IRS scrutiny of nonprofits is hardly an unusual practice


What the IRS did to the tea party movement was wrong. But isn’t uncommon. Organizations, some of which receive federal, state and local government money, along with individual contributions generously donated by well-meaning supporters are always scrutinized.

Nonprofit supporters receive tax breaks for their generosity, as an incentive.

Nonprofits have been directed to disclose the sources of their funding, and how they spend their money, for years. In fact, Nonprofits First has certified agencies locally for “best practices” for precisely that reason ever since certification for best practices began here in Palm Beach County in 2006.

Organizations like the one I run has a mission that begs one to participate in politics, especially now. With marriage equality on the Supreme Court’s table, requests by the public to provide protections in the workplace for gays and lesbians, and “don’t say gay” legislation popping up in states across the country, voter education, civic participation, and political engagement are a necessity if organizations like Compass want to survive and fulfill their missions.

Nonprofits don’t have to pay taxes on revenue, but they must abide by strict laws and when it comes to government funding, the books are checked a lot. The same funders who allow the nonprofit I run to provide services to the public audit us three or four times a year, beyond the independent audit nonprofits are required to conduct annually.

Recently someone leaked donor information about nonprofit organizations established around the same time Barack Obama was campaigning to be president. 501(c) 3’s and 501(c) 4’s, created to “educate” the public (around 2007) have recently been scrutinized – unfairly. However, these organizations received tax breaks for the privilege to “get out the vote” and to motivate Americans to go to the polls. They had a specific agenda, just like the rest of us, and that agenda is now under a microscope.

Nonprofits are allowed to “educate voters,” especially when educating is a part of fulfilling a specified mission. Donors are identified, funding sources are acknowledged – and appropriately – those donations become part of the public record and are disclosed.

Entities like the National Organization for Marriage aren’t happy about this scrutiny. They aren’t happy about the public knowing their business, their donors, or their activities. The name, “National Organization for Marriage,” sounds well meaning, but in fact, the organization was established specifically to influence legislation – to prevent same-sex marriage. There are limits for nonprofits who engage in lobbying activities, and when an organization’s “education” is focused on influencing elected officials, things get sketchy – and the public should know about it.

There are fewer donors involved in the organizations under scrutiny than one would think. A handful of millionaires, for reasons unknown, want to keep same-sex couples from marrying one another, and they’ll pay a lot of money to undermine efforts for marriage equality.

In fact, three or four donors contribute and comprise about 75 percent of these entire organization’s budgets. The fact that it’s only a handful of donors, with a lot of spare money to spend, doesn’t exactly make a case against same-sex marriage.

It either makes a case for a convenient tax break, or it’s an outlet for a perverse fixation about families that just don’t look like the one’s we’ve been conditioned to emulate.

I’ve always welcomed heightened scrutiny. All nonprofits should.

Organizations on a mission should want to do things the right way, because the wrong way would do more harm than good, and the wrong way wouldn’t forward any mission at all – especially when your very existence is a target.

When organizations, even if the IRS wrongly targets them, complain because they are asked to prove they follow the rules – rules that may seem new but are an industry standard – it should make us all question what all the fuss is all about.

Tony Plakas is the CEO of Compass gay and lesbian community center. He can be reached at

Copyright © 2013, South Florida Sun-Sentinel

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