The result is that charities will need to either restrict their involvement in ballot initiatives or drop out of the federated campaign. Along with all other employers, nonprofits would be burdened with new, onerous paperwork tasks to comply with the requirements of Proposition 226 or face civil or criminal penalties. This means that nonprofits would need to verify that payroll deductions are not used for political purposes or circulate and collect employee authorization forms, and must maintain records on charities' activities and employees' donations. Proposition 226 will adversely affect workplace charitable giving campaigns. Because of all of the above factors with impacts on charities, employees, and employers Proposition 226 will likely lead to a substantial drop in workplace participation in charitable giving campaigns operated through payroll deductions.
Employers participate in workplace giving campaigns on a voluntary basis.
To the extent that burdensome requirements are imposed on them, coupled with the potential of civil and criminal penalities, employers may simply choose not to participate. The United Way plans to engage on a referendum that deals with law suits against volunteers. They must notify every employer that participates in the United Way campaign through a payroll deduction plan ahead of time. Employers must notify each employee that the United Way will use a portion of payroll contributions for political purposes. Attached to the employee pledge card must be a form that the employee must sign that states that he or she agrees that the funds can be used for such purposes.