The Death Of 527s

The Club For Growth has become one in a long lines of activist organizations to reorganize as a 501(c)(4). What we are seeing here is the end of the 527 as a political organization.

The reasons for this are three-fold. First, 501(c)(4) groups do not have to disclose donors, though they cannot accept corporate donations.

Secondly, being organized as a 501(c)(4) gives groups much more flexibility to engage in a greater variety of political activities than that of a 527, especially when it comes to advertising.

Lastly, and probably most importantly, 501(c)(4)s have already received a Supreme Court ruling that guarantees their right to operate in this manner. Continuing to operate as a 527 will likely lead to immense court costs as Congress tries to rein in these organization which makes little sense when it is cheaper to reorganize as a 501(c)(4).

To be honest, I never really understood why 527s popped up in the first place when 501(c)(4)s already existed. Anyway, the politics of money just got a little more secretive. It's what happens when you try to legislate money out of politics, it will always find another path to the door, and it is often a worse path than the one you diverted.