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501(c)(3) Organizations
And Political Activities

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Welcome to Frequently Asked Questions about electioneering.

What is electioneering?

Answer:

Electioneering is the participation or intervention in any political campaign on behalf of (or in opposition to) any candidate for public office.

See:https://www.irs.gov/charities-non-profits/charitable-organizations/ the-restriction-of-political-campaign-intervention-by-section-501c3-tax-exempt-organizations

Can an organization engage in any electioneering?

Answer:

Organizations are permitted to engage in electioneering activities so long as the activities are non-partisan.

See:https://www.irs.gov/charities-non-profits/charitable- organizations/the-restriction-of-political-campaign-intervention-by-section-501c3-tax-exempt-organizations

Can 501(c)(3) nonprofits spend any money on a candidate’s campaign if the candidate favors an issue that directly impacts my organization?

Answer:

In short, no. 501(c)(3) nonprofit organizations may not spend any of their money, which is received from tax deductible donations, to either support or oppose an individual candidate’s campaign for election or they may lose their tax-exempt status. Instead, they must focus on advocacy and voter education as defined in a later portion within this project. For additional information, consult with your attorney to determine what is the best fit for your organization.

See:https://www.irs.gov/pub/irs-pdf/p4221pc.pdf

Are these laws based on the state you live in?

Answer:

No; while there are state specific nonprofit laws, these electioneering-based laws are derived from federal tax law. While there may be state specific laws that cover electioneering as well, this material and guidance covers federal law only. You should always review your state specific laws to determine if electioneering activities differ from that of the federal guidelines. Consult with your attorney for additional questions.

See:https://www.govinfo.gov/content/pkg/CFR-2012-title26-vol7/ pdf/CFR-2012-title26-vol7-sec1-501c3-1.pdf

What is the difference between issue advocacy and campaign intervention?

Answer:

Issue advocacy is separate from campaign intervention in that issue advocacy pertains to supporting or opposing legislative activities, which charitable nonprofits ARE permitted to engage in. §501(c)(3) organizations may take positions on public policy issues including issues that divide candidates in an election for public office but MUST AVOID any issue advocacy that functions as a political campaign intervention by appearing to intervene on behalf of or in opposition to a particular candidate.

See:https://www.irs.gov/charitable-organizations/the-restriction-of-political- campaign-intervention-by-section-501c3-tax-exempt-organizations

What is a campaign intervention?

Answer:

A campaign intervention is a prohibition against political campaign activity (which is defined as “supporting or opposing a candidate for public office.”)

See:https://www.councilofnonprofits.org/tools-resources/political- campaign-activities-risks-tax-exempt-status

What are the factors the IRS assesses to determine if a statement is a political campaign intervention?

Answer:

There are seven factors to consider, but the IRS will look to the overall facts and circumstances of the statement in determining whether it constitutes a campaign intervention. These factors include:

1. Whether the statement identifies one or more candidates for a given public office;
2. Whether the statement expresses approval or disapproval for one or more candidates’ positions and/or actions;
3. Whether the statement is delivered close in time to the election;
4. Whether the statement makes reference to voting or an election;
5. Whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office;
6. Whether the communication is part of an ongoing series of communications by the organization on the same issue that is made independent of the timing of any election; and
7. Whether the timing of the communication and the identification of the candidate are related to a non-electoral event such as a scheduled vote on specific legislation by an officeholder who also happens to be a candidate.

See:https://la84.org/wp-content/uploads/2016/09/p4221pc.pdf

When is voter education permissible?

Answer:

Voter education or registration drives that are conducted in a non-partisan (non-biased) manner that does not favor or oppose one or more candidates, are permissible.

See:https://www.irs.gov/pub/irs-news/fs-06-17.pdf

When is it permissible for a non-profit to conduct a voter registration drive?

Answer:

Non-profits may conduct voter registration drives, so long as the drives and events are non-partisan.

See:https://www.irs.gov/charitable-organizations/the-restriction-of-political- campaign-intervention-by-section-501c3-tax-exempt-organizations

Can a 501(c)(3) host a candidate forum?

Answer:

A forum for candidates is permissible where the questioning and format of the event does not demonstrate partisanship nor does it favor or oppose a specific candidate.

See:https://www.irs.gov/pub/irs-drop/rr-07-41.pdf

What is a voter guide and does it constitute voter education?

Answer:

Voter guides are documents, generally presented as a chart in a pamphlet or in other short documents (such as mailers) and are intended to assist voters in comparing the candidates’ positions on the issues. These guides generally are regarded as a voter education activity where the guides do not focus on a single issue or a narrow range of issues, where the questions are not structured to reflect partisan preferences, and where all candidates are represented equally.

See:https://www.irs.gov/pub/irs-news/fs-06-17.pdf

Can a leader of a 501(c)(3) engage in political activities during their own free time?

Answer:

Leaders of organizations are permitted to speak on their own behalf as individuals and are not prohibited from speaking about important issues of public policy. Leaders, however, are not permitted to make partisan comments while acting in their official capacity, or through official publications offered by the organization, or at official functions hosted or sponsored by the organization. In engaging in partisan activity, in order to preserve the tax-exempt status of the organization, the leader of an organization must clearly denote that their comments are being made in a personal capacity and are not affiliated with the view or opinion of their affiliated organization. For more information, consult with your organization’s attorney.

See:https://www.irs.gov/pub/irs-news/fs-06-17.pdf

What is the biggest tax penalty if an organization’s manager engages in legal political expenditures?

Answer:

If initial taxes based on political expenditures are imposed on managers, then the amount of tax (equal to 10% of the total expenditure) must not exceed $5,000. If additional taxes based on political expenditures are imposed on managers, then the amount of tax (equal to 50% of the total expenditure) must not exceed $10,000. This penalty will be enforced in addition to the revocation of the organization’s nonprofit status. Again, this penalty is not just a tax, it is a penalty that is enforced with revocation. For more information, consult with your organization’s attorney.

See: https://www.govinfo.gov/app/details/USCODE-1998-title26/USCODE-1998-title26-chap42-subchapC-sec4955

Can a §501(c)(3) organization's website include links to campaigns?

Answer:

Yes, if all campaigns are equally represented in an unbiased manner. While there may be state specific laws that cover web-based activities as well, these guidelines are derived from federal tax law only. You should always review your state specific laws to determine if web-based activities differ from that of the federal guidelines. Consult with your attorney for additional questions.

See: https://www.irs.gov/charities-non-profits/charitable-organizations/frequently-asked-questions-about-the-ban-on-political-campaign-intervention-by-501c3-organizations-website-postings-and-links

Can 3rd party advertising services generate advertisements at their discretion on a 501(c)(3) nonprofit’s website?

Answer:

Yes, but such content must be meticulously monitored, in order to filter out any impermissible content, such as content that appears to indicate support for a particular candidate in a partisan election. While there may be state specific laws that cover web-based activities as well, these guidelines are derived from federal tax law only. You should always review your state specific laws to determine if web-based activities differ from that of the federal guidelines. Consult with your attorney for additional questions.

See: https://www.irs.gov/charities-non-profits/charitable-organizations/frequently-asked-questions-about-the-ban-on-political-campaign-intervention-by-501c3-organizations-website-postings-and-links

If a linked website on the organization's site provides links to impermissible content, will the original host site be penalized for such impermissible content?

Answer:

No, if a link isn’t directly posted on the host site, it is not direct enough to the nonprofit to be considered a violation of IRC §501(c)(3).

See:https://www.stayexempt.irs.gov/se/files/downloads/PoliticalCampaigns_Print.pdf(last visited Nov. 10, 2018).

Can a §501(c)(3) organization include links on its website to information on pending legislation?

Answer:

Yes, but only if it is informational and unbiased content will it be considered a permissible activity.

See:https://www.stayexempt.irs.gov/se/files/downloads/PoliticalCampaigns_Print.pdf(last visited Nov. 10, 2018).

Can a §501(c)(3) organization join a coalition?

Answer:

§ 501(c)(3) organizations “may join a coalition composed of § 501(c)(3)s and § 501(c)(4)s for any purpose consistent with its exempt status, such as conducting research or preparing and publicizing materials on a current issue…. [or to] lobby on issues. A 501(c)(3) tax-exempt organization may not engage in activities that would otherwise be impermissible indirectly through involvement in a coalition. Permissible activities of a coalition include conducting voter registration drives, advancing voter education initiatives and get-out-the-vote activities, if, and only if, these activities are conducted in a non-partisan manner. While there may be state specific laws that cover coalition and partnership activities as well, these guidelines are derived from federal tax law only. You should always review your state specific laws to determine if coalition and partnership activities differ from that of the federal guidelines. Consult with your attorney for additional questions.

See: https://bolderadvocacy.org/resource/nonprofits-working-together/

What is a candidate appearance and is it permissible for a candidate to appear at an organization’s speaking engagement?

Answer:

A § 501(c)(3) organization allow a political candidate to appear during an election season to promote voter education, public participation in the political process, or to generate support for the organization’s particular initiative. Political candidates may be invited to appear at an organization-sponsored event in either their official capacity, as a candidate for public office, or in their unofficial capacity as a public figure. A candidate’s appearance at an organization-sponsored event does not itself constitute a political campaign intervention, unless the candidate is publicly recognized by the organization, the candidate is invited to speak, or otherwise considered to be engaging in a political campaign intervention, under the factors articulated in the Revenue Ruling 2007-41 by the IRS. While there may be state specific laws that cover candidate apearances as well, these guidelines are derived from federal tax law only. You should always review your state specific laws to determine if web-based activities differ from that of the federal guidelines. Consult with your attorney for additional questions.

See: https://www.irs.gov/pub/irs-pdf/p4221pc.pdf

What is the difference between the unofficial or official capacity of a political candidate?

Answer:

A candidate appearing at an organization’s event in their unofficial capacity appears or speaks in their individual capacity as a public figure. A political candidate may appear in their unofficial capacity as a public figure “that currently holds, or formerly held, public office; a public figure considered to be an expert in a non-political field; or one who is a celebrity, or has led a distinguished military, legal, or public service career.” Candidates may also choose to attend events open to the general public, including “lectures, concerts, or a worship service.” A candidate’s appearance at an organization’s event does not constitute a political campaign intervention, unless the candidate is publicly recognized by the organization; the candidate is invited to speak, or otherwise considered to be political campaign intervention under the following factors

1. Whether the individual is chosen to speak solely for reasons other than candidacy for public office;
2. Whether the individual speaks only in non-candidate capacity;
3. Whether either the individuals or any representative of the organization make any mention of his or her candidacy or the election;
4. Whether the organization maintains a nonpartisan atmosphere on the premises or at the event where the candidate is present; and.
5. Whether the organization clearly indicates the capacity in which the candidate is appearing and should not mention the individual’s political candidacy or the upcoming election in the communications announcing the candidate’s attendance at the event.

See: https://www.irs.gov/pub/irs-pdf/p4221pc.pdf

Are 501(c)(3) organizations limited in the business activities it may conduct?

Answer:

Yes; under the Internal Revenue Code, section 501(c)(3) organizations are generally limited in the types of business activity they are permitted to conduct. The violation of this regulation may result in the revocation of an organization’s tax-exempt status. During the course of an organization’s business activity, a question may arise of whether such activity constitutes participation or intervention in a political campaign. The factors, from Revenue Ruling 2007-41, in determining whether an organization’s business activity constitutes political campaign intervention, are as follows:

1. Whether the good, service or facility is available to candidates in the same election on an equal basis;
2. Whether the good, service, or facilityis available only to candidates and not to the general public;
3.Whether the fees charged to candidates are at the organization’s customary and usual rates; and
4.Whether the activity is an ongoing activity of the organization or whether it is conducted only for a particular candidate.

While there may be state specific laws that cover business activities as well, these guidelines are derived from federal tax law only. You should always review your state specific laws to determine if business activities differ from that of the federal guidelines. Consult with your attorney for additional questions.

See: https://www.irs.gov/pub/irs-pdf/p4221pc.pdf

What are some examples of permissible business activities that might relate to political campaigns?

Answer:

1. Selling or renting mailing lists made available to all interested candidates seeking the same office.
2. Leasing of office space, where customary and usual fees are set for any organization or individual interested in renting the space.
3. Accepting paid political advertising, where rates charged are comparable to those charged for non-campaign advertisements.

See:https://www.irs.gov/pub/irs-pdf/p4221pc.pdf