Six Advantages to Giving to 501(c)(4) Organizations

In part two of this three-part blog series, Tuti B. Scott, a philanthropy and gender equity strategist and former board chair at Tides, details the advantages of giving to 501(c)(4) organizations.

Part one: Why Funding 501(c)(4) Organizations is Critical for Systemic Change

Philanthropists can play a crucial role in fostering systemic change by funding a diverse ecosystem of organizations, including 501(c)(3)s, 501(c)(4)s, political action committees (PACs), and other legal structures. And, importantly, funding them for the long-haul. Funding an array of organization types ensures that different strategies and tactics can be employed and increases the likelihood of achieving lasting change.

Adding 501(c)(4) giving to your philanthropy is one of the most effective strategies. Here are just a few reasons why:

1. Complementing 501(c)(3) Efforts

501(c)(4) organizations often work in tandem with their 501(c)(3) counterparts, creating a powerful synergy. While 501(c)(3) organizations focus on education, research, and service provision, 501(c)(4)s amplify these efforts through power-building, advocacy and lobbying. By funding both types of entities, philanthropists can address issues from multiple angles, and ensure a more effective strategy.

2. Flexibility and Strategic Impact

Supporting 501(c)(4) organizations allows donors to adopt a more flexible and strategic approach to their giving. These organizations can respond quickly to emerging issues and opportunities, engaging in forms of action and advocacy that are not possible for 501(c)(3)’s. This flexibility enables them to achieve both immediate and long-term impact, addressing urgent needs while building power towards change.

3. Driving Systemic Change

Systemic change requires influencing the policies and power structures that perpetuate inequality and injustice. 501(c)(4) organizations are uniquely able to challenge these structures through advocacy and political engagement. Supporting these organizations helps create a more equitable society by pushing for reforms in areas such as criminal justice, immigration, reproductive freedom, and economic inequality.

4. Urgency and Scale

Issues such as climate change, racial injustice, and threats to democracy demand urgent attention and funding. In 2022 there was $230 billion in donor-advised funds (DAFs) sitting unused. Mobilizing these resources towards 501(c)(4) organizations would significantly accelerate progress.

5. Unlimited Lobbying and Advocacy

501(c)(4) entities can engage in unlimited lobbying and advocacy activities, directly influencing legislation and public policy. Supporting these organizations allows donors to contribute to policy changes by addressing the structural problems that under issues like health care reform, environmental protection, and civil rights.

6. Electoral Engagement

501(c)(4) organizations can participate in electoral activities, such as endorsing candidates and engaging in partisan voter outreach. This is game-changing for electing leaders who support progressive policies and social justice. Funding these organizations enables them to mobilize voters, run impactful campaigns, and ensure elected officials act on the needs of marginalized communities.

Opportunities for Investment

Numerous successful movements have demonstrated the power of 501(c)(4) organizations and how they can achieve significant systemic change outcomes. Here are a handful of examples.

• Groundswell Action Fund has supported diverse BIPOC and women-led initiatives nationwide, influencing policies on reproductive justice and immigrant rights.
• MVP Climate Vote Fund has regranted to climate-forward organizations, advancing environmental policies and protections across the country.
• Women Donor’s Network Action Fund is moving resources to drive gender justice wins and supporting emerging c4 infrastructure and capacity to build toward progressive governing power.
• Tides Healthy Democracy Fund deploys charitable 501(c)(3) funds to support the charitable work of organization that amplify the political power of communities that face ongoing discrimination in elections. More than half of Healthy Democracy Fund grants go to 501(c)(4) groups.