Prop 226 Could Handicap Nonprofits

by Robyn Wexler

Dubbed the "paycheck protection" measure by supporters, Prop. 226 is mainly aimed at unions. It requires unions to get annual written permission from each member before using membership dues for political purposes. Nevertheless, the wording is broad and will cover all employee wage deductions, not just union membership dues. Therefore, Prop. 226 would directly impact all nonprofits receiving funds from workplace giving programs -- such as Catholic services contributions. In fact, an estimated $7 billion in workplace giving to nonprofit social services will be affected.

"We see this as a political 'drive by shooting,'" said Herb Chao Gunther, executive director of the Public Media Center, a group organizing to fight against Prop. 226. "[It's] aiming for unions, but instead hitting the old person in the wheel chair and the kid who's hungry."

Proposition 226 will apply to local ballot measures as well as state measures. Such initiatives are a common and powerful form of legislation in California. Important policy decisions affecting such issues as affirmative action, immigration policy, child care and veterans support have been accomplished through such measures. If Prop. 226 is passed, nonprofits will be limited in their efforts to educate the public and give support to such causes as clean water and ancient forests through payroll deductions to the United Way or Earth Share.

"Some of these -- such as proposals to create smoke-free restaurants, cleaning up our beaches, getting curb cuts on city streets, increasing worker safety, support of the arts, improving educational programs, reducing community violence -- have been crucial to nonprofit charities' efforts to make the lives of California citizens healthier, safer and more fulfilling," says Florence Green, executive director of the California Association of Nonprofits.

Recognizing that charitable organizations have an important role to play in the development of public policy, Congress currently permits charitable nonprofit organizations to support or oppose ballot measures as well as permitting charitable nonprofits to influence legislators about matters pending before them, according to the group.

If employers "know or have reason to know" that any portion of payroll deductions are going to be used to support or oppose state or local election campaigns or ballot measures, they must ask every employee to give written permission for each of these political deductions. The potential consequences for nonprofits could be devastating.

The compliance process promises to be so cumbersome that most election campaigns would be long over before all written statements of consent could be gathered.

Prop. 226 also will result in increased spending on the state level. California State Controller Kathleen Connel estimates that the initiative will cost the state $1.4 million to $4.2 million in initial implementation costs, and $1.4 million to $2.1 million annual to maintain compliance for state employees alone.

With more than 45,000 nonprofit organizations housed in California, Prop. 226 has tremendous implications for charitable activities both in the state and nationwide. While similar bills have been defeated in 13 states already, five states have passed such measures and 25 more are currently in the process of pushing them through their legislatures.

Nonprofits opposing Prop. 226 include: League of Women Voters, Congress of California Seniors, Sierra Club, California League of Conservation Voters, California Public Interest Research Group, National Organization for Women (California Chapter), ACLU of Northern and Southern California, Asian Law Caucus, Health Access, National Lawyers' Guild, Latino Network, Greenbelt Alliance, American Jewish Congress, California Church IMPACT, and countless labor organizations.