Why is Faithful America donating its c3 money?

After reading about our coronavirus charity donations, you might be asking, "Faithful America sends me a lot of urgent fundraising emails for your own work. How can you be giving money to other organizations?"

It's a good question, with a good answer.

Faithful America has been an independent 501(c)4 since May 2018. The 501(c)4 designation includes “social welfare” non-profits like us that, in exchange for not being able to accept tax-exempt donations, are allowed to engage in more political and electoral work than traditional charities.

Traditional charities receive a different tax designation of 501(c)3. Unlike us, 501(c)3 organizations are free to accept tax-deductible donations, but are far more restricted in their ability to hold politicians accountable.

Before Faithful America became a (c)4, we were "fiscally sponsored" by larger organizations. This means that while we ran our own campaigns, our legal and financial infrastructure was handled by a professional incubator, a common practice for start-ups. Each of our successive fiscal sponsors had both a (c)3 and a (c)4 arm, which enabled us to raise and spend both forms of money -- until 2018.

As an independent 501(c)4, we are no longer fiscally sponsored by a 501(c)3 organization, but the money we're helping give away is required by law to be spent only on 501(c)3-eligible activities. That's because one of our former sponsors is still holding approximately $5,000 in (c)3 funds in our name from a past era. We will direct them to distribute the money in that fund among our (c)3 nominees based on the results of this public vote.

We could spend the money on some of our own work, but because we are now only a (c)4, that would involve significant and time-consuming legal hoops. Jumping through those hoops would take away a lot of time from our actual campaign work, and much of the money would be wasted on legal fees. It seems far more responsible and effective to let the money assist other social-justice organizations, especially during this urgent pandemic.

You can read about and vote on the organizations we've nominated for the donation here.