A bill that would prevent nonprofits that receive state funding from spending money for political purposes received bipartisan support on the House floor last week, after Democrats criticized the legislation earlier this session.
HF72 would prohibit any organization that receives state funding, including nonprofits, from making political contributions or expending money for any political purpose. Language in the proposal says “state funding” includes direct appropriations or state grants.
It exempts organizations if they use “separate accounts for political activities and
for activities funded by state funding.”
“The entity or organization must not supplant its existing funding with state funding to make campaign expenditures or expend money for political purposes,” the bill says.
The bill’s chief author, Rep. Elliott Engen, R-White Bear Township, says the legislation—which passed almost unanimously on the House floor Friday—will help close a “dark money loophole” that allows nonprofits and other organizations to leverage taxpayer dollars for political gain.
“Under current law, there is an inherent and systemic conflict of interest between politicians and nonprofit organizations who can receive direct state aid that’s authored and passed by those same politicians,” Engen said. “Those nonprofits are eligible to spend in elections-related matters, even if it’s indirectly.”
The bill passed in the House by a vote of 130-3.
Overwhelming bipartisan support for the proposal came after opposition from Democrats last month when the bill was heard in the House Elections Committee, where it was approved 6-5 on a party-line vote. Democrats who opposed the bill during its committee hearing claimed its effect would be redundant, as there are already laws that prevent nonprofits from making political contributions.
“We make grants to 501(c)(3)s; they’re already prohibited from doing that by federal IRS law,” Rep. Emma Greenman, DFL-Minneapolis, said during a Feb. 17 hearing. “They cannot spend money on elections. That’s what makes you a tax-exempt charity.”
Engen noted that the law currently allows 501(c)(3) organizations to funnel money they receive from the state to other entities to make a political donation.
“In 2023, $1.1 billion in state appropriations went directly to an earmarked nonprofit organization, and they have statutory eligibility to donate directly to political groups. My bill, House File 72, it would end that,” Engen said on the House floor Friday.
Rep. Mike Freiberg, DFL-Golden Valley, encouraged his fellow Democrats to support the bill because he said it applies to corporations as well.
“The bill itself does not define organization or entity,” said Freiberg. “So this bill includes nonprofits but is not exclusive to nonprofits, which means it also covers corporations. Similarly, the bill does not define state funding. It says that direct appropriations and grants are state funding, but it does not say they are the only forms of government spending that qualify. So tax expenditures, tax credits, and tax deductions are examples of state funding.”
Engen said his bill would return political influence to Minnesota voters rather than well-funded organizations.
He highlighted anecdotal evidence where well-known nonprofit organizations receiving state funding were engaged in election outreach efforts. He cited one of those instances, where Second Harvest Heartland listed a job for a “voter engagement coordinator.” He mentioned that the organization’s CEO was a former high-level staffer for both former Gov. Mark Dayton and U.S. Sen. Amy Klobuchar.
“That to me sounds like an inherent conflict of interest,” Engen told his colleagues during a debate on the House floor.
“Minnesotans should not be forced to unknowingly fund people who are actively working against their own values—and that’s on both sides of the table,” Engen added. “This is a great start, we should continue to look for ways to make more transparent our elections-related spending.”
Hank Long
Hank Long is a journalism and communications professional whose writing career includes coverage of the Minnesota legislature, city and county governments and the commercial real estate industry. Hank received his undergraduate degree at the University of Minnesota, where he studied journalism, and his law degree at the University of St. Thomas. The Minnesota native lives in the Twin Cities with his wife and four children. His dream is to be around when the Vikings win the Super Bowl.
