Electioneering & 501(c)(3) Organizations

With election season right around the corner, we thought it’d be helpful to outline the law surrounding electioneering as it applies to 501(c)(3) nonprofits and foundations.

The General Rule
The general rule is that a 501(c)(3) nonprofit or foundation cannot “participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” Surprisingly, this rule applies even if the election of a particular candidate would further the charity’s exempt purpose (e.g. supporting a candidate that would help your organization’s cause).

What Qualifies as Electioneering?
There are three trigger words to look for in determining whether an activity will be considered electioneering: candidates, voting, and election. If a proposed activity involves any of those three things, it should raise red flags within your organization that electioneering analysis should be done. To do this analysis, you can ask yourself four key questions:

(1) Is the activity being done close to an election?
(2) Is the activity new to the organization or is a pre-existing activity that the organization engages in even when it is not election season?
(3) Does the activity or work product benefit one of the candidates at the expense of another candidate?
(4) Does the activity involve an issue that has been identified with one candidate or party during the campaign?

If you answer yes to any of these questions, then your organization should consult a nonprofit attorney to help you navigate possible solutions or mitigate the risks.

What Are the Consequences of Electioneering?
The consequences of electioneering are severe. A violating organization that engages in any level of campaign activity may lose its exemption status and eligibility to receive tax-deductible contributions. If the violation is considered flagrant, then the IRS may go so far as to immediately assess all taxes due and seek injunctive relief to freeze all of the organization’s assets.

The Exception to the Rule
Even though electioneering is strictly prohibited under the IRS regulations, 501(c)(3) organizations may still do things to support the overall political process and increase voter education. Standard and accepted methods of this include making voter guides and candidate questionnaires. A voter guide is a resource that provides all of the candidates’ position on issues while a candidate questionnaire is a list of questions that organizations pose to the candidates themselves to learn their position on issues.

The laws of electioneering as applied to 501(c)(3) organizations can become complicated fast. If you are unsure about the legality of an activity, it is best to consult a nonprofit attorney proficient in electioneering. Here at Sustainable Law Group, we have over 25 years of experience consulting nonprofits on a variety of issues, including electioneering. To set up your consultation, call (310) 883-7923 or email us at info@sustainable-lawyer.com.

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