“Charities are prohibited from engaging in all political activities. It is important to understand what constitutes this banned activity and the consequences of stepping over the line.”
Given that tomorrow is Election Day, we thought this article from Tricia Katebini and David Trimner at Clifton Larson Allen offered a timely and valuable reminder for everyone working in the non-profit sector.
Many 501(c)3 organizations are involved in permissible advocacy efforts or in educating their community about voting rights, etc., but there is no grey area when it comes to engaging in political campaign activity that indicates, in any way, a preference for a particular candidate or candidate’s positions.
In addition to the insights and information offered in the article, this is the exact language about campaign activity from the IRS:
The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt 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.
Obviously, we all want to serve our communities and need to be able to advance our organization’s mission to accomplish that goal. That said, it is imperative that we are fully aware of any and all restrictions that could put our efforts and our exempt status in jeopardy.
- Issue Advocacy section in the IRS Election Year Activities fact sheet for 501(c)(3) Organizations
- The IRS’s position on charities and Lobbying
by: David Gee, Associate Vice President, HUB Philanthropic Solutions