I Hope No Arts Organization Is Doing Anything Close To This

In writing posts I often draw on examples from commercial enterprises and other types of non-profits to provide interesting ideas or lessons that my primary audience of arts and culture professionals might use. It isn’t often that I come across something where I firmly believe no arts and cultural organization could possibly be engaging in.

But just in case, here is an example of an operation which would undoubtedly give non-profit charities a bad name and make people want to subject them to additional scrutiny.  Gene Takagi of the Non-Profit Law blog had retweeted a post by Karl Mill which I initially assumed was just going to deal with what can be a fine line between what is allowed in terms of political lobbying and action by 501 (c) (3) non-profits and is better organized as a 501 (c) (4).

But it got oh so much worse than that really quickly. In addition to wanting to actively lobby for political candidates, the proposed non-profit intended to assist the homeless and indigent by enrolling them in the multi-level marketing program of the company which was forming said non-profit organization.

Mill goes through the application for non-profit status in some detail, commenting on what activity is okay, falls into a gray area of the law, and falls off the rails completely. Some of that is definitely useful for those who are confused about the difference between issue advocacy and lobbying. But he also gets to the point where he starts to comment “I wish I were making this up.”

At the end he sums up all the problems he identified in a bulleted list:

At this point, you might be wondering whether your organization can learn anything from an organization that was planning on:

• Scooping up homeless and other indigent individuals;

• Putting them in a home together and brainwashing persuading them to pay to become salespeople for a multi-level marketing company,

• Charging them a fee for that initiation on top of the fees that all salespeople pay up the chain;

• Taking control of their finances and charging them money for non-compliance, and

• Having their conscripted army of indigent salespersons produce videos, op-eds, and go canvassing door-to-door to campaign in support of the company’s chosen candidates or in opposition to the company’s political enemies.