Question

Your client, Rich N. Ready, has come to you for advice. Rich is interested in many social welfare issues (e.g., access to higher education, welfare reform, and abortion rights). He wishes to use his wealth to educate the general public on these issues, as well as to influence related legislation. Further, he wants to assist the financing of campaigns for political candidates who reflect his views.
Rich's friend Penny suggested that he organize a § 501(c)(4) organization, telling him that such organizations are not only tax exempt, but that they need not disclose the names of their donors. Thus, Rich could participate in these activities anonymously. However, Rich saw that the Internal Revenue Code requires that a § 501(c)(4) organization must be operated exclusively for "the promotion of social welfare." This would seem to preclude the lobbying and political campaigning support that Rich desires.
Is a § 501(c)(4) organization appropriate for Rich's plans? Summarize your findings in an e-mail to your instructor; be specific in your answer(s).


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  • CreatedSeptember 09, 2015
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