Government Regulation and the Political Activities of Nonprofits

Abstract

We propose a conceptual model of the political activities of nonprofits that qualify for exemption under subsections of the Internal Revenue Code other than 501(c)(3), including social welfare organizations, civic leagues, social clubs, and so on, which considers three categories of explanatory factors: organizational capacity, financial strategy, and operating environment. Using a Heckman selection model with longitudinal IRS 990 data, we find government regulation to be an obstacle for nonprofits to engage in the policy process. Political activities of non-501(c)(3) organizations are also negatively associated with government support, suggesting these organizations perceive government intervention differently from 501(c)(3) organizations when engaging in political activities.