With the 2020 presidential election less than five months away and many local and state elections happening now, it’s a good time to review the rules on the prohibition against political activity for tax-exempt organizations. In this post, we’ll answer some frequently asked questions related to political activity by 501(c)(3) organizations, including public charities, private foundations, churches, and schools.

Are nonprofits allowed to endorse a candidate?

No.  Tax-exempt organizations may not directly or indirectly participate or intervene in any political campaign on behalf of or in opposition to any candidate for public office. This includes any verbal or written statement made on behalf of the organization that favors or opposes any candidate for public office.

What about donating to a political campaign?

Contributions to political campaigns are also prohibited campaign intervention, so tax-exempt organizations may not make monetary contributions to political campaign funds.

Can individual nonprofit leaders publicly endorse a candidate?

Yes, so long as nonprofit leaders do not use the nonprofit to communicate their endorsement and clearly indicate their comments are not intended to represent the views of the organization. Thus, a nonprofit leader may not make partisan comments at organization functions or in organization publications. Leaders should steer clear from making endorsements via the organization’s website, social media accounts, email list, newsletter, bulletin, podcast, pulpit, radio and TV programs, and other organization forums.

Can a nonprofit conduct a voter registration drive or get-out-the-vote effort?

Yes, voter registration and education efforts conducted in a non-partisan matter are allowed. Such activities may not be conducted in a way that favors one candidate over another, opposes a candidate in some manner, or has the effect of favoring a candidate or group of candidates.

Can a nonprofit invite a political candidate to speak at its events?

Yes, but to avoid prohibited political activity, nonprofits should 1) provide equal opportunity to all political candidates seeking the same office, 2) give no indication of support or opposition of a candidate, and 3) prohibit fundraising efforts. Not all candidates must attend, but all candidates should be invited and given relatively equal time and opportunity to participate. If one candidate is invited to speak at a large group event, and another is invited to speak at a smaller, less well-attended event, this is likely not an equal opportunity to participate.

When holding a candidate forum involving several candidates for public office, nonprofits should be careful not to show bias for or against any candidate in the questions, time given, or topics addressed to any candidate.

Nonprofits may also invite candidates to speak in a personal capacity, rather than in their capacity as a candidate, if chosen to speak solely for reasons other than their candidacy for public office. The nonprofit and the candidate should avoid referencing the candidacy or election and instead focus on the non-political capacity in which the individual is appearing. Additionally, the nonprofit should maintain a non-partisan setting on the premises where the event is held and avoid any campaign activity, including fundraising.

Can a nonprofit take a political position on controversial issues that divide candidates?

Yes. However, nonprofits may not do so in a way that indicates that one candidate is favored or opposed and must avoid engaging in substantial legislative activities by attempting to influence legislation, commonly known as lobbying. Nonprofits should be careful not to contact or urge their members or employees to contact any federal, state, or local legislative body to propose, support, or oppose legislation. Nonprofits that do engage in legislative activities must report them on Form 990, Schedule C.

What if a nonprofit violates the political campaign activity or legislative activity rules?

The IRS can impose substantial excise taxes on nonprofits that engage in prohibited activity and even revoke an organization’s tax-exempt status.

The rules surrounding political activity are not always clear. If you have a question about a particular activity or situation, please contact us.