Malcolm Rivera
Political campaigns are subject to tax under IRC section 527 and have filing requirements with the IRS. Non-profit organisations, on the other hand, are tax-exempt. However, they must not engage in political campaign activity or risk losing their tax-exempt status. This includes refraining from participating in or intervening in any political campaign on behalf of or in opposition to any candidate for elective public office. Non-profit leaders can, however, publicly endorse a candidate in their individual capacity, as long as they do not communicate their endorsement through the non-profit and make clear that their comments do not represent the views of the organisation.
Are political campaigns considered non-profit?
| Characteristics | Values |
|---|---|
| Tax exemption | Political organizations are tax-exempt under IRC Section 527 but are required to file periodic reports with the IRS. |
| Political campaign activity | Nonprofits are prohibited from engaging in political campaign activity and may lose their tax-exempt status if they do so. |
| Voter registration and education | Nonprofits may conduct voter registration and education activities, but they must be non-partisan and not favor or oppose any candidate. |
| Endorsements | Nonprofit leaders can publicly endorse a candidate but must not use the nonprofit to communicate their endorsement or indicate that their views represent the organization. |
| Candidate appearances | Nonprofits may invite political candidates to speak at events, but the focus should be on non-political topics, and all candidates seeking the same office must be given equal opportunities to participate. |
| Legislative activities | Nonprofits must avoid engaging in substantial legislative activities or lobbying and must not urge members or employees to contact legislative bodies to propose, support, or oppose legislation. |
| Fundraising | Nonprofits should prohibit fundraising efforts related to political campaigns. |
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What You'll Learn
Nonprofits must not endorse or oppose political candidates
Nonprofit organizations are prohibited from directly or indirectly participating in or intervening in any political campaign or opposing any candidate for elective public office. This includes 501(c)(3) charitable nonprofits, foundations, or religious organizations. The IRS clearly states that these organizations must not engage in "political campaign activity" in exchange for their tax-exempt status.
The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations, as outlined by the Internal Revenue Service, prohibits any involvement in political campaigns for federal, state, or local elections. This means that nonprofits cannot endorse or oppose candidates or political parties and cannot make campaign contributions. They must also refrain from making public statements of position, either verbal or written, in favor of or against any candidate.
Nonprofits can, however, engage in nonpartisan election-related activities, such as voter registration, get-out-the-vote efforts, and voter education. These activities must be conducted without bias towards any candidate or political party. It is important for nonprofits to maintain a nonpartisan position to avoid the appearance of taking sides in an election, which could result in losing the trust of donors, volunteers, and the public.
While individual nonprofit staff, board members, and volunteers retain their free speech rights and can personally support candidates, they must ensure that their personal political positions are not associated with the organization. It is crucial for nonprofits to understand the regulations and carefully navigate their involvement in political activities to maintain compliance with IRS guidelines and uphold their tax-exempt status.
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Nonprofit leaders can publicly endorse candidates
Nonprofit organizations are prohibited from directly or indirectly participating in any political campaign or endorsing any candidate for elective public office. This includes any verbal or written statement made on behalf of the organization that favors or opposes a candidate. Nonprofits are also not allowed to make monetary contributions to political campaign funds.
However, individual nonprofit leaders can publicly endorse a candidate in their personal capacity, as long as they do not use the nonprofit to communicate their endorsement and make it clear that their views do not represent the organization's stance. Nonprofit leaders should refrain from making endorsements via the organization's platforms, such as websites, social media accounts, newsletters, or events.
To maintain neutrality, nonprofits should provide equal opportunities to all political candidates seeking the same office and avoid indicating any support or opposition to a candidate. They should also prohibit fundraising efforts and refrain from engaging in substantial legislative activities, such as lobbying. Nonprofits must be cautious when inviting political candidates to their events, ensuring that all candidates are invited and given relatively equal time and opportunity to participate.
While the IRS rarely enforces penalties for violations, nonprofits risk losing the trust of their stakeholders if their activities create the perception of partisanship. Therefore, nonprofit leaders who choose to endorse candidates must clearly distinguish their personal views from those of the organization.
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Nonprofits can conduct non-partisan voter registration
Nonprofits can and should engage in non-partisan voter registration and education activities. Under the Internal Revenue Code, 501(c)(3) organisations are prohibited from participating in any political campaign on behalf of or in opposition to any candidate for elective public office. However, this does not include non-partisan activities such as voter registration and get-out-the-vote drives. These are permitted and encouraged, as they help ensure that the electorate reflects the diversity of the communities that nonprofits serve.
Non-partisan voter registration activities must be designed to educate the public about the importance of voting without showing any bias for or against a candidate or party. This means that voter registration drives can be funded by nonprofits, but they must be careful to follow the rules and regulations that govern such activities. For example, voter registration drives funded by private foundations are more tightly restricted under section 4945(f) of the Internal Revenue Code.
Nonprofits can also engage in other non-partisan activities such as presenting public forums, publishing voter education guides, and providing resources to help voters register and vote, such as information on polling places, ballot measures, and absentee ballot requests. These activities are an important way for nonprofits to encourage voting and voter participation among their staff, board, clients, constituents, and communities.
It is important to note that if a nonprofit engages in partisan activities, such as favouring or opposing a candidate, it may risk losing its tax-exempt status and incurring other penalties. Therefore, nonprofits must be careful to maintain a non-partisan stance in their voter registration and education activities.
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Nonprofits can invite candidates to speak in a personal capacity
Nonprofits can invite political candidates to speak at their events, but they must be careful not to engage in prohibited political activity. This means that nonprofits must provide an equal opportunity to all candidates seeking the same office and must not indicate any support for or opposition to a candidate. Nonprofits should also prohibit fundraising efforts for political campaigns.
If a candidate for public office wishes to speak at a nonprofit event, the nonprofit should respond with a "no" if the candidate plans to talk about their campaign. However, if the candidate intends to discuss the nonprofit and topics related to its mission, and other candidates are also invited, then the nonprofit may accept the invitation. It is important to note that the nonprofit and the candidate should avoid referencing the candidacy or election and instead focus on the non-political capacity in which the individual is appearing.
Nonprofits play a crucial role in educating the public about issues affecting the community and those they serve through voter education activities and candidates' forums. However, they must maintain a non-partisan position and avoid any activities that could be construed as favouring or opposing a particular candidate or political party.
While individual nonprofit leaders can publicly endorse a candidate, they must ensure that they do not use the nonprofit to communicate their endorsement and clearly state that their comments do not represent the organisation's views. Nonprofits must be cautious not to engage in substantial legislative activities or lobbying, which could jeopardise their tax-exempt status.
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Nonprofits must not engage in fundraising for political campaigns
In the United States, political organizations are subject to tax under IRC section 527 and may have filing requirements with the Internal Revenue Service (IRS). These include political parties, campaign committees for candidates for federal, state, or local office, and political action committees.
Charitable nonprofits, foundations, or religious organizations registered under IRC Section 501(c)(3) are prohibited from directly or indirectly participating in or intervening in any political campaign or related activities. This includes making contributions to political campaign funds or making public statements of position (verbal or written) in favor of or in opposition to any candidate for public office. Voter education or registration activities must also be conducted in a non-partisan manner.
If a 501(c)(3) charitable nonprofit engages in partisan campaign activities, it may result in the denial or revocation of its tax-exempt status and the imposition of excise taxes. However, charitable nonprofits are permitted to engage in lobbying and legislative activities, which are treated separately under the law. These activities must not exceed an "insubstantial" amount of energy, finances, or other resources, as substantial lobbying may expose the organization to IRS penalties.
Therefore, nonprofits must not engage in fundraising for political campaigns to maintain their tax-exempt status and comply with IRS regulations. They can, however, engage in non-partisan voter engagement and education activities, such as voter registration drives and publishing voter education guides, to encourage participation in the electoral process without favoring any specific candidate or political party.
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Frequently asked questions
No, political campaigns are not considered non-profit. However, political parties, campaign committees for candidates for federal, state, or local office, and political action committees are all considered political organizations and are subject to tax under IRC Section 527. These organizations may have filing requirements with the IRS and must periodically report their contributions and expenditures.
No, non-profits are prohibited from participating in any political campaigning or intervening on behalf of or in opposition to any candidate for elective public office. Non-profit organizations that engage in prohibited political activity may have their tax-exempt status revoked and may be subject to excise taxes.
Yes, individual leaders of non-profits can publicly endorse a political candidate as long as they do not use the non-profit organization to communicate their endorsement and make it clear that their views do not represent the organization. Non-profit leaders must conduct any political activity outside of the organization's property and events and refrain from including personal opinions on campaign issues in any of the organization's publications.
