Political Activity at your 501(c)(3) Nonprofit Organization

Every year we are asked by nonprofit executive directors about political activity at nonprofits. There are many important issues at stake and these issues without a doubt impact the work of your nonprofit organization and your stakeholders. Despite a recent court ruling holding corporations to have certain rights under the Bill of Rights, the IRS has long-standing restrictions on the advocacy and political activity of 501(c)(3) nonprofit corporations. This post focuses on 501(c)(3) nonprofit organizations and political advocacy and activity.

This blog is presented for informational purposes only. Please contact a licensed attorney if you have any specific questions or concerns about the political activity at your nonprofit organizations.

NO PARTISAN POLITICAL ACTIVITY

The IRS completely prohibits all partisan political activity. This means that 501(c)(3) nonprofit organizations cannot “directly, or indirectly, participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of or in opposition to any candidate for public office.”[1] Doing so could result in loss of the organization’s tax-exempt status, resulting in taxes being imposed on both the organization and its Board of Directors and officers.[2]

NONPARTISAN POLITICAL ACTIVITY IS USALLY OK

Organizations can engage in a variety of non-partisan political activities. This includes voter education, registration and ‘get out and vote drives’.[3] The most important factor is that these activities are not biased or favor one party or candidate over another.[4] 501(c)(3) organizations can engage in non-partisan activity designed to educate voters, such as public forums and the publication (print or electronic) of voter education guides.[5] It is also permissible to conduct voter education (where and how to vote) and registration.[6]

501(c)(3) organizations can also host candidates or have a legislative breakfast in which politicians come to discuss pertinent policy issues with key agency stakeholders. These candidate appearances are permitted as long as the organization provides equal opportunity to all political candidates seeking office and provides a fair, non-partisan forum.[8] Whether this activity constitutes political intervention will be determined by the surrounding facts and circumstances. Generally speaking, organizations should extend invitations to all candidates seeking the same office.

At the actual event, all candidates must be given an equal opportunity to participate. This includes both “the nature of the event” and the “manner of the presentation.”[9]

The IRS will consider all of the facts and circumstances surrounding these types of events when deciding whether the activity is non-partisan and permitted, or partisan and in violation of the political intervention ban.[10] Generally speaking, fairness and equal opportunity are the gravamen of this inquiry. Questions asked to the candidates must give both sides an opportunity to present his or her views on the topics being discussed.[11] The organization must also allow all candidates an equal chance to discuss and debate issues, and to present both sides of the issue.

This blog post is presented for informational purposes only. As always, consult a licensed attorney for specific, detailed advice about what activities are not allowed under the law.

For further information, please feel free to set up a consultation for your 501(c)(3) with our nonprofit attorney Jeff Fromknecht, Esq. . We look forward to helping your organization!

References:

[1] 26 C.F.R. § 1.501(c)(3)-(1)(b)(3)(i) and (ii).

[2] G. Lavarda, NONPROFITS: ARE YOU AT RISK OF LOSING YOUR TAX-EXEMPT STATUS?, 94 Iowa L. Rev 1473 (2009).

[3] IRS Rev. Rul. 2007-41 (2007).

[4] IRS Rev. Rul. 2007-41 (2007). “[V]oter education or registration activities conducted in a biased manner that favors (or opposes) one or more candidates is prohibited.” Id.

[5] N. Dacunha, SAFE LINKING FOR SECTION 501(C)(3) ORGANIZATIONS, 20 Taxation of Exempts 26 (2009).

[6] E. Kingsley, THE IRS EXPANDS ITS GUIDANCE ON CAMPAIGN ADVOCACY, 19 Taxation of Exempts 45 (2008).

[7] IRS Rev. Rul. 2007-41 (2007).

[8] IRS Rev. Rul. 2007-41 (2007). The IRS points out that the relevant facts and circumstances to be considered include: [1] “Whether the organization provides an equal opportunity to participate to political candidates seeking the same office; [2] Whether the organization indicates any support for or opposition to the candidate (including candidate introductions and communications concerning the candidate’s attendance); and [3] Whether any political fundraising occurs.” Id.

[9]IRS Rev. Rul. 2007-41 (2007).

[10] IRS Rev. Rul. 2007-41 (2007). The following factors are identified by the IRS as important in this inquiry: 1. Whether questions for the candidates are prepared and presented by an independent nonpartisan panel 2. Whether the topics discussed by the candidates cover a broad range of issues that the candidates would address if elected to the office sought and are of interest to the public, 3. Whether each candidate is given an equal opportunity to present his or her view on each of the issues discussed, 4. Whether the candidates are asked to agree or disagree with positions, agendas, platforms or statements of the organization, and 5. Whether a moderator comments on the questions or otherwise implies approval or disapproval of the candidates.

[11] IRS Rev. Rul. 2007-41 (2007).