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The Johnson Amendment – Facing a New Threat to Charitable Nonprofit Nonpartisanship
July 10, 2025
This week, the nation’s nonprofit sector has witnessed an overtly misguided effort by the Internal Revenue Service which places the long-held principle of nonprofit nonpartisanship in real jeopardy.
Background
A long-held core value of the charitable nonprofit sector – nonprofit nonpartisanship – is again being threatened by the federal government. In 1954, Lyndon B. Johnson, who was then a senator from Texas, introduced an amendment providing that in exchange for federal tax-exempt status, a charitable nonprofit, foundation, or religious organization may “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
What is sometimes referred to as the “Johnson Amendment,” the provision requiring charitable nonprofit nonpartisanship, passed without controversy. Since then, it has been supported and expanded upon by presidents of both parties, shielding charitable 501(c)(3) nonprofits and the people they serve from political partisanship. The amendment has ensured that (c)(3) nonprofits can focus on their missions without becoming entangled in divisive partisan political battles that might damage communities, separate congregations, turn away constituents, discourage board service, dissuade donors, and do harm to millions of Americans that nonprofits serve every day. It also ensures that charitable nonprofits don’t became a back door for political fundraising.
Importantly, as this topic arises from time to time, the emphasis has been and continues to be the role of houses of worship, which are automatically assigned 501(c)(3) status by the IRS when they file as nonprofits. While there are 31 other types of nonprofits with differing abilities to embrace political perspectives and candidates, ALL (c)(3) organizations are beholden to nonpartisan activities.
Additionally, there are plenty of examples every year in communities across the country that break this law. The consequences are severe – loss of nonprofit status – if and when nonprofits are found to be violating the rules.
Recent federal litigation threatens nonprofit nonpartisanship
On July 7, the IRS, in a federal court filing, reversed nearly 70 years of legal precedent, saying that “churches and other houses of worship” can endorse political candidates in certain circumstances. According to the IRS, the filing was made to end a lawsuit brought by two Christian organizations purportedly to carve out a narrow exception to the Johnson Amendment for only the specific plaintiffs Sand Spring Church and First Baptist Waskom. But the potential implications are much bigger.
What does this decision mean?
It is clear right now that the threat to charitable nonprofit nonpartisanship is real, but the long-term impacts remain unclear. While the court case focused on two organizations, it seems impossible to imagine that the IRS will enforce nonpartisan activities for all organizations except two.
While studies indicate[1] that congregants will oppose any partisan activity in their places of worship, it appears that the IRS under its current leadership will not pursue compliance. Much more concerning is the true sea change afoot. It is entirely possible this recent ruling is about thwarting the rules and limitations of political campaign funding.
The New York Times reported on the ruling on July 7, 2025:
“The National Council of Nonprofits, which represents 30,000 such groups, warned that allowing tax-exempt groups to endorse candidates could lead to a future where political groups use nonprofits as a kind of legal disguise.
“Diane Yentel, the group’s president, said in a statement Monday that the I.R.S.’s move was ‘not about religion or free speech, but about radically altering campaign finance laws. The decree could open the floodgates for political operatives to funnel money to their preferred candidates while receiving generous tax breaks at the expense of taxpayers who may not share those views.’
“‘It basically tells churches of all denominations and sects that you’re free to support candidates from the pulpit,’ said Lloyd Hitoshi Mayer, a law professor at the University of Notre Dame who has studied regulation of political activity by churches. ‘It also says to all candidates and parties, ‘Hey, time to recruit some churches.’”
Foraker’s position
Since 2017, Foraker has actively supported efforts to protect nonprofit nonpartisanship alongside our partners at the National Council of Nonprofits.
We strongly oppose the use of charitable nonprofits for political purpose and encourage all charitable nonprofits to continue to practice the core principles provided in the Johnson Amendment that protects charitable nonprofits and all the people they serve from partisan politics.
The Johnson Amendment is also neutral in that it does not single out religious organizations and houses of worship but applies this restriction to all 501(c)(3) nonprofits, this new carve out within charitable organizations will cause confusion and be highly challenging to monitor.
Following the principals of the Johnson Amendment avoids politicizing the sector and subjecting nonprofits and foundations to demands for campaign contributions (thereby diverting donors’ money away from mission-related work to the benefit of politicians) and forcing political support.
Not only would weakening the Johnson Amendment damage public trust in the work of nonprofits, but it would also threaten the impartiality and independence of the charitable sector. At stake is the high level of trust donors, staff, volunteers, and board members have in charitable nonprofits and our ability to effectively partner in finding community solutions instead of being influenced by political expediency.
Partisan politics has no place in the work of thousands of charitable Alaska nonprofits. The charitable sector at its core brings people together to advance causes and create change throughout Alaska and our nation. We come together, often across political party lines, to support the issues and the causes that matter to us. This system works. Dismantling or damaging the current system by allowing partisan politics to enter into our mission-based work in the form of supporting or opposing those seeking public office will only make it harder, if not impossible, to meet our missions.
Those opposed to the Johnson Amendment claim that any restriction forces religious leaders to give up their constitutional right to free speech and is intended to silence religious groups from speaking to issues of morality. This is simply untrue. A limited restriction on partisan political speech by a tax-exempt nonprofit does not equal silencing. Such restrictions protect the integrity of nonprofits and their ability to focus on serving our communities without being beholden to any particular candidate or party.
The Johnson Amendment prohibits charitable organizations including houses of worship that receive tax-deductible donations from endorsing or opposing any political candidate or party in their formal activities. The amendment places no restrictions on discussions or advocacy with regard to political and social issues. This is not about whether one agrees with a particular issue position or not. Faith leaders can engage in partisan politics when acting solely as individual citizens and may endorse a candidate just as any other citizen, as long as they do not do so when acting in the name of their house of worship.
Imagine a day when the line between politics and charitable work becomes so blurred that charitable nonprofits, including religious institutions are actively engaged in encouraging people to vote for or against a particular candidate for public office. We are now closer than ever to this day in Alaska and across the country.
Call to Action
We call on all charitable 501(c)(3) nonprofits board, staff, volunteers, and donors to contact our federal delegation and let them know you oppose the dismantling of the Johnson Amendment and the erosion of the nonpartisan nature of American’s charitable nonprofits.
Senators:
Representative:
Johnson Amendment Timeline
July 1954: Senator Lyndon B. Johnson introduces a floor amendment restricting 501(c)(3) organizations to nonpartisan political activity only. It passes without controversy.
May 2017: President Trump signs Executive Order 13798, directing the IRS not to take adverse action against individuals, houses of worship, and religious organizations that speak out on “moral or political issues from a religious perspective,” when such speech has previously not been treated as participation or intervention in a partisan political campaign.
Nov. 2017: The House Ways & Means Committee inserts language into a tax bill to weaken the Johnson Amendment as it pertains to houses of worship. The Senate parliamentarian removes the provision.
Mar. 2024: The SAFE SPACE case is filed in U.S. Tax Court seeking to overturn the Johnson Amendment by claiming it amounts to censorship in violation of the First Amendment.
Aug. 2024: Two Texas churches and two advocacy groups file National Religious Broadcasters v. Werfel claiming the Johnson Amendment violates free speech rights under the First Amendment and equal protection rights under the Fifth Amendment because it is enforced unevenly.
Nov. 2024: The SAFE SPACE case is voluntarily dismissed but may be re-filed.
Mar. 2025: The most recent version of the “Free Speech Fairness Act” is introduced, seeking to allow 501(c)(3)s to engage in partisan political speech as long as it does not incur “more than de minimis incremental expenses.” Neither bill has moved as of this writing.
Apr. 2025: The IRS requests public comment to inform its 2025-2026 Priority Guidance Plan.
May 2025: The Institute for Free Speech asks the IRS to amend current regulations “to correct constitutional infirmities created by the rule’s interpretation of the Johnson Amendment” alleging it is unconstitutionally vague and chills free speech in violation of First Amendment rights.
June 2025: The Religious Liberty Commission held an initial hearing.
July 2025: The IRS filing is entered in federal court prohibiting enforcement of the Johnson Amendment for church plaintiffs.
Sept. 2025: The Religious Liberty Commission plans a hearing on the Johnson Amendment
[1] According to a 2024 survey conducted Lifeway research, an evangelical research organization, only three in 10 U.S. adults (29%) believe pastors publicly endorsing candidates for public office during a church service is appropriate. Three in five (60%) disagree, including 42% who strongly disagree and 11% aren’t sure.https://www.yahoo.com/news/irs-says-churches-endorse-political-100320724.html
We thank all the organizations that have come to Foraker for our assistance in meeting your missions. We endeavor every day to help you move in the direction you want to go. And we have tried to never let money be a barrier to our services. Still, the reality is that mission-related earned income is what allows us to help everyone who needs our support.
As we strike that balance, the Governance Board recently passed a late payment policy that includes a penalty on outstanding balances. Our purpose is to ensure we have the resources available to serve all Alaska’s nonprofits and tribal organizations that need support.
We will do everything we can to communicate with you about outstanding invoices, and we ask you to do the same. We currently are contacting every group that has at least a 60-day past due balance. For others, please be aware that all unpaid balances after 90 days or accounts in default on payment plans will be assessed a monthly 1% interest (12% annually) on the outstanding balance until it is paid in full. If payment (either substantial or full) has not been received within 120 days of the invoice date, these actions will occur:
We encourage any organization experiencing financial hardship to contact us to discuss arrangements before an account becomes overdue. We recognize it will take all of us working together to avoid late payments. We simply ask that you communicate with us directly. We know we already have communicated directly with some clients about this process. Our intention is to apply this late payment policy to all clients effective September 1, 2025. If you have any questions, please get in touch at info@forakergroup.org or call 907-743-1200.
Many organizations face uncertainty from recent federal government changes. Our Rapid Response Office Hours are here to help you navigate this evolving landscape. We know a trusted thought partner can make all the difference—helping you get unstuck and move forward with clarity.
Thanks to the generous support of the Rasmuson Foundation and the M.J. Murdock Charitable Trust, we are offering free 45-minute consultations with our experts. You can sign up for a session on topics such as:
Not sure which topic fits your needs? Or have another topic in mind? Contact us – we’re here to help.
The nonprofit sector is changing – more than the usual flux we expect for a sector that meets communities’ needs and responds to gaps that government either can’t or won’t fill. We expect that. We see that. But based on new federal policies and the state’s shifting priorities, changes will be and already are monumental.
How it settles out is unclear. There are hundreds of lawsuits still to play out. The new federal budget bill will take years (in some cases until 2028) for the full impacts to be felt and many decisions are already taking their toll.
In the article, It’s Personal: Why Nonprofits Matter to Everyone, we explored all the quiet ways nonprofits make our communities, our society, and our democracy work. Most people don’t notice but that’s because the sector is “just there,” but change is coming in ways we have yet to anticipate.
What is clearer today than even a week ago is that with no runway to plan for a shift in funding or policy priorities, some organizations will not survive. Others will struggle to hold on to current ways of serving their communities, and still others will face an increased demand to meet needs with little or fewer resources than they have today. How all the changes impact each organization will be specific and, yes, some will be untouched.
While we hope for the best, we plan for the challenge. Below are five real choices to consider for scenario planning if and when they are needed.
Any step that brings cost savings should be explored. Shared approaches like back-office outsourcing among organizations can be viable options. Shared employment, group purchasing and shipping/freight, or joint communications focused on causes that highlight several connected missions are all good options. That said, sometimes we get in our own way by overly considering the importance of singular missions rather than the power of moving together. Maybe now these considerations seem more palatable. They still take up-front work, savvy “shopping” for the right partners, and good financial planning to know that cost savings and hopefully savings in stress will be the result. Certainly no one-size fits all models exist, but there are great choices if it means the result is a steady mission or even more mission results.
For certain organizations with financial savings, mergers or acquisitions may be possible if there is also emotional will from enough people to do the hard work. A popular myth says that mergers are the answer, but this ignores the fundamental drive that created the organization’s mission in the first place. Worse, it holds the sector to a lesser standard than private industry, which is regulated to ensure that no harm comes to the customers it was supposed to serve. Instead, what is true is that merger and acquisition work in the nonprofit sector is slow and careful and is done by deeply committed people who are trying to do better by their communities. Also true is that even after all that work, the result might make sense for mission delivery but rarely makes sense financially (at least at first, and maybe for much longer than that). Additionally, part of the slowness of the work, but some of its most essential pieces, are beyond the legalities and structures and more about the culture and values that are left standing. Ultimately, if this work is skipped, the organization is plagued by a “smooshed” culture that has immense issues knowing who they are and what is core to their decisions. Worse outcomes are staff divided, board cliques, distrust, and more. Attending to the cultural aspects of any collaboration is the ingredient that matters the most.
The choice to be acquired or become a program of something else can be a faster option than full merger. Yet, like a merger, this option will move at the speed of trust and still requires a positive financial scenario in the short and long term. In this case, the less financially strong organization(s) approach a more stable organization with mission alignment and offer up intellectual capital, donors/members, and all assets and liabilities. Ensuring that any overlapping donors will not simply give one same sized gift rather than double their one gift is often tricky. Attention must also be given to other stakeholders to ensure they are aligned to the new intent and structure. There is a continuum in this choice that attempts on one end to preserve brand, ultimate intent, and maybe even core cultural components, and on the other end is more a Pac-Man style where the program lives on but is subsumed by the larger organization in whichever way works best for the standing organization. The latter is faster but emotionally much harder.
It would be nice if we had time to pair these organizations in some neat and tidy way that left no gaps in service or, worse, created dire consequences for the people and places that rely on the sector’s support every day. But for some organizations, time is up, money is tight, and the commitment to do the extra work right now is waning.
The lesson learned, if you are considering either merger or acquisition, is that it starts with leveraging resources, harnessing the energy of people, and providing more or better service to the community. If this is the choice – take all the steps.
The going rule in a for-profit business is that 50% of them don’t make it within the first five years. Closure is part of the calculated risk. The customer decides if they want to purchase what the seller has to offer, and essentially market forces both from the seller and the buyer determine if the business survives or thrives. There is no such mechanism in the nonprofit sector. Instead, it happens as a choice of the board. By definition, nonprofits are serving “the greater good” and thus there is something about the work that was never viable in the marketplace. Maybe it is education or food or housing or vaccinations or environmental renewal or care for our elders or our littles. Of course, it costs money. Nonprofit status is a tax status that ensures greater good, but it is not a business model. The business model is more complicated than widely understood and is often comprised of a delicate balance of mission-related earned income and charitable funding and in many cases, but not all, a partnership with government (federal, state, local, tribal) to ensure the population is served based on the laws and will of society. Generating revenue is a constant source of attention and saving it takes expertise, longevity, and a lot of work.
All to say, the nonprofit sector is rarely cavalier about revenue and must simultaneously be far more responsive to rules, conditions, and scrutiny than for-profits. So, the choice to close is a big deal with many steps.
If the board really believes it’s done, that the mission is no longer meeting a community need, or in the case we are seeing now, the government no longer wants nonprofits to meet that need and withholds funding, and all other options have been exhausted, then the choice to close is the right choice.
That said, it still requires many steps and a long process. Nonprofits cannot just close their doors and be done. This Checklist for Dissolving A Nonprofit outlines 27 minimum steps (in Alaska) that will likely take at least the last remaining board members (and a lawyer) a year to complete (including filing the last paperwork with the IRS). Compliance is still a priority to ensure that any remaining assets after liabilities are donated to a similar mission. Afterall, nonprofit assets are gleaned in the public’s trust and donor intent, and public good applies to every last dollar. Also, a priority is communication with donors, community investors, stakeholders, elected officials, and more to tell your impact story in your own words – to leave a legacy – to acknowledge the good and to redirect donors to invest in the next way your community will work on the larger issues your mission cared about. Don’t skip this step because this work was always about more than a single organization.
But what if your mission is not done? What if a real possibility still exists that thriving and not just surviving is possible in a different political context or with more time to strategize how to diversify revenue in a meaningful way? What if “no” is not an answer and a just a little longer runway and a moment to regroup would make all the difference? In this case, “simmering” may be the best choice.
Simmering starts with what Jim Collins in Good to Great calls, the Hedgehog Concept or the practice of telling all the truth (what Jim calls “confronting the brutal facts” and reconnecting to what is core by answering three questions as a team: “What are you (the organization, including the board) most passionate about? What are you the best in the world at? And what drives your economic engine?” At Foraker, the economic engine caveat is that the answer must focus on the source of unrestricted cash not restricted funding. The lack of unrestricted cash is at the heart of why so many nonprofits are at this crossroads now. The intersection of these three answers is the equivalent of what is MOST core. The hedgehog concept is powerful and meaningful and helpful for every organization, but at this pivot point it is an essential first step for the team’s alignment.
The next step is to determine if simmering then means honing the organization all the way down to no programming while you reposition it to focus on your hedgehog or scale down to one program or some combination of efforts to become small and extremely focused. These choices can mean letting go of staff (assuming there are any), stopping or reimagining programs and paring down the board depending on how quiet the work is going to get. It can even mean eliminating everything except for the yearly compliance requirements outlined in the bylaws, and by the state and the IRS.
Whichever path of simmer you take, communication is key with donors, community investors, stakeholders, elected officials, and more. Be clear about what “simmering” means and the future opportunities you see to resume to a “rapid boil.”
Ultimately, why would you simmer? You would if the team thought there was hope in the future and a better way forward can be found with more time to plan. And, if the calculation is wrong, well, it will be easier to shut down knowing that the milestones were not attainable even with a longer time horizon. And, if your calculations are right, it will be much easier to move back to serving your community without having to start from scratch once the current economic and political storm has passed and a business model is clearer to chart.
What’s next?
Five hard choices in a time where the only thing that is certain is uncertainty. The temptation may be to hunker down in fear of the unknown, but the nonprofit sector was built for action. To respond. To innovate. To deliver. Standing still is not in service to mission. The choice must be to take action to advance – with our donors – with our volunteers – with each other. Action may be to find a path forward or to release the people, time, money, and resources back into the community so that it can reformulate into what it will support next.
We are ready to stand with you in your choices. Call us for your next step or sign up for our free open office hours.
We know that year-end fundraising might be the last thing on your mind right now—but trust us, your future self will thank you for planning ahead.
Now’s the perfect time to commit to a successful giving season. And we’re here to help you do it in a fun, creative, and cost-effective way.
Our refreshed virtual intensive, The Year-End Giving Game Plan, will not just guide you through a year-end giving campaign, it will set you up on a successful path to better engage with your donors in the long-term.
You will leave this three-part intensive course with the following:
This intensive kicks off in October and consists of three, three-hour webinars of interactive instruction and real-time work sessions, with homework between classes. Optional (but encouraged!) office hours and one hour of personalized consultation for your organization are also included.
NOTE: This course is for organizations that have individual giving experience. It is intended for your organization’s staff member who leads fund development work. Up to two additional members of your staff and/or board are encouraged to participate. The total cost for each organization to participate is $2,350 or $1,950 for Foraker Partners.
Embrace the year-end giving season! If you are interested, fill out this form by September 5.
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