It’s election season. Your 501(c)(3) nonprofit organization or church may be wondering if it can, and if so, to what extent, support or oppose political candidates or issues. There are two prohibitions found in section 501(c)(3) of the Internal Revenue Code that your organization must follow.
Under the code, your organization must ensure that “no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation” and that it “does not participate in, or intervene in (including the publishing or distributing of statements), any political campaignon behalf of (or in opposition to) anycandidate for public office.” Thus, the two prohibitions can be summarized as (1) no substantial lobbying activity and (2) absolutely no political campaign activity. Failure to comply may result in loss of the organization’s tax-exempt status.
(1) Substantial lobbying activity
What is lobbying? Lobbying activity includes contacting, or urging the public to contact, legislators for the purpose of proposing, supporting, or opposing legislation, or the organization advocating the adoption or rejection of legislation. Some activities are not considered lobbying, which may include conducting educational meetings, preparing and distributing educational materials, and considering public policy issues in an educational manner.
How much is too much lobbying? The code’s ban is on substantial lobbying. Unfortunately, there is not much clear guidance on what “substantial” means. In determining what is substantial, the IRS considers a variety of factors, including the time and expenditures devoted to the lobbying activity. Thus, if your organization does choose to do some lobbying, it should ensure that the time and expenditures spent are as little as possible (this blog does not address an election a non-church organization can potentially make under section 501(h) of the code).
(2) Political campaign activity
Contributions to a candidate’s campaign or publicly supporting or opposing a candidate clearly violates the prohibition. However, certain voter education activities conducted in a non-partisan manner does not constitute prohibited political campaign activity, nor would a voter registration drive, as long as there is no evidence of bias in favor or opposition of a candidate.
It is important to note that this prohibition isn’t intended to restrict free expression on political matters by leaders of your organization if those leaders are speaking for themselves as individuals. However, the leaders should ensure that there is no potential attribution of their comments in official organization publications or at official organization functions. A prudent approach is for leaders to clearly indicate when speaking or writing on such matters that their comments are personal and not intended to represent the views of the organization.
In conclusion, if your 501(c)(3) organization is considering participating in, or is already participating in, lobbying or activities that may be considered political campaign activity, be sure to contact legal counsel to help evaluate whether your organization is not violating any of the prohibitions.
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