Revenue Service (IRS) and Federal Election Commission (FEC) regulation on nonprofit organizations interested in advocacy work. This regulation encourages nonprofits interested in extended advocacy to form additional, related tax-exempt entities, creating complex nonprofit structures. Although regulatory barriers to charitable lobbying have received some attention, little has been written on how regulatory policy shapes the organizational structures, finances, and programming of nonprofits involved in advocacy. This study analyzes the complex structures of five environmental nonprofit groups using information they file with the IRS and FEC and interviews with key officers and representatives. It finds that even with strict regulatory compliance, financial and programmatic relationships across these complex structures can vary creating different types of complex nonprofit structures. The article models the different complex nonprofit structures and provides an analysis of the historical and legal risk factors that underlie them.