First of all I’m not a lawyer, don’t even play one on TV.
What I have been (and still probably am on some obscure piece of paperwork) is an officer or director of a community group (told you I was a community organizer), a 501 (c) 3.
Now a 501 (c) 4 is flat out allowed to lobby and endorse candidates. Think Sierra Club (more on their Keystone sellout later maybe). In return contributions are not tax deductible for the contributor. For a 501 (c) 3 it’s more problematic but as a practice when we were pan handling in front of grocery stores (poor day when I couldn’t make my $35 an hour) we promised nobody nothing.
Can you make money? I just told you it was a poor day I couldn’t rattle my can for $35 an hour.
In fact some of the organizations I’ve worked with had cash flows of 10s of millions. It’s not as much as it seems when the money goes right out the door as expenses. Non-profit? I funded one club out of my pocket $10,000 to keep them going.
Now, is this money going to a worthy cause? Hell no.
A lot of them are just subsidized bars where well drinks are a dollar and top shelf $2.50 (no, you can’t drink if you’re not a member or guest, that will be $100 and I’ll swear you in right here).
Do they bring value to a community?
I dunno. How valuable is your Town Fair or Carnival? Your Parade or Craft Show? Your Community Theater?
Umm… these are all projects I’ve worked on. For weeks or years. For nothing.
I do it because it’s fun and I love Stars Hollow. I do it because I get to hang out with my buddies who are similarly “community minded”.
And there’s usually free beer.
But my point is that, for a club, 501 (c) 3 or 4 mostly means that you don’t have to keep a lawyer and accountant on retainer and the problem is not your tax status- it’s that the IRS has targeted particular clubs for political purposes.
And that’s just Nixonesque (2.1).