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Non-Profit "Soft Money" Contribution Limit Rejected

By Neetal Parekh on September 21, 2009 | Last updated on March 21, 2019

What inspires the formation of a non-profit? Often, it is the desire to address a cause, support specific reform, and make a statement.  Well, non-profits who choose to make themselves heard by funding state and local candidates received a nod from the U.S. Court of Appeals of the District of Columbia this week.  

The case was brought by Emily's List, a 501(c)(3) non-profit organization that backs female Democratic candidates who support abortion.  The D.C. court held that Federal Election Commission (F.E.C.) rules restricting  the amount of "soft money" contributions-- unlimited donations by companies, individuals, unions, and political action groups to non-profits-- used to fund candidates violated the First Amendment.

The regulation under scrutiny was passed in 2005 required non-profit organizations such as Emily's List to spend "hard money" rather than soft money to fund election-related activities.  Hard money refers to the donations raised that were subject to limitations.  For example, money raised according to the regulation capping contributions made by individuals to $5,000 would be considered hard money.

What's next?

The case could reach the halls of the U.S. Supreme Court for final consideration and decision.  For now, though, Emily's List-- and other non-profits that back candidates-- are relieved to have the law back on their side.


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