January 17, 1997

More Bang for Their Buck

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On December 21, 1996, Newt Gingrich apologized for “unintentionally” using nonprofits for partisan purposes, a violation of U.S. tax code. That means contributors to these nonprofits — who were supporting causes such as Newt’s televised college course — didn’t pay their full share of taxes.

So who exactly got this pro-Newt tax break, and how much did they save? We took a look at the 1993-1994 contributor list to the Kennesaw State College Foundation’s Renewing American Civilization Project. Kennesaw State is one of three nonprofits (along with the Progress and Freedom Foundation, and the Reinhardt College Foundation) that Newt allegedly misused. (Under U.S. tax code, nonprofits that advocate political causes are tax-exempt, but contributions to them are not tax-deductible.)

We estimate that these contributors saved a total of $46,446 in tax deductions* — deductions they would not have been able to take had they contributed to explicitly partisan enterprises. Mother Jones readers will recognize many of the names on the list as contributors to GOPAC and other right-wing causes:
Donor
Amount
Savings
Randolph Foundation $50,000
**
Associated Builders $2,000
$680
Employment Policies Institute $25,000
**
Cracker Barrel $25,000
$8,500
Health South $15,000
$5,100
Southwire $5,000
$1,700
Mrs. Roy Richards $3,000
$840
Federal Express Corporation $5,000
$1,700
Northwestern Nat’l Life Insurance Co. $5,000
$1,700
Robert Yellowlees $500
$140
WHI, Inc. $5,000
$1,700
RJR Nabisco $5,000
$1,700
Metropolitan Atlanta Community Foundation $25,000
**
Turner Broadcasting $5,000
$1,700
M/M Charles Baker $100
$28
Lockheed $3,000
$1,020
HBR Capital, Ltd. $10,000
$3,400
Richard J. Fox Foundation $20,000
**
Dr. Philip O’Connor $100
$28
The McCamish Foundation $50,000
**
Scientific Atlanta $2,500
$850
Space Master, Inc. $20,000
$6,800
M/M Fleming $1,000
$280
Claude Lambe $10,000
$2,800
Lockheed-Georgia Co. $7,000
$2,380
Coca-Cola $10,000
$3,400
TOTAL $139,200
$46,446

*In estimating the deductions, we applied average tax brackets of 28 percent for people and 34 percent for companies.

**The foundations on the list are tax-exempt, and therefore did not receive tax deductions for their contributions. However, if they contributed to the Kennesaw State College Foundation with the knowledge that it was violating tax laws (as it is alleged to have done), they could have jeopardized their own tax-exempt status.

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WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

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