Legal Framework

Every action AFNPT takes is grounded in federal and state law. This page documents the legal authorities, IRS codes, and regulatory frameworks that govern our work and the entities we examine.

Educational Purpose Disclaimer

All content published by Americans For Non-Profit Transparency (AFNPT) is presented for educational and informational purposes only.

The analyses, opinions, and commentary expressed on this platform represent AFNPT's educational interpretation of publicly available government records. This content does not constitute:

  • Legal advice or legal opinion
  • Accusations of criminal wrongdoing against any individual or entity
  • Statements of proven fact beyond what is documented in cited government records
  • Tax advice or guidance on compliance matters
  • Endorsement or opposition to any political candidate or party

All individuals and entities discussed on this platform are presumed to have acted lawfully unless determined otherwise by competent legal authority. AFNPT presents public records and raises questions about transparency — we do not make legal determinations.

Where AFNPT offers analysis, interpretation, or opinion, it is clearly labeled as such (typically in boxes marked "AFNPT Educational Analysis"). Readers are encouraged to review the cited source documents independently and form their own conclusions.

If you believe any content on this platform contains a factual error, please contact us and we will promptly review and correct the record.

First Amendment Protections

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
— First Amendment to the United States Constitution

AFNPT's publications constitute protected speech under the First Amendment. The Supreme Court has consistently held that commentary on matters of public concern — including the operations of tax-exempt organizations that benefit from public subsidies — receives the highest level of constitutional protection.

Key precedents supporting our work:

  • New York Times Co. v. Sullivan, 376 U.S. 254 (1964) — Public figures must prove "actual malice" to prevail in defamation claims. Organizations that solicit public donations and enjoy tax-exempt status are subject to heightened public scrutiny.
  • Hustler Magazine v. Falwell, 485 U.S. 46 (1988) — Opinion and commentary about public figures and public organizations are protected, even when provocative.
  • Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) — Statements of opinion based on disclosed facts are protected speech when the underlying facts are accurately presented.

AFNPT takes care to distinguish factual claims (sourced to government records) from our analytical opinions (clearly labeled). This practice provides robust legal protection under established First Amendment jurisprudence.

California Anti-SLAPP Statute

California's Anti-SLAPP statute (Code of Civil Procedure §425.16) provides a powerful procedural mechanism to dismiss frivolous lawsuits filed to silence public participation and free speech. "SLAPP" stands for Strategic Lawsuit Against Public Participation.

Key Provisions:
CCP §425.16(b)(1) — A cause of action arising from any act in furtherance of the right of free speech in connection with a public issue shall be subject to a special motion to strike
CCP §425.16(c)(1) — If the court grants the motion, the defendant is entitled to mandatory attorney's fees and costs
CCP §425.16(e) — Protected activity includes written or oral statements made in a public forum in connection with an issue of public interest
Two-step test: (1) Does the claim arise from protected activity? (2) Can the plaintiff demonstrate a probability of prevailing?

Why this matters for AFNPT: As a California-governed organization publishing educational commentary about matters of public concern (nonprofit transparency, use of tax-exempt funds, foreign influence), AFNPT's publications fall squarely within the Anti-SLAPP statute's protection. Any defamation suit filed against AFNPT for its educational analysis of public records would be subject to a special motion to strike under §425.16, with mandatory fee-shifting to the plaintiff if the motion is granted. Over 30 states and the District of Columbia have enacted similar Anti-SLAPP protections.

Read CCP §425.16 (California Legislature) ↗

IRS Code — Tax-Exempt Organizations

26 U.S.C. §501(c)(3) — Charitable Organizations

Section 501(c)(3) of the Internal Revenue Code grants tax-exempt status to organizations "organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes."

Key Requirements:
• Must operate exclusively for stated exempt purpose
• No part of net earnings may inure to the benefit of any private shareholder or individual
• No substantial part of activities may be carrying on propaganda or attempting to influence legislation
• May not participate or intervene in any political campaign for public office
• Must file annual Form 990 with the IRS (public record)

Why this matters: When a 501(c)(3) organization's expenditures appear inconsistent with its stated educational mission — such as payments to shell-like entities for vague "research" or undisclosed foreign activities — these are legitimate areas for public inquiry under the "exclusively" requirement.

Read full text at Cornell Law Institute ↗

26 U.S.C. §501(c)(4) — Social Welfare Organizations

Section 501(c)(4) grants tax-exempt status to civic leagues or organizations "operated exclusively for the promotion of social welfare." Unlike 501(c)(3) organizations, 501(c)(4)s may engage in political activities as long as that is not their primary purpose.

Key Distinctions from 501(c)(3):
• Donations are not tax-deductible for donors
• May engage in limited political activity
Not required to disclose donors publicly
• Must still operate primarily for social welfare purposes
• Must file Form 990 (public record)

Why this matters: 501(c)(4) organizations are frequently used as "sister organizations" to 501(c)(3)s, allowing activities that the charitable arm cannot legally conduct. Understanding the relationship between a 501(c)(3) and its affiliated 501(c)(4) is essential for transparency.

Read full text at Cornell Law Institute ↗

IRS Form 990 — Annual Reporting Requirements

Under 26 U.S.C. §6033, most tax-exempt organizations must file an annual information return (Form 990) with the IRS. These filings are public records available through the IRS, ProPublica Nonprofit Explorer, and other databases.

Key Schedules AFNPT Analyzes:
Schedule B — Schedule of Contributors (restricted disclosure)
Schedule F — Statement of Activities Outside the United States
Schedule I — Grants and Other Assistance to Organizations, Governments, and Individuals
Schedule J — Compensation Information for Officers, Directors, and Key Employees
Schedule R — Related Organizations and Unrelated Partnerships
Part VII — Compensation of Officers, Directors, Trustees, Key Employees
Part IX — Statement of Functional Expenses

Public access: Under 26 U.S.C. §6104(d), tax-exempt organizations must make their Form 990 available for public inspection. AFNPT accesses these filings through legitimate public databases and analyzes them for educational purposes.

Foreign Agents Registration Act (FARA)

The Foreign Agents Registration Act (22 U.S.C. §611 et seq.), enacted in 1938, requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, activities, receipts, and disbursements.

Key Provisions:
22 U.S.C. §611(c) — Definition of "foreign principal" (includes foreign governments)
22 U.S.C. §612 — Registration statement requirements
22 U.S.C. §614 — Filing and labeling of political propaganda
22 U.S.C. §616 — Public examination of official records
22 U.S.C. §618 — Penalties (up to 5 years imprisonment and/or $250,000 fine)

FARA registrations are public records maintained by the DOJ's National Security Division and available at efile.fara.gov. AFNPT downloads, analyzes, and presents these public records for educational purposes.

Why this matters for nonprofit transparency: When domestic nonprofit organizations have financial or operational connections to entities registered under FARA as agents of foreign governments, the American public has a legitimate interest in understanding those connections — particularly when the nonprofit's stated mission is domestic education and the foreign agent's contract involves influence campaigns targeting American citizens.

California Nonprofit Law

California has some of the most comprehensive nonprofit oversight laws in the United States, administered by the California Attorney General's Registry of Charitable Trusts.

Key California Statutes:
CA Gov Code §12580-12599.10 — Supervision of Trustees and Fundraisers for Charitable Purposes
Requires registration with the AG, annual financial reporting, and compliance with charitable trust principles.
CA Gov Code §12586 — Charitable Purpose Requirement
Requires charitable organizations to use funds consistent with the charitable purpose for which they were solicited.
CA Corp Code §5110-6910 — Nonprofit Corporation Law
Governs the formation, operation, and dissolution of nonprofit corporations in California.
CA Bus & Prof Code §17510-17510.95 — Charitable Solicitations
Regulates charitable solicitations and requires disclosure of how donated funds will be used.

Why California law matters: Many of the entities examined in AFNPT's investigations are incorporated in or solicit donations from California. The Show Faith by Works LLC FARA registration (targeting California churches) and various nonprofit entities operating in California are subject to these state-level oversight requirements.