Caution to Nonprofits Engaging in Political Activity

As we enter the home stretch in this election cycle, both excitement and concern are mounting for many nonprofits. The temptation may be strong for them to speak out with regard to issues affecting their interests, and perhaps even to comment on individual candidates for public office.

Nonprofits that qualify for tax exemption under Internal Revenue Code sections 501(c)(3), (c)(4), (c)(5) and (c)(6) need to be particularly cautious in their political activity. The rules covering section 501(c)(3) (which applies to charitable organizations, churches and schools) are the strictest. For those organizations, to participate or intervene in ANY political campaign means the loss of tax-exempt status.

This does not mean, however, that charitable organizations, churches and schools cannot engage in politics or speak out on issues of importance to them.
They can, for instance, invite candidates for public office to speak at an event so long as the same opportunity is provided to all candidates seeking the same office. They can speak out on the moral dimensions of current social issues so long as they do not tie those issues to the positions of particular candidates. They can, in the case of schools, require students to participate in political campaigns of the students’ choice so long as they themselves refrain from opposing or endorsing candidates. They can educate the public in any number of political or civic matters so long as their efforts remain nonpartisan.

Some tax-exempt organizations, such as social welfare organizations, labor organizations and business leagues, can participate in political campaigns on a limited basis. However, that political activity can neither be too partisan, nor can it be the primary work of the organization.

In all cases, the watchword for nonprofits is “Caution!”

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