The Michigan Daily is quite right, though for all the wrong reasons, in its condemnation of the Houses of Worship Political Speech Protection Act (Onward Secular Soldier, 2/7/02).

Churches and 501(c)3 non-profits are exempt from taxation because they don"t engage in politics. That"s the bargain they"ve made. Political advocacy or activism is explicitly prohibited for any organization trying to secure tax-exempt status as a 501(c)3 corporation. We know. We worked for two of them, one an umbrella organization serving other 501(c)3 volunteer organizations, the other a think tank. Every year, our organizations had to prepare a lobbying disclosure, attesting to the fact that they did not engage in any lobbying or attempts to directly influence legislative activity or budgetary decisions.

The rationale for this is simple: Socially beneficent activity is something that American citizens, through our government, have decided to reinforce by exempting it from taxation, a burden carried by all other people and organizations in the United States. Organizations that get a pass from the taxman don"t get to bend his ear, plain and simple.

When those organizations attempt to lobby the government, support specific candidates, etc., they are going outside the scope of the social purpose for which they were granted exemption. Organizations created for the purpose of directly influencing legislative activity or fostering social change are classified as 501(c)4 corporations by the IRS. 501(c)4 corporations are still non-profits, but they are advocacy non-profits and they are required to pay taxes. This is why the National Abortion and Reproductive Rights Action League (NARAL), for example, has both: The NARAL Foundation is a 501(c)3 and their lobbying arm, NARAL, is a 501(c)4. Their political speech is not restricted at all they simply can"t use tax-exempt dollars to finance it. Neither can we. Donations to 501(c)3s are tax-deductible, whereas donations to 501(c)4s are not. Tax exemption comes with a needed price. Political action committees and lobbying groups must pay taxes. Churches and 501(c)3 non-profits do not.

If the ban on 501(c)3 advocacy were lifted, there would be a rush of political advocacy organizations seeking non-profit status. There would be no end to the list of individuals and organizations seeking non-profit tax exemption. The Daily"s proposal would create America"s biggest tax dodge, and it would do it for free. Does the Daily want Tom Monaghan to be able to found his own tax-exempt lobbying group to foist a new theocracy on America? We can"t stop him from building his cross or arguing against abortion rights, but at least we have the comfort of knowing he isn"t doing it tax-free.

Representative Walter Jones (R-N.C.), has proposed this legislation in order to grant houses of worship the right to endorse candidates for political office. It seems that Jones wants to give churches an increased role in the exercise of governance, while denying other non-profits that right. Removing the ban on activism by tax-exempt organizations privileges them at our expense. Frankly, we"d rather keep church and state separate. If they want to have a say in our governance, let them pay taxes, like any 501(c)4 organization.

As an aside, the Daily is way off base in its observation that "it is noteworthy to mention that non-profit organizations (excluding religious ones) tend to have by their very nature a liberal bent." This is just plain wrong. Non-profits, like people, come in all shapes and sizes and all political and social orientations. While many non-profits fall into the left-right continuum, far more are entirely apolitical, focusing instead on their individual missions of helping others, as they should.

P. Baldwin is the former Director of Finance and Operations at Sister Cities International. J. Baldwin is a former Public Affairs intern at the Cato Institute.