A recurring threat to nonprofit advocacy has arisen once again, this time in conjunction with the Federal Housing Finance Reform Act (H.R. 1461), which the House passed on October 26, 2005.

H.R. 1461 is intended to reform certain housing-related government-sponsored enterprises (GSEs), such as Fannie Mae and Freddie Mac, and would, among other things, create an Affordable Housing Fund from revenues of the GSEs. A group of conservative House members persuaded the bill’s sponsors, Rep. Richard Baker (R-LA) and Chairman of the House Financial Services Committee Michael Oxley (R-OH), to add provisions that would disqualify organizations that engage in lobbying or nonpartisan election-related activities from applying for grants from the new fund.

It is not clear whether these provisions will ever be enacted into law. The White House is opposed to the bill for other reasons, and a comparable Senate bill does not contain the advocacy ban. IS will, however, continue to watch the bill closely and alert members when further action is needed.

The provisions, which were added when the bill came to the House floor, would extend the current ban on the use of federal funds for lobbying and certain electioneering activities to private funds as well. The proposed restrictions are so broad that any charitable organization that has within the previous 12 months engaged in nonpartisan election activities - including voter registration and education, assisting voters to apply for absentee ballots, or providing voters transportation to the polls - would be ineligible for grants from the new Affordable Housing Fund. The proposal would also prohibit non-profit grantees from engaging in any of these activities in the future, even with private funding. In addition, even nonprofits that do not engage in such activities would be disqualified for grants simply if they are affiliated with an organization that engages in such activities.

This effort to restrict the advocacy rights of nonprofit housing groups violates the First Amendment freedom of speech and association and would set a precedent that could cause charities that receive other federal grants to fear that their access to such funds might be restricted if they do not curb their advocacy and nonpartisan electoral activities.

Independent Sector sent a letter to the Financial Services Committee leadership and House leadership stressing our strong opposition to the proposed anti-advocacy provisions, as well as a sign-on letter to key leaders in the House.

Last Updated: October 27, 2005