Passionate About Politics? Don’t Allow it to Affect Your Organization’s Tax Exempt Status under 501(c)(3)

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By Kim Hunwardsen 

The political season is in its final months, and we all have our opinions. Important issues like the fate of the Affordable Care Act and the impact of tax reform on charitable contributions have us talking.

But organizations exempt under 501(c)(3) and their leaders need to be careful about what they say — and do — politically. These types of nonprofit organizations are prohibited from engaging a substantial part of their activities in lobbying and from engaging in any direct intervention in elections for public office. Failure to follow these rules could result in loss of tax exemption. Certain other types of nonprofit organizations like those exempt as trade associations under 501(c)(6) are not subject to these same types of limitations.  For more information read the full article here.

 

Election Time and Political Lobbying – What’s Allowed and What Isn’t?

It is election season and many nonprofits are contemplating their options in supporting issues or candidates. What can you do, and what can’t you do?

Organizations exempt under 501(c) (3) are prohibited from engaging in political activities, but this doesn’t mean your organization cannot participate in the process. What’s allowed and what isn’t?

Basically, activities done in a non-partisan manner do not constitute prohibited political activity. Organizations can also advocate for or against ballot initiatives, but this must be an insubstantial activity.

A 501(c) (3) is not allowed to do the following:

  • Make political contributions
  • Endorse a candidate
  • Speak in favor or against a candidate for political office
  • Use the organization’s property (phones, faxes, supplies, etc.) in support of or against a campaign
  • Lease space to campaigns
  • Provide volunteers to work on a campaign
  • Use the organization’s mailing list or lists of members for a campaign
  • Write letters to the editor or other public communications in support of or against a candidate during an election period

However, a 501(c) (3) can do the following to inform voters of the issues:

  • Voter education (candidate forums, candidate questionnaires, voting record reports)
  • Get-out-the-vote activities
  • Voter registration

These activities must be done without any stated or implied endorsement of a particular candidate or party.

This is a broad overview of the allowed and unallowed activities. If you are uncertain regarding a particular activity, ask for professional advice.