Making Sure Your Organization Avoids Political Campaign Intervention

During election campaigns, many charities, universities, hospitals, churches, social service providers and other Section 501(c)(3) organizations are uncertain about the extent to which they can discuss issues of importance in the campaigns or interact with candidates for public office. This article is intended to help Section 501(c)(3) organizations understand what they can and cannot do when an election campaign is underway. 

Political Campaign Intervention

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. The prohibition applies to all political campaigns, including campaigns at the federal, state and local levels. Violation of this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.

Political campaign intervention includes any and all activities that favor or oppose one or more candidates for public office. However, the prohibition extends beyond candidate endorsements. Contributions to political campaign funds, public statements of position (verbal or written) made by or on behalf of an organization in favor of or in opposition to a candidate, and distributing statements made by others that favor or oppose any candidate, all violate the prohibition on political campaign activity.

Voter Education, Voter Registration and Get-Out-the-Vote Drives

Section 501(c)(3) organizations are permitted to conduct certain voter education activities if they are carried out in a nonpartisan manner.  Examples include the presentation of public forums and the publication of voter education guides. In addition, Section 501(c)(3) organizations may encourage people to participate in the electoral process through voter registration and get-out-the-vote drives. However, these activities cannot be conducted in a biased manner that favors or opposes one or more candidates.

Individual Activity by Organization Leaders

The political campaign intervention prohibition is not intended to restrict free expression on political matters by leaders of organizations speaking for themselves, as individuals. In addition, these leaders are not prohibited from speaking about important issues of public policy. However, for their organizations to remain tax exempt under Section 501(c)(3), leaders cannot make partisan comments in official organization publications or at official functions of the organization. To avoid violating the prohibition, organization leaders who speak or write in their individual capacity are encouraged to clearly indicate that their comments are personal and not intended to represent the views of the organization.

Candidate Appearances

Depending on the facts and circumstances, an organization may invite political candidates to speak at its events without jeopardizing its tax-exempt status. When a candidate is invited to speak at an organization event, the organization must take steps to verify that:

• It provides an equal opportunity to all other candidates seeking the same office;
• It does not indicate any support for or opposition to the candidate (which should be stated when the candidate is introduced, as well as in communications concerning the candidate’s attendance); and
• No political fundraising occurs.

Issue Advocacy vs. Political Campaign Intervention

Section 501(c)(3) organizations may take positions on public policy issues, including issues that divide candidates in an election for public office.  However, organizations must avoid any issue that functions as political campaign intervention. Even if a statement does not expressly tell an audience to vote for or against a candidate, an organization delivering the statement is at risk of violating the prohibition if there is any message favoring or opposing a candidate. All facts and circumstances need to be considered to determine if the advocacy is political campaign intervention. Key factors in making this determination include:

• Whether the statement identifies one or more candidates;
• Whether the statement expresses approval or disapproval for one or more candidates’ positions and/or actions;
• Whether the statement is delivered close to the time of the election;
• Whether the statement refers to voting or an election; and
• Whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office.

Voter Guides

Voter guides are usually pamphlets or other short documents intended to help voters compare candidates’ positions on a set of issues. Preparing or distributing a voter guide may violate the prohibition if the guide focuses on a single issue or narrow range of issues, or if the questions are structured to reflect bias. The following factors are key considerations in determining whether a voter guide can be distributed to educate voters without violating the prohibition:

• Whether the questions and any other description of the issues are clear and unbiased;
• Whether each candidate is given a reasonable amount of time and opportunity to explain their position and that explanation is included in the voter guide; and
• Whether the number of questions, and the subjects covered, are sufficient to encompass most major issues of interest to the entire electorate.

Business Activity

The question whether an activity constitutes political campaign intervention may also arise in the context of a business activity of the organization, such as the selling or renting of mailing lists, the leasing of office space or the acceptance of paid political advertising. Factors to be considered in determining whether these activities violate the prohibition include:

• Whether the good, service or facility is available to candidates in the same election on an equal basis;
• Whether the fees charged to candidates are at the organization’s customary and usual rates; and
• Whether the activity is an ongoing activity of the organization or whether it is conducted only for a particular candidate.

Websites

Since websites are a form of communication, if a Section 501(c)(3) organization posts something on its website that favors or opposes a candidate for public office, the organization will be treated as if it distributed printed material, oral statements or broadcasts that favored or opposed a candidate.  In addition, when an organization establishes a link to another website, the organization is responsible for the consequences of establishing and maintaining that link, even if the organization does not have control over the content of the linked site. Because the linked content may change over time, an organization may reduce the risk of political campaign intervention by monitoring the linked content and adjusting the links accordingly.

Summary

The consequences of Section 501(c)(3) organizations violating the prohibition against political activity, in combination with the fact-specific nature of the various issues that can arise, require organizations to be aware of and carefully monitoring their activities, especially in an election year.