Bill Overview
Title: Increased Transparency in 501(c)(4) Organizations Act of 2022
Description: This bill expands public notice requirements for tax-exempt social welfare organizations [(i.e., 501(c)(4) organizations] to make a notice of intent to operate as such an organization publicly available in the same manner as an application for an exemption from tax.
Sponsors: Del. Norton, Eleanor Holmes [D-DC-At Large]
Target Audience
Population: People connected to 501(c)(4) organizations
Estimated Size: 7000000
- 501(c)(4) organizations are social welfare organizations in the US that do not have to disclose their donors.
- This bill directly impacts individuals who are part of, donate to, or benefit from the activities of 501(c)(4) organizations.
- Such organizations include a variety of advocacy groups, non-profits, and community organizations affiliated with social welfare causes.
- Increased transparency may affect the way these organizations operate, particularly in terms of funding and donor relations.
Reasoning
- 501(c)(4) organizations play a crucial role in social welfare, including community organizing, advocacy, and even political campaigning. They have a wide array of stakeholders such as donors, beneficiaries, members, and employees.
- Increased transparency could influence donor behavior, potentially leading to changes in funding that these organizations rely on to execute their missions.
- The policy will not affect all individuals equally. Stakeholders with a strong interest in donor anonymity may experience negative impacts, while those advocating for transparency and accountability might see positive changes.
- The budget constraints suggest that direct impacts are likely focused around compliance costs and their downstream effects on operations and supported activities.
- Individuals who indirectly benefit from these organizations' work (e.g., community members) might not see immediate direct changes to their wellbeing.
- For members and employees of these organizations, the policy might lead to changes in organizational culture and public perception, which could affect job satisfaction and morale.
- Opinions will vary based on personal and professional perspectives; some may see transparency as fostering trust, while others might view it as an intrusion or bureaucratic burden.
Simulated Interviews
Policy Analyst (Washington D.C.)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I think transparency is crucial for accountability, especially in organizations that influence public policy.
- This could help build trust with the general public.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Retired (Texas)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- Transparency might deter some funds but should improve ethical standards in operations.
- As a volunteer, I care about the organization's reputation which could benefit from more openness.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Software Developer (California)
Age: 32 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- If donor lists become public, I might reconsider contributions to avoid public association.
- I value privacy in my financial contributions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Community Organizer (New York)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Transparency is positive if it leads to fairer funding practices.
- However, I'm worried about increased regulatory burden slowing down our initiatives.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Political Consultant (Florida)
Age: 28 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This poses a threat to strategic donor participation, might shrink campaign funding through these groups.
- The policy might change the landscape of political advisory work significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 7 |
| Year 2 | 5 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Nonprofit Director (Ohio)
Age: 65 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- Increased transparency should foster collaboration as there would be fewer doubts about motivations.
- I anticipate some administrative challenges at first.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Lawyer (Illinois)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 5/20
Statement of Opinion:
- This policy could increase the compliance costs for organizations, impacting their operational capabilities.
- While transparency is ideal, execution details will matter for these organizations' survival.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
College Student (Oregon)
Age: 22 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- More transparency should lead to more trustable campaigns, making student involvement safer.
- I support any move towards more accountable governance and advocacy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Financial Advisor (Nevada)
Age: 38 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 12.0 years
Commonness: 5/20
Statement of Opinion:
- This could impact clients' willingness to donate, affecting their social and political influence strategies.
- It might result in shifts to different vehicles for contributions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 7 |
| Year 2 | 5 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Activist (Colorado)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- Transparency should help ensure fair practices and robust advocacy efforts.
- However, initial implementation might disrupt some of the collaborative projects underway.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $8000000)
Year 2: $4000000 (Low: $2500000, High: $6000000)
Year 3: $4000000 (Low: $2500000, High: $6000000)
Year 5: $3500000 (Low: $2000000, High: $5000000)
Year 10: $3000000 (Low: $1500000, High: $4500000)
Year 100: $2000000 (Low: $1000000, High: $3000000)
Key Considerations
- The scalability of IRS resources to handle increased transparency requirements.
- Potential indirect effects on how 501(c)(4) organizations are funded and operate.