The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax Exempt Organizations
Political Campaign Restrictions for 501(c)(3) Organizations
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.
Certain activities or expenditures may not be prohibited depending on the facts and circumstances. For example, certain voter education activities (including presenting public forums and publishing voter education guides) conducted in a non-partisan manner do not constitute prohibited political campaign activity. In addition, other activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives, would not be prohibited political campaign activity if conducted in a non-partisan manner.
On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.
As a key element in its program to secure compliance with the ban on political campaign activity by section 501(c)(3) organizations, the Internal Revenue Service educates organizations about the ban and puts them on notice of the enforcement program. Towards this end, the IRS employs an array of educational tools:
Guidance to exempt organizations on how to apply the ban in various factual situations. (https://www.irs.gov/charities-non-profits/charitable-organizations/published-guidance-on-political-campaign-activity-of-501c3-organizations)
Revenue Ruling 2007-41 (https://www.irs.gov/irb/2007-25_IRB#RR-2007-41) and Fact Sheet 2006-17 (https://www.irs.gov/newsroom/election-year-activities-and-the-prohibition-on-political-campaign-intervention-for-section-501c3-organizations) distill IRS guidance in this area, each providing examples of how it applies.
News releases and other resources for the media discussing the ban. (https://www.irs.gov/charities-non-profits/news-releases-and-fact-sheets-on-political-campaign-activities)
The Tax Guide for Churches and Religious Organizations (Publication 1828) discusses the ban thoroughly. (https://www.irs.gov/pub/irs-pdf/p1828.pdf)
IRS Publication 4221-PC Compliance Guide for 501(c)(3) Public Charities discusses the ban on political activities. (https://www.irs.gov/pub/irs-pdf/p4221pc.pdf)
Frequently asked questions. (https://www.irs.gov/charities-non-profits/charitable-organizations/frequently-asked-questions-about-the-ban-on-political-campaign-intervention-by-501c3-organizations)
Other resources (https://www.irs.gov/charities-non-profits/charitable-organizations/charities-churches-and-educational-organizations-political-campaign-intervention)
If you have questions regarding the prohibition of political activities and your charitable organization, please contact Jonathan Grissom, an attorney dedicated to the representation of California nonprofits.