More Bang for Their Buck

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:


Randolph Foundation $50,000
Associated Builders $2,000
Employment Policies Institute $25,000
Cracker Barrel $25,000
Health South $15,000
Southwire $5,000
Mrs. Roy Richards $3,000
Federal Express Corporation $5,000
Northwestern Nat’l Life Insurance Co. $5,000
Robert Yellowlees $500
WHI, Inc. $5,000
RJR Nabisco $5,000
Metropolitan Atlanta Community Foundation $25,000
Turner Broadcasting $5,000
M/M Charles Baker $100
Lockheed $3,000
HBR Capital, Ltd. $10,000
Richard J. Fox Foundation $20,000
Dr. Philip O’Connor $100
The McCamish Foundation $50,000
Scientific Atlanta $2,500
Space Master, Inc. $20,000
M/M Fleming $1,000
Claude Lambe $10,000
Lockheed-Georgia Co. $7,000
Coca-Cola $10,000
TOTAL $139,200

*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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