Social media is a requirement for the nonprofit sector – it allows organizations to reach a large audience with very little cost. However, most organizations are not aware of the potential tax implications. There is little guidance regarding online communications, but the IRS considers online communications to be similar to other forms of communication; thus, a website is considered a form of communication.
Facebook and Twitter have become the norm when it comes to communicating. Both forms allow for links to other websites that may or may not be related to the organization’s tax-exempt purpose. Organizations should be aware and continually monitoring content both on their own website as well as websites to which that they provide links. Organizations must consider whether the link is advertising – does it endorse products or provide qualitative information? Or is it only an acknowledgment? This area continues to change and requires organizations to be aware of potential risks.