Community Foundation for Oak Park -- Ballot Propositions

For the June 2006 election, the Community Foundation endorsed "yes" votes on Propositions C6 and D6, school bond propositions for the Oak Park Unified School District. For the November 2006 election, the Foundation endorsed a "yes" vote on Proposition H6, another school bond proposition for the District. For each election, the Foundation's Board of Trustees also authorized two activity committees to contribute $3,000 each to the campaign committee supporting the "yes" votes.

The following was prompted by concerns expressed within our community regarding the legality of political actions and contributions on ballot propositions by the Community Foundation. While the immediate issue was the Foundation's support of Propositions C6, D6, and H6, this information applies in general to all ballot propositions and whether the Foundation not only endorses a "yes" or "no" vote but also supports that endorsement with campaign contributions.

The federal Internal Revenue Code prohibits any charity from endorsing or opposing the election of any candidate for public office at any level. That law also prohibits any contribution by a charity to a candidate's campaign. Many think this prohibition against political activity also applies to ballot propositions, but that assumption is false.

Title 26 of the Code of Federal Regulations (Internal Revenue Service) addresses this issue in §56.4911-2. There, the IRS describes the extent to which charities may lobby the government regarding pending legislation. That section then states:

… where a communication [e.g., lobbying activity] refers to and reflects a view on a measure that is the subject of a referendum, ballot initiative or similar procedure, the general public in the State or locality where the vote will take place constitutes the legislative body, and individual members of the general public area, for purposes of this paragraph (b)(1), legislators.

The Community Foundation's activity committees are prohibited by Foundation policies from doing any lobbying at all. However, those policies do allow the Board of Trustees to waive that prohibition for an individual activity committee for a specific purpose. For example, the Foundation allows the Oak Park Performing Arts Alliance to lobby the Oak Park Unified School District regarding music and drama curricula and programs in our community's schools. Even then, the waiver generally prohibits spending any activity committee funds on lobbying.

On a very few occasions, the Community Foundation's Board of Trustees has endorsed a "yes" or "no" vote on a ballot proposition. The decisions to make such endorsements have been carefully studied and thoroughly discussed. Once an endorsement is made, that action applies not only to the Board of Trustees but also to all activity committees, which are then freely allowed to communicate the endorsement to their members and to the general public.

On even fewer occasions, the Board of Trustees has authorized (but never mandated) selected activity committees to contribute funds to campaigns aligned with the Board's endorsement on a ballot proposition. Such action has only been taken when the Community Foundation has filed Form 5768 (Election/Revocation of Election by an Eligible Section 501(c)(3) Organization To Make Expenditures To Influence Legislation) with the IRS. The total amount allowed to be spent on lobbying (including such campaign contributions) is limited by the Internal Revenue Code. For small charities such as the Community Foundation — those having charitable expenditures less than $500,000 per year — the limit is 20% of those charitable expenditures. In 2005, the Foundation's charitable expenditures were $250,670, which means we could spend about $50,000 on lobbying and ballot propositions.

The conclusion must be that the endorsements of Propositions C6, D6, and H6 by the Community Foundation were indeed legal. The $12,000 authorized during the year 2006 in support of Propositions C6, D6, and H6 was well below the limits allowed by law. The Board of Trustees discussed at length both the specific ballot issues and the propriety of endorsements and campaign contributions before deciding to do either. These decisions were not made casually.

If residents of Oak Park have other opinions on this issue, please contact the Community Foundation and give us your input. If you feel that the law is wrong to allow charitable funds to be spent on campaigns for ballot propositions, you should contact your legislators in Sacramento or your Representatives and Senators in Congress.

Community Foundation for Oak Park

Support of Ballot Propositions