Fixing C4s Won't Fix the Problem

Finding solutions depend on how you define the problem. If the current mess at the IRS is truly a case of civil servants or elected politicians infringing on the free speech of specific political groups, that’s a problem for law enforcement and the courts. So far, what appears to have been demonstrated is incompetence and mismanagement, not crimes.

If you define the problem as the blurry line about these organizations engaging “primarily" in social welfare activities, you can be fix it with a definition -  a simple declaration of percentages, a cap, or a flat rate. That no Congressional committee is holding hearings to do this shows their actual lack of interest in fixing any real problems. These elected officials are the beneficiaries of the line’s blurriness.

If the problem is that the IRS can’t manage oversight of these organizations in a timely, impartial, and fair manner, there are two possible solutions – expand and train the IRS staff or hand oversight of C4s over to the FEC. The first is highly unlikely in this political climate. The second solution could improve oversight - at least campaign funding is the FEC's specialty. Doing so won’t stop secret money from flowing into campaigns, it will just improve reporting on it. So will the DISCLOSE Act or some version of it - and both actions should be considered. 

If the problem is 501 c 4s funneling money to political campaigns without revealing their donors, that’s a campaign finance problem. One solution would be requiring C4s to reveal all of their donors. This this will return C4s to the less-attractive entities they were before 2010. Requiring C4s to disclose their donors is also slippery slope to requiring all nonprofits to reveal their donors - which is synonymous with the end of anonymous charitable giving. That's a high price to pay for a fix that won't have any effect on the larger question of secret campaign funding - those campaign funds will just flow somewhere else (such as think tanks) or back to PACS and SUPER PACS.

The problem with all of the ideas above is they address the wrong issue. The real problem is not with C4s; it’s with campaign finance. At the root of it all is anonymous money flowing into political campaigns. For this there are two proposed solutions – first, fund candidates and parties directly and require full disclosure of all such gifts. This is was what campaign finance looked like before Watergate revealed the cracks in the system and we responded by taking the first steps to today’s broken system.  The second solution is to provide public money for campaigns and not allow private gifts above a certain percentage. This is what Larry Lessig has been promoting with Rootstrikers. It's appealing but even Lessig recognizes it's very slim chances of happening under current conditions (which is why he’s also calling for a Constitutional convention).

There is a third way that has nothing to do with stopping the flow of money in but instead focuses on the flow of money out. Most of the dollars raised go to broadcasting candidates’ messages. If we made air time (television and radio) free to candidates and campaigns, limited the length of campaigns to a certain period of time and gave everyone the same amount of airtime (on those publicly owned, privately leased airwaves of ours) we’d kill the beast of demand and supply would wither in response. At least until the industries of campaign consultants and media buyers figure out some way to save their skins and reroute the funds to the Internet, mobile phones or Google Glass ads. In which case we go back to the FCC about public broadband.

We should close the gaping hole in the current oversight system that allows campaign donors to funnel money anonymously through C4s. Unless we do so, the rest of the campaign finance system will continue to leak into C4s and the charitable element of the 501C section will continue to be tarnished by the "dark money" tone of the C4s. But let's be real, fixing C4s won't fix campaign finance or any of the problems with the larger nonprofit sector. The C4s as political money launderers are a symptom of larger problems with both campaign finance and the independent sector - fixing them is like the proverbial bandaid.

Digital Civil Society and the DPLA

This post appeared originally on PBS MediaShift


Why would anyone want to attend a party to celebrate the opening of a virtual repository of metadata? A better question might be — what is a virtual repository of metadata? In this case, the repository I’m talking about is the Digital Public Library of America, which launched on April 18.* Underneath its beautiful website and inviting tag line, “A Wealth of Knowledge,” the DPLA is a set of linked, accessible, digital materials from libraries, archives and museums around the country. It’s one of hundreds of such national or regional libraries launched in the last several years. And yes, I, and hundreds of others, had booked plane tickets and hotel rooms and packed my party clothes to celebrate it.

I see the DPLA as an encouraging example of our emerging digital civil society. Libraries in their familiar form represent community centers of knowledge, havens for voracious readers, on-ramps to broadband, and accessible hubs staffed by expert researchers there to help you. In the U.S., they rely on tax revenue and philanthropic resources and are often governed and managed by a robust mix of citizen volunteers, professional experts, and public servants. They physically embody the democratic ideals of inclusion, pluralism, participation, and progress.

The digital form evolves from these same ideals, yet must work within a digital economic frame that is distinct from its analog predecessor. Digital materials raise deep questions about ownership, permanence, and access. In its approach to each of these questions, the DPLA is on the frontier of what building a digital civil society will require. Like The Mozilla Foundation, Creative Commons, and WikiMedia, the DPLA is a non-profit built entirely around data and people — the future promises countless more such enterprises. Here are some of the ways these “digital civil society” institutions matter.

Ownership

Ownership has at least three levels of relevant meaning — owning original materials, owning copies, and owning (or governing) the institution. First, the partners in DPLA own their collections. The DPLA is a library without books. Instead of a stand-alone collection, it is the set of common software codes and processes that connect existing collections and adapts for future ones. And while DPLA has developed these protocols, the institution’s success relies on them being freely open and used by others.

Ownership in the digital age involves issues of copyright and copying. Wide-open digital access to books still under copyright is both legally complicated and a contentious challenge to existing business models for authors and publishers. Rather than wait for these market and legal battles to settle, the DPLA chose to launch with public domain materials and participate in shaping policy and practice as real readers, writers, and publishers use the site. The approach is to encourage and uncover the practices that can inform new policies, perhaps through new authors’ alliance or a new type of “library license.”

Ownership also refers to how the DPLA is managed. While your local library or library system is probably run by local professionals, volunteers, and public servants, the DPLA has spent two years inviting participation and input from authors, museum curators, bookstore owners, librarians, technologists, readers, public servants, philanthropists, and anyone else. Wikis and listservs, elections, volunteers and hired staff, a board of directors from across the country — and every possible online communication tool to gather input — are being used. The commitment is to open and transparent governance, drawing from all stakeholders.

Permanence

The Internet makes things permanent and fragile at the same time. While digital trails seem to last forever, storage and archiving of digital goods are considerably less stable than temperature-controlled rooms of carefully prepared paper. The only thing certain about digital technologies is their rapid pace of change. Recognizing that it couldn’t build everything or predict every need, the DPLA has been running parallel processes of “app labs” and developer challenges since its inception. We can’t predict where technology will take us, so the DPLA has built itself to adapt from within while also aligning with those who can push it along.

Image courtesy of the DPLA and used here under the CC BY 3.0 License.

Access

Unlike your neighborhood library, the DPLA has no books, no reference librarians, and no building. It also never closes. Its core assets — the metadata that identifies materials and the software code that connects collections — are open for use and reuse. The DPLA has tried from the beginning to be inclusive and welcoming in designing its software, its governance structures, and its future scope of work — open meeting policies, bylaws, and draft articles of incorporation are all on the site. I’m not an expert in the design of digital materials for the visually impaired, but the FAQ offers detailed information on how the site is set up to reach these users.

Civil society as we have known it for centuries revolves around the use of private resources for shared, public benefit. The structures, practices and policies that we’ve built to encourage and protect these actions — largely in the non-profit and philanthropic sectors — are built on assumptions about ownership, time, and benefits. As digital technologies change how we own things, for how long, and how we share them our institutions and governance of civil society will also shift.
The DPLA is an experiment worth watching as it navigates these new waters and celebrating as it unfolds. When the time comes for the actual party, I’ll be there.

*The launch party was scheduled to take place at the Boston Public Library and was delayed because of the bombings at the Boston Marathon. The DPLA website did launch on April 18 as planned.

Passing the buck from the IRS to the FEC to Congress

There's a new job opening at the top of the IRS. John Boehner and Mitch McConnell are calling not just for resignations, but criminal inquiries. The Op-Ed pages are full of insights about how 501 c 4s are broken, not just the IRS. In truth, these insights have been well known to those who track campaign finance and nonprofits, it just takes a scandal to make others aware.

So, now that the great secret of how broken c 4s are is on the nation's front pages - of the Times, The Wall Street Journal - it's time to ask the question some of us have been raising since January 2010 - where is the Federal Elections Commission in all this?

That's that group that (in theory) regulates campaign finance. The decision in the Citizens United case is often pointed to being at the root of the problem. (Our first clue should be the full name of the case - Citizens United v The FEC). The case opened the floodgates to 501 (c) (4)s becoming the campaign finance vehicle of choice - there have more than 4000 applications for new c4s since 2010 - few of them are the homeowners associations and sports leagues that used to dominate this class of organizations. C4s as political funding channel began with the 2010 midterm elections and made itself fully visible in the 2012 Presidential election. It is at that point that legislators (the same ones calling for IRS heads to roll) should have written rules to add FEC oversight to these organizations. The FEC is far from perfect, but at least it has experience and reporting requirements about campaign expenditures (monthly, not retrospectively as the IRS was in the position of doing)

Firing the Acting Commissioner is Washington's oldest "buck stops here" kabuki theater move. Heads will no doubt continue to roll from the IRS. The reality is, responsibility for the fiasco that are 501 (c) (4)s lies with the Citizens United decision, campaign finance rules, campaign finance overseers, and, ultimately, Congress itself.

The problems with 501 (c) (4)s

Regular readers of this blog know that I've been like a dog with a bone about the threat to the social economy and charitable organizations inherent in the Citizens United decision. I've written about it, held charrettes on it, spoken about it, and - at least in part - changed my career because of it.

The news about the IRS's activities regarding politically conservative social welfare organizations is both a surprise and, upon reflection, almost completely predictable. Intentional or stupid, witch hunt or botched effort at streamlining an impossible task - the IRS doesn't have the tools it needs to oversee 501 c 4s. We the people have written and approved rules that allow these organizations to:

• self declare tax exempt status
• keep their donors anonymous
• participate in campaign politics to an unspecified (and, therefore, difficult to police) degree

There may be problems with the IRS. There are definitely problems with the 501 (c) (4) organizational structure and oversight mechanism in today's world of campaign finance.