Nonprofit Political Campaign Spending: How Much Is Too Much?

Nonprofits must walk a fine line when it comes to spending on political campaigns. While they are prohibited from donating to political candidates or parties, they can spend unlimited amounts on political advertising and activities, as long as they do not explicitly support or oppose a candidate. This means that nonprofits can engage in non-partisan activities such as voter registration, get-out-the-vote drives, and voter education, but they must be careful not to endorse or oppose any candidate directly. Spending more than 20% of their budget on lobbying or political activities can also put their tax-exempt status at risk.

How much can a nonprofit spend on a political campaign?

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Nonprofits can spend an unlimited amount on political advertising, as long as the ads don't explicitly tell people to vote for or against a candidate

Nonprofits must tread carefully when it comes to political campaigns and advertising. While they can spend an unlimited amount on political advertising, this comes with several important caveats. Firstly, the ads must not explicitly tell people to vote for or against a candidate. This is a key condition for nonprofits to remain compliant with the Federal Election Commission (FEC)'s definition of political advertising. The FEC defines political advertising as any communication that identifies a candidate for federal office and urges voters to take action, such as voting for or against that person.

Nonprofits must also be mindful of the timing of their ads. The FEC has a rule that prohibits mentioning a candidate within 30 days of a primary election or 60 days of a general election if the ad can reasonably be interpreted as an endorsement or opposition. Therefore, nonprofits must be cautious about mentioning candidates by name, even if the ad does not explicitly tell people to vote for or against them.

Additionally, nonprofits should be aware of the distinction between political advertising and lobbying. Lobbying is considered an attempt to influence specific legislation through direct contact with legislators or their staff, while political activity seeks to influence election outcomes through campaign contributions, voter education, or get-out-the-vote drives. Nonprofits can engage in lobbying, but it must be limited to an "insubstantial" amount, as defined by the IRS. This term is somewhat vague, but the IRS considers factors such as time and expenditures devoted to the activity when determining whether lobbying activity is substantial.

It is also important to note that nonprofits are prohibited from making monetary contributions to political campaign funds. While they can engage in non-partisan activities such as voter registration and education, they must not endorse, oppose, or rate political candidates. This restriction includes the organization's leadership, who can express personal support for a candidate but must not use the nonprofit to communicate their endorsement.

Nonprofits can spend insubstantial amounts on lobbying

Nonprofits are permitted to engage in advocacy, and lobbying is a small subsection of this. Lobbying is defined as communicating with decision-makers about existing legislation and urging a vote for or against. It is not the same as political campaigning, which is prohibited for 501(c)(3) nonprofits. Nonprofits can, however, engage in nonpartisan voter registration and get-out-the-vote drives, as well as voter education guides, as long as they are conducted impartially.

Nonprofits can also invite political candidates to speak at events, but they must provide equal opportunities to all candidates seeking the same office and give no indication of support or opposition to any candidate. They must also avoid any campaign activity, including fundraising. Nonprofits can take a political position on controversial issues that divide candidates, but they must not indicate that one candidate is favored or opposed and must avoid engaging in substantial legislative activities.

The Johnson Amendment, passed by Congress in 1954, prohibits tax-exempt organizations from campaigning for or against political candidates. This is because nonprofit entities are subsidized by the government in the form of tax exemptions, so political campaigning by these groups would be akin to the federal government subsidizing political ideologies.

Nonprofits can invite candidates to speak in a personal capacity, not as a candidate

Nonprofits must tread carefully when it comes to political activity, as they are subject to strict regulations. The Johnson Amendment, passed in 1954, prohibits tax-exempt organizations from directly or indirectly intervening in any political campaign or supporting/opposing candidates for public office.

However, nonprofits can still engage in some political activities. They can invite candidates to speak at events, but they must follow certain rules to avoid prohibited political activity:

• Provide equal opportunities to all candidates seeking the same office, inviting all candidates, and giving them relatively equal time and opportunity to participate.
• Avoid any indication of support or opposition to a candidate and maintain a non-partisan setting.
• Prohibit fundraising efforts and avoid any campaign activity.
• Focus on the non-political capacity in which the individual is appearing.
• Avoid referencing the candidate's political campaign or the election itself.

Nonprofits can also spend money on political advertising, as long as the ads do not explicitly tell people to vote for or against a specific candidate. These ads often focus on get-out-the-vote messaging and activities in non-partisan ways. Nonprofits can also engage in insubstantial lobbying activities, which means they can spend a relatively small amount of their time and resources on these activities without it being considered "substantial" by the IRS.

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Nonprofits can take a political position on controversial issues that divide candidates, but must not indicate that one candidate is favoured or opposed

Nonprofits can take a political stance on controversial issues that divide candidates, but they must do so without indicating that they favour or oppose any particular candidate. This is a tricky area to navigate, as the rules surrounding political activity are not always clear, and the consequences of getting it wrong can be severe.

In 1954, the US Congress passed the Johnson Amendment, prohibiting tax-exempt organisations from campaigning for or against political candidates. This means that 501(c)(3) charitable nonprofits, foundations, and religious organisations cannot engage in "political campaign activity". They are, however, permitted to engage in advocacy and lobbying, as long as it is done in a limited capacity and does not constitute a “substantial” amount of the organisation's work. The IRS considers a variety of factors when determining whether lobbying activity is substantial, including the time and money devoted to the activity.

Nonprofits can invite political candidates to speak at their events, but they must provide an equal opportunity to all candidates seeking the same office and give no indication of support or opposition to any particular candidate. They must also avoid any campaign activity, including fundraising. Nonprofits can also conduct non-partisan voter registration and get-out-the-vote drives, as well as voter education programs and candidate debates. These activities must be conducted without showing bias for or against any candidate.

While nonprofits can spend unlimited amounts on political advertising, they must be careful not to explicitly tell people to vote for or against a particular candidate. This includes not mentioning candidates by name in messaging and being mindful of the FEC's rule prohibiting ads from mentioning a candidate within 30 days of a primary election or 60 days of a general election.

Nonprofits can conduct a voter registration drive or get-out-the-vote effort in a non-partisan manner

Nonprofits can engage in advocacy and legislative activities, but they must be careful not to cross the line into political campaigning, which is prohibited for 501(c)(3) charitable organizations. The Johnson Amendment, passed in 1954, prohibits tax-exempt organizations from campaigning for or against political candidates. This is because nonprofit entities are subsidized by the government through tax exemptions, so allowing them to engage in political campaigning would be akin to the federal government subsidizing political ideologies.

With that in mind, nonprofits can conduct voter registration drives and get-out-the-vote efforts, as long as they are carried out in a non-partisan manner. This means that nonprofits can encourage people to vote without explicitly telling them to vote for or against a particular candidate. Nonprofits can also engage in lobbying, which is defined as trying to influence specific legislation through direct contact with legislators or their staff. However, the IRS code states that lobbying activities must not constitute a "substantial" amount of the organization's work. The term "substantial" is not clearly defined, but the IRS considers factors such as the time and resources devoted to lobbying activities when determining whether an organization has crossed the line.

Nonprofits can also invite political candidates to speak at their events, but they must provide an equal opportunity to all candidates seeking the same office and give no indication of support or opposition to any particular candidate. Nonprofits should also avoid any fundraising efforts at these events. By following these guidelines, nonprofits can engage in voter registration and get-out-the-vote efforts while maintaining their non-partisan status and avoiding any risk to their tax-exempt classification.

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