As the presidential election approaches, CBM would like to take this opportunity to go over the basic rules that govern 501(c)(3) organizations (“charitable organizations”) pertaining to political activities.
To put it simply, the Internal Revenue Code absolutely prohibits all 501(c)(3) organizations 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. Violating this prohibition could lead to the loss of tax-exempt status and the imposition of certain excise taxes.
Contributions from a charitable organization to political campaign funds violate the prohibition on political campaign activities. Any public endorsements, whether spoken or written, made by a charitable organization in support of or against any candidate for public office would violate the prohibition on political campaign activities.
The prohibition on political campaign activities does not prevent charitable organization leaders from voicing their “personal” opinions on political issues when they are speaking as individuals (and not as a leader of the charitable organization). However, charitable organizations leaders must refrain from making partisan remarks in their charitable organization’s publications or during their charitable organization’s official functions.
For example, if an executive director of a charitable organization attends an event for a particular candidate, they can express “personal” support of the political candidate, if they don’t state or otherwise imply that they are speaking on behalf of their charitable organization. However, if the executive director makes the same statement at their charitable organization’s official functions or in their charitable organization’s official publication, this statement would be considered prohibited political campaign activity.
Charitable organizations can conduct voter registration and get out the vote drives only if these activities are conducted in a neutral, nonpartisan manner. For example, these activities can’t be conducted in a manner that favors one candidate over another.
The rules that govern 501(c)(3) organizations pertaining to political activities can get complicated. The above alert illustrates the basic prohibition. Here are some frequently asked questions about the ban on political campaign intervention by a 501(c)(3) organization.
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Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.
