American Solutions Returned a $50,000 contribution from a 501(c)(3) in August, which upon further review saved that organizations’ exemption. American Solutions is Newt Gingrich's 527, and in what can only be described as an amazing twist of fate, American Solutions return of the money saved the 501(c)(3) from violating the prohibition against lobbying activities.
A 501(c)(3) public charity is prohibited by tax law from giving money to any entity in a manner which supports or opposes candidates for office. A 527, typically, exists solely for political purposes. That is, usually solely for the purposes of supporting or opposing political candidates. American Solutions is incredibly polarized and politicized, so they couldn’t argue that the $50,000 would be put towards non-partisan uses, so they returned the money to the 501(c)(3) to save them from themselves from a sure-to-come complaint. In response, the Hasan Family Foundation, the 501(c)(3), stated: “American Solutions is a nonpartisan effort that is focused upon educating Americans. None of the funds contributed to the organization are going towards politicians or a political party. We would never contribute foundation funds to a political party and/or candidate.”
The reality is that tax law is a lot stricter than that. The Hasan Family Foundation can do nothing at all that supports or opposes candidates. Giving money to an obviously partisan 527 that will use that money to fund things that support or oppose candidacies crosses the line. The folks at Hasan Family Foundation should count their lucky stars as the typically not charitable minded American Solutions were savvy enough to notice that such donation would put them both in the lobster pot!
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