Pending Election Is a Good Time to Review IRS Guidelines
With the 2012 campaign season getting into gear, nonprofits may find it useful to familiarize themselves with IRS guidelines on the types of political activities they may engage in without endangering their nonprofit status.

Here’s what the IRS advises:

All 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 campaigns, including campaigns at the federal, state, and local level.

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

Distributing statements prepared by others that favor or oppose any candidate for public office will also violate the prohibition. Allowing a candidate to use an organization’s assets or facilities will also violate the prohibition if other candidates are not given an equivalent opportunity.

Although 501(c)(3) organizations may engage in some activities to promote voter registration, encourage voter participation, and provide voter education, they will violate the prohibition on political campaign intervention if they engage in an activity that favors or opposes any candidate for public office.

Voter Education, Voter Registration and Get Out the Vote Drives
Section 501(c)(3) organizations are permitted to conduct certain voter education activities, including the presentation of public forums and the publication of voter education guides, if they are carried out in a non-partisan manner.

In addition, 501(c)(3) organizations may encourage people to participate in the electoral process through voter registration and get-out-the-vote drives, conducted in a non-partisan manner. On the other hand, voter education or registration activities conducted in a biased manner that favors, or opposes, one or more candidates is prohibited.

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. Nor are leaders 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 potential attribution of their comments outside of organization functions and publications, 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. Political candidates may be invited in their capacity as candidates, or in their individual capacity not as a candidate. Candidates may also appear without an invitation at organization events that are open to the public.

A candidate may seek to reassure the organization that it is permissible for the organization to do certain things in connection with the candidate’s appearance. An organization in this position should keep in mind that the candidate may not be familiar with the organization’s tax-exempt status and that the candidate may be focused on compliance with the election laws that apply to the candidate’s campaign rather than the federal tax law that applies to the organization. The organization will be in the best position to ensure compliance with the prohibition on political campaign intervention if it makes its own independent conclusion about its compliance with federal tax law.

When a candidate is invited to speak at an organization event as a political candidate, the organization must take steps to ensure that:
  • It provides an equal opportunity to other political candidates seeking the same office.
  • It does not indicate any support for or opposition to the candidate. This should be stated explicitly when the candidate is introduced and in communications concerning the candidate’s attendance.
  • No political fundraising occurs.
In determining whether candidates are given an equal opportunity to participate, an organization should consider the nature of the event to which each candidate is invited, in addition to the manner of presentation. For example, an organization that invites one candidate to speak at its well attended annual banquet, but invites the opposing candidate to speak at a sparsely attended general meeting, will likely have violated the political campaign prohibition, even if the manner of presentation for both speakers is otherwise neutral.

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May 2012