Omar Bennett
Nonprofit organizations play a critical role in society by advocating for various causes and engaging in activities that promote civic participation. However, when it comes to political campaigns, the rules governing nonprofits' involvement become more complex. Nonprofits are prohibited from directly endorsing or opposing specific candidates or political parties, a restriction known as candidate electioneering. This restriction applies to 501(c)(3) organizations and is enforced by the Internal Revenue Service (IRS) to maintain the neutrality of these entities. While nonprofits cannot engage in partisan activities, they are encouraged to participate in non-partisan election-related activities such as voter registration, get-out-the-vote efforts, and voter education. The distinction between permissible and prohibited activities can be nuanced, and nonprofits must carefully navigate the legal landscape to avoid jeopardizing their tax-exempt status and maintain the trust of their stakeholders.
| Characteristics | Values |
|---|---|
| Tax exemption | Political organizations are tax-exempt under IRC Section 527 and must file periodic reports with the IRS. |
| Non-profit donations to political campaigns | Non-profits cannot donate to or endorse a political candidate or party. They can, however, engage in non-partisan election activities like voter registration and education. |
| Non-profit staff and political campaigns | Staff, board members, and volunteers can express personal support for a candidate but must not imply that their views are those of the organization. |
| Non-profit events and political campaigns | Non-profits can invite political candidates to speak at events but must provide equal opportunities to all candidates and not indicate support for any particular candidate. |
| Non-profit advocacy and lobbying | Advocacy and lobbying are permitted if they do not constitute a "substantial" amount of the non-profit's activities and are not partisan. |
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What You'll Learn
- Non-profit organisations can engage in advocacy and lobbying
- Non-profit organisations can lose tax-exempt status if they violate rules
- Non-profit staff can express personal support for a candidate
- Non-profit organisations can engage in non-partisan election-related activities
- Non-profit organisations can invite political candidates to speak at events
Non-profit organisations can engage in advocacy and lobbying
The IRS defines lobbying as "communicating with decision-makers about existing legislation and urging a vote for or against". It is considered a subset of advocacy, which is the process of stakeholders making their voices heard on issues that affect their lives and the lives of others at the local, state, and national levels. Advocacy also involves helping policymakers find solutions to persistent problems.
While non-profit organisations are allowed to engage in advocacy and lobbying, they must be mindful of the rules to avoid losing their tax-exempt status. For example, under the Internal Revenue Code, 501(c)(3) organisations are prohibited from directly or indirectly participating in any political campaign on behalf of or in opposition to any candidate for elective public office. This includes contributions to political campaign funds or public statements of position made on behalf of the organisation. Voter education activities, such as presenting public forums and publishing voter guides, are permitted as long as they are conducted in a non-partisan manner.
To safely engage in lobbying activities, non-profits can file Form 5768 with the IRS, which allows them to spend up to a certain threshold on lobbying activities without jeopardising their tax-exempt status. This is known as filing the "501(h) election". There are also state-level rules that non-profits must be aware of when engaging in advocacy and lobbying activities.
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Non-profit organisations can lose tax-exempt status if they violate rules
Non-profit organisations must follow specific rules to maintain their tax-exempt status. These rules are outlined in Section 501(c)(3) of the Internal Revenue Code. This section prohibits tax-exempt organisations from participating in or intervening in any political campaign, either directly or indirectly, on behalf of or in opposition to any candidate for elective public office. This includes making public statements or contributing to political campaign funds. Violating these rules can result in the loss of tax-exempt status and the imposition of excise taxes.
For example, a non-profit organisation may lose its tax-exempt status if it engages in partisan campaign activities, such as favouring one candidate over another or opposing a candidate. This includes activities such as voter education or registration that show evidence of bias towards a particular candidate or group of candidates. However, non-partisan activities, such as voter registration drives and get-out-the-vote efforts, are generally permitted and do not constitute prohibited political campaign activity.
Additionally, non-profit organisations must be careful not to devote a substantial part of their activities to lobbying or attempting to influence legislation. While lobbying is permitted to some extent, it should not be a significant focus of the organisation's resources or activities. If a non-profit engages in substantial lobbying activities, it may be subject to IRS penalties and lose its tax-exempt status.
Furthermore, non-profit organisations must ensure that they are not organised for or conducting activities that benefit private interests or violate fundamental public policies. Any violation of these rules may result in sanctions or revocation of tax-exempt status by the IRS. It is crucial for non-profit organisations to carefully navigate these regulations to maintain their favourable tax status and avoid penalties.
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Non-profit staff can express personal support for a candidate
Non-profit staff are permitted to express personal support for a candidate, but they must be careful to avoid their comments being perceived as the views of the organisation they work for. The IRS states that "the political campaign intervention prohibition is not intended to restrict free expression on political matters by leaders of organizations speaking for themselves, as individuals". However, for an organisation to remain tax-exempt under section 501(c)(3), leaders and staff cannot make partisan comments in official organisation publications or at official functions.
To ensure that their comments are not perceived as the views of their organisation, non-profit staff should include a disclaimer such as "As you know, we're a 501(c)(3) and can't endorse candidates" in one-on-one conversations or press releases. They should also include a disclaimer in the 'About/Bio' section of their personal email communications, personal social media platforms, and any other online platforms not affiliated with the organisation. This disclaimer could be something like "All personal views and opinions expressed are my own and do not represent or reflect the views of any organisation".
Non-profit staff should also refrain from using organisational resources, such as phones, copiers, computers, office space, email addresses, office addresses, organisation name, organisation online and social media platforms, donor or mailing lists, for supporting or opposing candidates. It is important for non-profit staff to be aware that their organisation may have its own policy on political activities, and they should ensure they are familiar with and compliant with this policy.
While non-profit staff can express personal support for a candidate, they should be mindful of the potential for their comments to be perceived as attempting to influence voters. This could result in their organisation being seen as intervening in a political campaign, which is prohibited for 501(c)(3) organisations. To minimise this risk, non-profit staff should work with an attorney when responding to a candidate's public statement and be deliberate and careful with their statements.
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Non-profit organisations can engage in non-partisan election-related activities
Non-profit organisations are permitted to engage in non-partisan election-related activities. Under federal tax law, 501(c)(3) nonprofits cannot endorse or oppose candidates or political parties, nor can they make campaign contributions. However, they may engage in nonpartisan election-related activities, including voter registration, get-out-the-vote efforts, and voter education. These activities are not considered partisan campaign activities or lobbying. Nonprofits play a crucial role in educating the public about issues that affect their communities and those they serve.
When conducting voter engagement and education, it is essential to do so in a non-partisan manner. This means refraining from supporting or opposing specific candidates and treating all candidates equally. For example, if you hold a candidate forum or brief them on issues, ensure that you provide a fair platform for all candidates. Voter registration and get-out-the-vote drives are also permitted, as long as they are conducted in a non-partisan way. Encouraging active citizenship and giving voice to the communities served is an important aspect of these activities.
Nonprofits should be cautious when participating in events or activities that may be perceived as partisan. While certain policy issues may align with the platforms of political parties, nonprofits must ensure that they do not explicitly endorse specific candidates or political parties. Being publicly affiliated with certain events, especially during an election year, may create the appearance of taking sides. It is important to remember that the risk of losing the trust of donors, volunteers, and the public is just as significant as legal penalties.
Additionally, lobbying and legislative activities are treated separately under the law. Lobbying involves communicating with decision-makers about existing legislation and urging a vote for or against it. Nonprofits are permitted to engage in lobbying as long as it does not constitute a "substantial" amount of their efforts or resources. 501(c)(4) social welfare organizations, unlike 501(c)(3) nonprofits, may engage in political contributions and support or oppose candidates as long as this is not their primary activity.
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Non-profit organisations can invite political candidates to speak at events
Non-profit organisations must be cautious when inviting political candidates to speak at their events. While non-profits can and should engage in advocacy, they must be careful not to intervene in or participate in any political campaign or endorse any candidate directly or indirectly. This prohibition includes public statements or written comments made on behalf of the organisation in support of or against any candidate.
Non-profit organisations can also engage in non-partisan election-related activities, such as voter registration, get-out-the-vote efforts, and voter education. These activities are permitted as long as they are conducted impartially and do not favour or oppose any specific candidate or political party. It is important for non-profits to maintain their objectivity and avoid any perception of partisanship to protect their tax-exempt status and maintain the trust of their stakeholders.
While the IRS has provided guidelines and rulings on what non-profit organisations can and cannot do during election years, it is always advisable for organisations to consult legal counsel to ensure they are operating within the legal boundaries. Non-profit organisations play a crucial role in advocating for various causes and engaging in the democratic process, and by following these guidelines, they can ensure their activities remain non-partisan and compliant with the law.
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Frequently asked questions
No, nonprofits are prohibited from campaigning for or against political candidates. Nonprofits are also not allowed to make campaign contributions. However, they can engage in nonpartisan election-related activities like voter registration, get-out-the-vote efforts, and voter education.
Nonprofits that violate the prohibition on political campaigning risk losing their tax-exempt status and may have to pay excise taxes. They also risk losing the trust of their donors, volunteers, and the public.
Yes, board directors, members, staff, and volunteers can express their personal political views and support candidates in their private capacities. However, they must be careful not to imply that their views are shared by the organization. Nonprofits should remind their staff and volunteers not to use organizational resources for political campaigns.
