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By: Denise DeBelle, Law Office of Denise M. DeBelle
Can you correctly answer these three questions about how the IRS views your organization’s – or your client’s – political activity?
1. TRUE/FALSE: While it is not okay for my organization to directly endorse a candidate on their website, it is okay for us to link to a site of an organization that does.
2. TRUE/FALSE: For our upcoming fundraiser, we can invite one political candidate to speak about issues of interest, as long as they do not speak about the upcoming election campaign.
3. TRUE/FALSE: We can legally distribute a voter’s guide intending to educate our members, clients, and the general public on issues relevant to our organization, as long as the Guide makes comparisons between the candidates’ positions and that of the organization.
Surprise! The answer to all three of these is FALSE. We’ll explore legal options to these issues at the end of this post.
At its most basic, the IRS prohibits any partisan political activity by a non-profit organization, its staff, Board or volunteers when acting in the capacity of the organization. Do you or your non-profit clients get political? If so, you should know something about the relevant IRS rules.
A non-profit organization incorporated under Section 501(c) 3 is organized primarily as a “charity.” This designation distinguishes this type of organization from other non-profits, entitling donors to these organizations to receive a tax deduction. Political activity is outside of the charitable function of the organization.
So any level of political activity, whether federal, state or local electioneering, is never OK.
What counts as political activity? Organizations should ask themselves: Do we lobby elected officials? Have we ever invited candidates to a forum around election time? Have we taken folks to Springfield or Washington D.C. to meet with legislators?
If the answer to any of these is yes, then the following rules are the basics you must know in order to avoid risking tax penalty or loss of tax exemption:
1. Do make your views known to legislators and candidates, but
2. Do not show favoritism to any candidate for election, or in any way participate or cooperate with any organization which endorses a candidate for public office.
This blog post addresses #2. In a subsequent post, I will discuss #1.
Let’s go back to the TRUE/FALSE questions from the beginning of the post. What is the problem with these practices? Let us modify the above examples to show what the organization can do differently.
1. When discussing issues of public concern on your website, simply do not make a reference to any particular candidate in an upcoming election.
2. It is perfectly permissible to host election or candidate forums. But the organization must invite all candidates for that particular office, and give each candidate equal access to your audience.
3. Voter Guides can discuss the issues in detail even if an election is looming. The key for your Voter Guide is to be sure not to describe the voting patterns of candidates in a way to suggest endorsement or approval of any particular candidate.
But wait: does this mean a 501c3 cannot take positions on issues which may imply criticism of an officeholder, during the height of an election campaign? No! A 501c3 organization, including religious organizations, may lobby to influence legislation and that lobbying need not stop merely because an election is going on.
The next article will explore the rules for lobbying, and how non-profits can “elect” to permit more lobbying.
This is general information and is not intended as legal advice. For more detailed guidance as to your organizations’ practices, an attorney should be consulted.
Law Office of Denise M. DeBelle
The Association of Consultants to Nonprofits | 400 E. Randolph St., #3115 | Chicago, IL 60601