Sen. Hillary Rodham Clinton (D-N.Y.) will not play as prominent a role as first expected in a new organization designed to counter the national Republican message in the 2004 campaign and beyond, sources familiar with the group said Wednesday.

Clinton will still be involved in fundraising but will not have an official role in the as-yet-unnamed group, due in part to concerns that her involvement could limit the scope of its activities.

The Democratic organization, which will have two separate components, will also likely have a board of directors, sources said, but Members of Congress will not sit on it for similar reasons.

Under the Bipartisan Campaign Reform Act passed in the 107th Congress, Members cannot be directly affiliated with any group that raises soft, nonfederal money from its donors.

Clinton’s role has remained consistent throughout the inception of the group, and she continues to believe it fills a need within the party, according to her aides.

“This [organization] is bigger than any one person,” said one Democratic strategist, who called Clinton’s lessened role “a testament to its success.”

However, a number of prominent Democratic staffers, including many with ties to the New York Senator and her husband, former President Bill Clinton, will be heavily involved in the effort.

Former Clinton White House Chief of Staff John Podesta, now a professor at Georgetown University’s law school, will serve as president of the organization; Laura Nichols, former communications director for Rep. Richard Gephardt (D-Mo.), will be the group’s senior vice president and will handle the majority of its day-to-day activities.

Doug Hattaway, who served as a spokesman for Al Gore’s 2000 presidential campaign, will be a consultant to the committees; Neera Tanden, who worked in the Clinton White House policy shop and was deputy campaign manager for Hillary Clinton’s 2000 Senate campaign, will also have a position within the organization.

“It has the potential with the people putting it together to create itself as the intellectual center” of the party, said a Democratic observer.

There will be two components to the effort: a 501(c)3 nonprofit organization that will serve as a Democratic think tank and clearinghouse of ideas, and a 501(c)4 group that will function as a rapid-research and response operation and will dabble more directly in political affairs. Both groups are referred to by their designation in the Internal Revenue Service tax code.

“The goal is to take the old-fashioned notion of the Heritage Foundation and build an operation that can take the Democratic message and Democratic policies into facets beyond Capitol Hill,” said one Democratic strategist familiar with the group.

The twin entities create a “purity of academics and ideas with just enough political flavor,” one observer noted.

Some have suggested such a powerhouse group could create a conflict with the Democratic National Committee, which has traditionally served as the prime communications center of the party.

A DNC spokeswoman did not return a call for comment on the issue.

Fundraising activities for the two committees have already begun, although details about their progress remained sketchy.

Both the 501(c)3 and the 501(c)4 can raise money in unlimited chunks and do not have to reveal their donors. Contributions made to the 501(c)3 are tax-deductible as well.

“The donor reaction has been very enthusiastic,” said one Democrat, who spoke on the condition of anonymity. “Republicans have had this kind of infrastructure for years. Progressive donors understand the urgency for us to build our own.”

Sen. Clinton is seen as an integral part in the early financial success of the group. In only her third year in office, she has already emerged as one of the brightest fundraising stars in the Democratic Party.

After raising and spending better than $41 million in her 2000 victory over then-Rep. Rick Lazio (R), Clinton formed a leadership political action committee, HILLPAC, which doled out $3.2 million to 25 Senate candidates and 86 House candidates in the 2002 cycle.

Despite her fundraising activity, Clinton has said she is not interested in the race for the Democratic presidential nomination in 2004. She is, however, considered a leading candidate in 2008 if Democrats fail to defeat President Bush next year.

Because of the relative dearth of fundraising regulations placed on political groups like the one the Democrats have started, they have become an attractive outlet for donors looking to influence elections.

One example of the expanding political role for these nonprofits comes in South Dakota, where two conservative activists affiliated with a 501(c)4 group are targeting Senate Minority Leader Tom Daschle (D-S.D.).

The Rushmore Policy Council, as the committee is known, has pledged to raise and spend $800,000 to “destroy” the career of Daschle. The group has its own 501(c)3 counterpart known as the South Dakota Family Policy Council.

A recent ruling by the Internal Revenue Service regarding a charitable organization with connections to former Speaker Newt Gingrich (R-Ga.) seems to have opened the door for even 501(c)3s to engage in more overt political activity.

The group, the Abraham Lincoln Opportunity Fund, had its tax-exempt status revoked in 1998 because of its too-close connection to GOPAC, Gingrich’s leadership PAC. But the IRS reinstated ALOF’s tax-exempt status in early April.