Raleigh, N.C. — Raleigh's version of the Cold War heated up this year when a controversial political memo authored by a liberal group surfaced and raised hackles among Republican policy makers.
The stir caused by the America Votes memo, originally attributed to Blueprint NC, and counter punches from groups like Americans for Prosperity brought to the surface a spy-versus-spy game of white papers, grass roots organizing, research and lobbying that usually shows up in more subtle ways.
A complete picture of nonprofit lobbying in the state capitol would involve trade groups for professions ranging from beer wholesalers to midwives. A few well-heeled independent organizations also manage to straddle the political fray, such as the North Carolina Chamber, or have constituencies based on geography more than politics, such as the North Carolina League of Municipalities.
But when legislative battles rage over major issues like tax reform or Medicaid, the experts and spokesmen for two loosely affiliated networks of not-quite-partisan nonprofit groups go to work.
For example, as a bill cutting North Carolina's estate tax began its run through the legislative process, an analyst from the North Carolina Budget and Tax Center was the only non-legislator to speak to the bill before the House Finance Committee.
"Repealing the estate tax will not improve economic outcomes," said Cedric Johnson, reeling off facts and figures about how many people are affected by what Republicans call "the death tax." Portions of his analysis would be cited by House Democrats throughout that meeting and during floor debate.
Johnson's group is part of the North Carolina Justice Center, the grand dame of liberal-leaning organizations in the state capitol. On the other side, the John Locke Foundation heads a roster of conservative groups.
As Republicans faced a barrage of criticism from for their decisions to turn down federal funding for unemployment claims and expanding Medicaid, John Locke President John Hood penned a column titled "Why Raleigh told Washington No." It quickly made its way into the email boxes and social media feeds of Republican lawmakers and politicos, helping them to respond to constituents who saw their benefits being cut.
"They play a major role here," Rep. Pricey Harrison, D-Guilford, said of the nonprofit public policy groups. The legislature, she said, has limited staff and limited time to tackle complex issues.
Nonprofits provide fodder for friendly lawmakers, try to mobilize public sentiment for and against legislation and cultivate a network of go-to sources who are quoted by journalists throughout North Carolina. They are often quoted in committee and floor debates, and their influence comes to bear on everything from whether to serve chocolate milk in school cafeterias to what tax rates everyone in the state pays.
"If the John Locke Foundation and the Justice Center folks have both spoken on an issue, then you've definitely gotten the full spectrum of thought," said Rep. Tom Murry, R-Wake. Like Harrison, Murry said nonprofit policy organizations feed lawmakers need for information.
"They have the time and resources to do an in-depth analysis that sometimes our legislative staff, and definitely legislators, don't have time to do," he said.
Two 'families' dominate the conversation
Businesses ranging from dentists to golf courses to convenience stores have associations with regular meetings, lobbyists and, more often than not, an associated political action committee. While these groups can be influential when issues particular to their members come up, they don't cultivate the cache of impartial analysis the way that putatively nonpartisan think tanks do.
Some national groups also inform the conversation. Lawmakers on both sides of the aisle, for example, are members of the National Conference of State Legislatures, the American Legislative Exchange Council and the Council of State Governments.
Roughly a dozen groups make up the core of Raleigh's intellectual industrial complex, with a dozen others playing a larger or smaller role as specific issues arise. Although there are exceptions, the most frequently quoted and cited of these groups break down into two families, each with ties to one of two foundations that helps to fund their activities.
The Justice Center, Action NC, Progress North Carolina, Planned Parenthood and many other left-of-center groups can trace some part of their funding back to the Z. Smith Reynolds Foundation, a Winston-Salem based philanthropy founded as a memorial to the son of a tobacco magnate.
A handful of other funders also help bankroll liberal-leaning organizations. Among them is the A.J. Fletcher Foundation, named for the man who founded WRAL-TV and the foundation. His grandson, Jim Goodmon, is both president of WRAL parent Capitol Broadcasting Co. and chairman of the foundation's board.
However, despite the influence of A.J. Fletcher Foundation and other funders, Z. Smith Reynolds appears to provide the broadest common denominator for Raleigh's family of liberal groups.
Executive Director Leslie Winner is a former Democratic state senator, and its board includes a sitting Democratic state senator and a former Democratic congressman. Other board members and staff have ties to Democratic politicians or progressive causes.
Like many of the groups the foundation funds, Winner argues that it's unfair to simply dismiss Z. Smith Reynolds as a patron of liberal causes. The foundation has funded museums and other projects with no political affiliations, she said.
"I think it's overly simplistic," Winner said. "Are we more likely to fund groups that are working on issues like equity, inclusively, sustainability? Yes, those are values we hold."
Reynolds does not fund activities like lobbying and is not supposed to fund direct political involvement. However, Republicans have long complained that whether the foundation directly funds political activity or not, it is the nexus for groups who push left of center ideas.
That point was driven home in early February when a strategy memo describing how progressive groups can attack Gov. Pat McCrory and other Republican leaders began to openly circulate after it was forwarded by Blueprint NC, one of the groups funded by Z Smith Reynolds.
The family of more conservative public policy groups is tied together by the John William Pope Foundation. As with the liberal side of the equation, there are other big donors who work with a similar subset of groups to Pope, including businessman Bob Luddy and the E.A. Morris Charitable Foundation, but Pope retains the broadest reach.
Art Pope, son of the foundation's namesake and McCrory's budget director, is chairman of the foundation. Its allied groups have been much reviled by groups on the political left for years. Much as conservatives say Z Smith Reynolds is funding a network that attacks their political leadership, the Pope foundation is seen as one of the bigger cogs in the Republican message machine.
Over the years, Pope has dismissed that criticism. A summary of the foundation's mission says that it supports a network of organizations in North Carolina that "advocate for free markets, limited government, individual responsibility and government transparency."
The foundation also supports national groups, including the Heartland Institute, which regularly offers policy experts to reporters covering government stories, and the Federalist Society, a network of conservative lawyers whose North Carolina chapters hold judicial candidate and issue forums.
"Generally, there isn’t a requirement that a national public policy group be involved in North Carolina," said Dave Riggs, vice president of operations and programs at the Pope Foundation. "However, we often support national public policy groups that can provide education resources within the state."
Riggs, who answered questions via email, did not shy away from the fact that many of the Pope-funded groups are explicitly seen as politically conservative or libertarian.
"For the public policy groups that we support, yes, those labels are fair," he said. "We unapologetically support many conservative and libertarian public policy nonprofits, as well as other groups that don’t have an explicit right or left philosophical basis to their education effort."
Like Z Smith Reynolds, the Pope Foundation also supports cultural and other groups with little political involvement, and neither foundation is the end-all and be-all of their affiliates' fundraising.
"We raise lots of money – six figures, approaching seven figures – from other people," John Locke Foundation leader Hood said. While the Pope Foundation is an important donor, John Locke could carry on – in a more limited fashion – without its support, he said.
And just because they share a common donor, doesn't mean groups in either family will be in lockstep. Civitas and John Locke, for example, have offered different visions of tax reform.
Different groups take on different roles
The relationships are made more complex by the vagaries of nonprofit tax law. True charities, 501(c)3s, must steer clear of anything that might smack of political involvement and are limited in the amount of lobbying they can do. Social welfare organizations, organized under section 501(c)4 of the tax code, have more latitude to pursue a policy agenda and become involved in elections.
Often, groups will have two different arms under similar names to do different work. Americans for Prosperity, Progress North Carolina, Civitas and Action NC are all think tank brands that have both a 501(c)3 arm and an activist 501(c)4 group. The 501c(4) groups are the more aggressive voices during the legislative session and have been increasingly involved during political campaigns in recent years.
Americans for Prosperity's 501(c)4 group, for example, was an active player in the 2012 presidential campaign. In the same way, Progress NC Action, Progress North Carolina's 501(c)4, harangued McCrory about ethics throughout his 2012 campaign.
The differences between the groups are more legal fig leaf than legitimate difference. Even if they don't share the same boards, the dual arms of AFP, Progress NC, Action NC, Civitas and other split groups share common directors and common aims.
"Our role, quite frankly, changes with the times," said Americans for Prosperity North Carolina Director Dallas Woodhouse. "Our goals don't change, our beliefs don't change, but our tactics do."
Ideally, he said, AFP will get individual voters to pressure their lawmakers, although the group does hold lobby days to try to influence the legislature more directly. The task for the conservative group has shifted now that the GOP has taken power, Woodhouse said.
"In the long run, should the Republicans hold on to their majorities, we have a role in holding them to what they ran on, keeping their feet to the fire," he said.
Other groups go to pains to define their mission more broadly and chafe at being put in a political pigeon hole.
"If you're really serious about solving poverty, you can't work on just one area and you can't just work using one strategy or tactic," said Jeff Shaw, director of communications for the North Carolina Justice Center.
The Justice Center is home for a suite of liberal-leaning brands: N.C. Policy Watch, a journalism project that both publishes on the web and provides expert sources, the Budget and Tax Center, a fiscal policy research arm, and the Workers Rights Project, which provides legal representation to immigrant workers and their families.
Asked whether the Justice Center is a "liberal" group, Shaw said, "We don't think that should be the top-line descriptor." Rather, he said, the center would prefer to be known as a research organization.
Still, the Justice Center, John Locke and several other groups have done enough advocacy work at the General Assembly that members of their staff have registered as lobbyists, although they're advocating for a particular set of ideas rather than any one particular interest.
Other groups are not directly engaged with either the legislature or in public advocacy but still play a role in shaping the conversation.
"We consider ourselves an infrastructure group," said Sean Kosofsky, director of Blueprint NC. "Our funders don't want us out in front."
Both Republican operatives and conservative think tanks jumped on the opportunity when a strategy memo that called for tearing down GOP leaders surfaced and was originally cited as the work of Blueprint NC. It has since been attributed to America Votes, one of dozens of nonprofits Blueprint helps with both strategy coordination and more mundane tasks.
In the days following, both Americans for Prosperity and Civitas circulated a list of Blueprint NC partners to lawmakers, looking to undercut both any state funding and credibility for the liberal groups.
Deciding who to believe
"We pay attention to ideas, no matter where they come from," said Senate President Pro Tem Phil Berger. "All these groups are part of the background noise ... I don't wake up every morning and think, 'What does John Hood have to say today.'"
Politicians who are familiar with the public policy landscape may have an easier time vetting information because they're familiar with the various political perspectives of the groups dishing it out. For newspaper readers and television viewers, that task may be harder. Often, groups are referred to as "liberal" or "conservative" with little other context.
"As far as credibility goes, the Justice Center has a long record of really excellent research that should lend us more credibility," Shaw said. "For me, as someone who believes that facts matter, that to me is our really strong point."
In some cases, the policy group and the news outlet are one. John Locke, for example, publishes Carolina Journal, which carries opinions, legislative coverage and investigative pieces. Hood said he keeps the print product both because he came from a print background and it allows him to better target who his group's work is getting in front of.
"I can figure out who I want to be reading Carolina Journal and send it to them," he said, adding that his circulation list includes the likes of county commissioners and city council members.
But no matter how good the group, others say it is better to read everything out of the policy arena with a jaundiced eye.
"They should view that information with the same trust or skepticism they hold for their local newspaper and TV station. Everyone should investigate for themselves the facts or information presented by any outlet," said the Pope Foundation's Riggs.