Following two earlier attempts to strictly limit the advocacy activities of nonprofit organizations, the Reagan Administration’s Office of Management and Budget (OMB) has issued what it intends as final rules governing lobbying activities by voluntary organizations that receive federal grants and contracts. Unlike the two earlier versions, the issuance of the new rules was not followed by a period for public comment. Final revisions in Federal Circular A-122, “Cost Principles for Nonprofit Organizations,” became effective May 27.
The first two attempts, which began early in 1983, were met with stiff and widespread opposition from Congress and thousands of nonprofit organizations nationwide on the grounds that the rules directly interfered with the ability of individuals and organizations to participate in the governmental decision-making process.
While less stringent than the two earlier versions, the new rules have met continued opposition from both the nonprofit sector and Congressional leaders. Opponents to the new rules most commonly cite existing legislation which already regulates lobbying efforts by organizations which are recipients of federal funding; the failure of the OMB to cite specific examples of abuses to current law by nonprofit organizations that would make such additional regulations necessary; fear of potential infringements of First Amendment rights; and the belief that disclosure of advocacy activities and expenditures as a part of the grant application process leaves organizations open to possible political harassment.
Congressman Jack Brooks (D-TX), chairman of the Government Operations Committee in the House of Representatives, reacted strongly to the release of the new OMB rules. “One of the priorities of this Administration’s political agenda has been to silence the voices that criticize it. Because many of its most vocal critics have been nonprofit organizations that serve the nation’s
children, handicapped, elderly and poor,” he noted, “the Administration has made a concerted effort to hurt these groups by insinuating that their political criticisms are illegal. For many years, the Congress and courts have made it very clear that nonprofit organizations have the right to participate in and comment on the governmental decision-making process, so long as federal funds do not pay for these activities. In revisions to Circular A-122, this Administration has repeatedly threatened the cherished First Amendment rights of nonprofit organizations.”
The new rules establish a five-part definition of “lobbying” which includes any attempt to 1) influence federal, state, or local elections, referenda or initiatives; 2) establish or support a political party, political action committee or any other political organization; 3) contact federal executive branch personnel relating to the signing or veto of enrolled legislation, or contact Members of Congress in an effort to influence pending legislation or the introduction of new legislation; 4) distribute “publicity or propaganda” to the general public in an effort to involve the electorate in influencing legislation; and 5) conduct legislative liaison activities “carried on in support of, or in knowing preparation for, an effort to engage in unallowable lobbying.”
“The regulations have a profound impact on relationships between legislators and their constituents,” noted Brian O’Connell, president of Independent Sector, a national coalition of nonprofit organizations, foundations and corporations. “Charities will be wary of speaking out on issues crucial to their causes and clients.”
Under the provisions of the new rules, exceptions do exist to the curb on lobbying activities. However, the exceptions—which fall under the category of “legislative requests for technical information”—must satisfy a complicated five-part test, limiting the scope of technical assistance information considerably. Unsolicited nonpartisan study, analysis and research provided to either members of legislative bodies, their staffs or to the general public constitute lobbying under the new rules, and are—as a result—“unallowable.”
Specific accounting requirements contained in the new rules will create additional record-keeping burdens for organizations nationwide. The OMB will now require a voluntary organization seeking a government grant to disclose its expenditures for influencing legislation even when such activities are paid for by private contributions. In a letter to OMB deputy director Joseph R. Wright, Congressman Brooks and Congressman Frank Horton (R-NY) noted, “The federal government has no business asking that information on the political activities of private organizations be separately identified when there is no involvement of federal funds in these activities and when such identification might subject these organizations to discriminatory treatment or other forms of harassment. We cannot compromise basic, constitutional freedoms for the sake of managerial of managerial convenience.”
Other record-keeping burdens abound under the new rules. When an employee whose salary is treated as an indirect cost of a federal grant spends more than 25 percent of his or her “compensated hours of employment” engaged in lobbying activities on a month-by-month basis, the employee is required to keep records of how that time was spent. If lobbying activities consume less than 25 percent of the employee’s time on a month-by-month basis, no record keeping is required.
As Arlene Shuler, executive director of Volunteer Lawyers for the Arts, noted, “It’s a classic catch-22 situation—in order to prove you do not have to keep records on your lobbying activities, you have to maintain records which show you’ve spent less than one-fourth of your time on lobbying activities in any given month. To make matters worse, some of the definitions remain so nebulous that what is today nonpartisan research tomorrow could be lobbying.”
Staffing costs related to such nonpartisan research are similarly affected. According to the new rules, the use of federal funds for research which might at some future time influence legislation is “unallowable” if the organization could have “reasonablv foreseen” such research could have bearing on future legislation. Further, the publication of such research falls under the “publicity and propaganda” definition, and is also unallowable.
Although the new rules may have little impact on theatre companies per se, arts publishers, service organizations and research bureaus may curtail their activities sharply rather than confront the complex ramifications of the new rules.
Taken together, the new rules severely limit contributions by nonprofit organizations to federal policy-making. In addition, as Independent Sectors’ O’Connell observed, the new rules “totally contradict all that the President stands for in promoting voluntary citizen participation in dealing with our nation’s problems and aspirations.” A variety of organizations, including Independent Sector and the American Civil Liberties Union, are exploring possible remedies to the situation. It is unlikely that the Administration will withdraw the rules or that the Republican-controlled Senate will allow a congressional override of the OMB.
The only other option is nullification of the OMB rules in the courts.
NEA Funds 190 Theatre Companies
Armed with more than 4,000 pages of supporting materials, the National Endowment for the Arts Theatre Advisory Panel met in Washington, D.C. for five intensive days during March to consider 389 applications for support under the Theatre Program’s Professional Companies category for fiscal 1984.
The panel’s recommendations were brought before the National Council on the Arts at its May 11-12 meeting. Of the 389 applications, the Council approved grants totalling $7.25 million to 190 companies. Although the total awarded was $800,000 above the $6.6 million given under the Professional Companies category in 1983, the total remains well below the $7.7 million distributed through the category in 1982.
The 190 recipient companies number 27 fewer than in 1983—81 below 1982’s 271—marking a significant decline from the 304 grants awarded in 1981. The 1984 grants range from $3,500 to $300,000, averaging $38,158. Last year, grants ranged from $2,500 to $275,000 and averaged $30,145.
Of the 190 companies, 21 were new grantees, 99 companies received increased support, 44 suffered a reduction in funding, and 26 were level-funded at the 1983 mark. Forty-eight previous-year grantees were dropped from the roster or did not reapply.
At its May meeting, the National Council also approved 14 grants totalling $100,000 under the Theatre Program’s Artistic Associates category. Designed “to enable professional theatres to strengthen their professional leadership” by engaging, on a full-time basis, mature professional actors, playwrights, choreographers, composers, directors and dramaturgs, the 14 grants—which ranged from $4,000 to $10,000—were approved from a field of 33 applications requesting a total of $249,000.
Also approved were eight grants of $12,500 each under the Director Fellows category. Designed to assist individual stage directors of exceptional talent in their early career development by providing opportunities for them to work with professional companies for a season, the eight grants were made from a field of 34 applications requesting a total of $426,000. Recipients are expected to be announced shortly.
Radio Grants
The National Endowment for the Arts has announced 79 radio grants to individuals and organizations in 24 states and the District of Columbia. The NEA Media Arts Program supports outstanding single productions and series for radio broadcast, radio workshops and residencies, conferences, research and other radio services. Theatre-related grants announced for 1984 include $4,000 to Mabou Mines (New York) for production of a series of English and German versions of Kafka’s parables; $6,000 to Other Theatre Joseph Chaikin, producer) for three half-hour radio collages employing dramatic performance and improvisation; and $58,000
to New York’s Radio Foundation for the second vear of the Radio Comedy Theatre, a series presenting the work of Bob and Ray, the Firesign Theatre and the Duck’s Breath Mystery Theatre.
