Most charitable organizations generally understand that they’re barred from participating or intervening in political campaigns. Failure to follow IRS rules governing nonprofits and politics may result in an excise tax, or worse, a loss of tax-exempt status. Let’s take a closer look at details that have the potential to trip you up.
IRS rules
501(c)(3) organizations can’t participate or intervene in any political campaign on behalf of, or in opposition to, any candidate for public office. An organization engages in political intervention when it:
1. Makes or solicits contributions to or for candidates or political organizations,
2. Endorses a candidate or rates candidates,
3. Distributes partisan campaign literature or written statements (including online material),
4. Asks its representatives to speak out about a candidate, or
5. Uses its resources to influence an election.
Your nonprofit can, however, conduct nonpartisan activities that educate the public and help them participate in the election process so long as these activities are in line with your exempt purpose. Your organization’s representatives can make partisan comments as individual citizens as long as they make it clear that their comments are personal and don’t represent your nonprofit’s views.
Conduct nonpartisan voter-related activities
Some politics-related activities or expenses may be permissible depending on the facts and circumstances. For example, voter education activities, such as publishing voter education guides, don’t constitute prohibited activity if conducted in a nonpartisan manner. But your organization should avoid mentioning candidates or political parties in communications such as publicity, posters, registration materials and handouts.
In addition, activities intended to encourage participation in the electoral process aren’t considered prohibited activity if conducted in a nonpartisan manner. Your nonprofit should do no more than urge people to register and vote or describe the hours and places of registration and voting. You must offer any related services — such as voter registration forms or transportation to the polls — to all, regardless of political persuasion.
Finally, you may publish voting records to report the activity of a legislative body but not to comment on an election campaign. If voting records identify any incumbent as a candidate or compare an incumbent’s positions with those of other candidates, they may represent political campaign intervention.
Advocate Issues Narrowly
You can advocate issues during a campaign if your activities don’t constitute campaign intervention. For example, you risk intervening in a political campaign if your message invites the recipient to compare a candidate’s position on an issue with your organization’s views.
The message doesn’t need to directly urge a vote for or against a candidate or even mention the candidate by name to violate the ban. Simply using labels such as “conservative” or “liberal” may be enough to violate political activity rules.
Treat Candidates Fairly
If you invite someone to speak in the role of a candidate, you must give all qualified candidates an equal opportunity to speak. For example, if one candidate speaks at your annual meeting and another at a sparsely attended committee meeting, you haven’t provided equal opportunities. In addition, you must make clear that you neither support nor oppose an invitee’s candidacy.
A candidate also can appear in another role (for example, discussing a topic other than an election). You must clearly indicate the capacity in which the candidate will appear in any announcements, maintain a nonpartisan atmosphere at the event and ensure that no campaign activity (including fundraising) occurs. And your representatives can’t mention the campaign or candidacy.
One way around the risks of candidate appearances is to hold a forum with all of the candidates invited to appear together to answer questions. You must treat every candidate fairly and impartially. Have an independent nonpartisan panel prepare and present the questions. The moderator and the forum’s sponsors also should refrain from commenting on questions, answers and candidates.
Avoid Prohibited Activities
If your organization is found to have intervened in political campaigns, the IRS can impose excise taxes on the amount of money spent on the prohibited activity or even revoke tax-exempt status. Make sure any political activity is clearly nonpartisan.
