As we enter the political season, many nonprofits have asked which lobbying activities are and are not permissible. There is a question on Form 990 that asks, "Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office?" Organizations exempt under Section 501(c)(3) are prohibited from engaging in political activities. Doing so could put a nonprofit's tax-exempt status at risk. Answering this question with a yes would be a red flag for the IRS.
Guidance on What Nonprofits Can and Cannot Do:
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 violates the prohibition against political campaign activity. This may result in denial or revocation of tax-exempt status and subject the organization to excise taxes.
Activities that are done in a non-partisan manner do not constitute prohibited political campaign activity. However, any activity with evidence of bias that would favor one candidate over another, oppose a candidate in some manner or have the effect of favoring a candidate or group of candidates will constitute prohibited participation or intervention.
A Section 501(c)(3) can advocate for or against ballot initiatives, but it must be an insubstantial activity. Also, 501(c)(3) organizations may take positions on public policy issues, including issues that divide candidates in an election for public office, as long as the message does not in any way favor or oppose a candidate. Be aware that the message does not need to identify the candidate by name to be prohibited political campaign activity.
Summary of what 501(c)(3)s are not allowed to do:
- Make political contributions
- Endorse a candidate
- Speak in favor of or against a candidate for political office
- Use the (c)(3)'s property (phones, faxes, office supplies, etc.) in support of or against a campaign
- Lease space to campaigns
- Provide volunteers to work on a campaign
- Use the (c)(3)'s mailing lists, e-mail lists, or other lists of members or activists for a campaign
- Write letters to the editor or other public communications in support of or against a candidate during an election period
A 501(c)(3) can do the following to inform voters of the issues:
- Voter education (candidate forums, candidate questionnaires, and voting record reports)
- Get-out-the-vote activities (e.g., provide transportation to the polls on election day)
- Voter registration
These activities must be done without any stated or implied endorsement of a particular candidate or particular party.
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