Lawyer: ACC, NCAA moves may irk some, but not against nonprofit rules
Posted September 15, 2016
Raleigh, N.C. — Count Republican 8th District Congressman Richard Hudson among those peeved that the NCAA and the Atlantic Coast Conference have decided to move tournaments out of North Carolina over a state law that prohibits discrimination protections for gay and transgender people.
Hudson has threatened a congressional investigation into the "political theater" of the two collegiate athletic groups.
"If these multimillion-dollar, tax-exempt organizations were interested in social change and not making a political statement, they would proceed with their marquee events in North Carolina and enact any transgender bathroom policy they wanted," Hudson said in a statement. "This blatant political move, less than two months before the election, brings into question their tax-exempt status. This is an avenue we intend to explore."
Both the NCAA and the ACC are 501(c)(3) nonprofits. Under IRS rules, they can't attempt to influence legislation as a substantial part of their activities, and they can't campaign for or against a particular political candidate.
Raleigh attorney Ashley Perkinson, who advises nonprofits, said it's a common misconception that such organizations aren't allowed to advocate for issues. They actually have a lot of leeway as long as it's not their primary function, she said.
"501(c)(3)s can advocate on issues that are important to their core values. 501(c)(3)s can also take positions on legislation," Perkinson said. "There are some limits as to how much time and resources a 501(c)(3) can spend on lobbying efforts, but it is not something that's prohibited."
Moving games out of the state isn't something that would put the nonprofit status of the ACC or the NCAA at risk, she said.
"It's really a business decision on their part. It's a decision based on, according to the ACC, their core values, and it's not a direct political endorsement or opposition that would fall within the activities that the IRS would deem to be something that's political," she said.
Gov. Pat McCrory has accused both the ACC and the NCAA of "political retaliation" and said they should have allowed federal courts to sort out disputes over transgender rights.
He made his first public appearance Thursday since the state lost more than a dozen tournaments, speaking to business leaders in Charlotte. He blamed politics for the fallout from House Bill 2, noting the state is getting so much nationwide attention over the issue because of its prominent role in the presidential race.