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Is it conflict for politician to lead nonprofit in district?

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Is it conflict for politician to lead nonprofit in district?

Is it a conflict of interest for a political officeholder, running for office or currently serving in an office, to be the Executive Director of a 501(c)(3) charity located in the district they serve?

The issues surrounding “political” charities are difficult ones.  Obviously, members of Congress or holders of national office are not likely to have time to hold a second job as executive director of a charity.  But most state legislatures and local government legislative bodies are only part-time jobs, and office holders often have to hold other jobs to make a living.  An executive director of a charity ought not to be singled out for conflict in comparison with the local funeral director, another business executive, physician or lawyer.  They can all use their office for personal gain if so inclined.  They can also use it legitimately to advance the issues they perceive to be important to their clients or their industry.

A major problem with charities tied to politicians (even where the politician is not an officer or director) is that they provide an avenue for donors, who may be limited in the amount they can contribute to political campaigns, to obtain the recognition and access they crave by making tax-deductible contributions to the politician’s charity.  There are lots of instances of questionable contributions to political charities, but one of my favorites involves one in Pennsylvania a number of years ago.  The Speaker of the House of Representatives established a Speaker’s Foundation Fund as a donor advised fund (a little like having his own charity) at a community foundation.  He raised more than $610,000 to make grants to other charities working in his district.  The contributions came in large part from businesses that did business with the state.  An enterprising newspaper reporter called the same contributors seeking gifts to a new reporter’s fund he said he was establishing for charitable purposes.  None of the businesses was willing to make a contribution to his fund.  As I recall it, he said he raised about $5.83 in his campaign, $5 from his mother and 83 cents from the loose change in the pocket of a fellow reporter.  He wondered why the Speaker’s Fund donors were not as generous with him.

Monday, August 13, 2012

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