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Political Activity and Public Charities

Lobbying and political activity are easily confused. It is vital for public charities (501(c)(3)s) to know the difference.

Lobbying means that the organization is trying to influence legislation; political activity refers to partisan campaigning or nonpartisan voter involvement. Public charities are allowed to lobby but, like most nonprofits, they can lose their tax-exempt status if they engage in political campaigns and electioneering. The IRS has set strict guidelines for public charities and other tax-exempt organizations and expects each of them to pay close attention to these regulations.

What is political activity?

The IRS defines two kinds of political activity. One is electioneering — participating or intervening in political campaigns for or against a candidate for public office — and the other is nonpartisan voter involvement. Electioneering — partisan activity — is strictly prohibited for 501(c)(3)s but allowed for Section 527 organizations as defined by the IRS. Public charities can get involved in educational and get-out-the-vote activities but taking sides is forbidden.

What constitutes electioneering?

Understanding the IRS terms can keep an organization from stepping out of bounds. The key IRS definitions for electioneering:

  • Candidate for public office is an individual running for a national, state, or local elective office. It does not apply to nominees for appointed offices. An individual can be considered a candidate even before having officially announced his candidacy.
  • Participating or intervening means written or oral endorsement of any kind of a candidate, rating candidates, forming a Political Action Committee (PAC), coordinating educational or lobbying activities with a campaign, or contributing or soliciting funds for campaigns or candidates. 

What can a public charity do?

A public charity can engage in voter registration, educate the public on issues in a nonpartisan manner, and allow its staff to participate in political campaign activities as private individuals.

Nonpartisan Voter Participation

Nonpartisan voter activity means that the organization gives voter registration assistance without screening voters and plans drives without trying to affect the outcome. More specifically, this means that the organization can not

  • name candidates when encouraging people to vote
  • use registration lists to identify unregistered voters to target Republicans or Democrats
  • select areas for drives because a certain candidate there is a favorite
  • define subgroups by political or ideological criteria

The organization may focus on specific minority groups even if statistical data indicate a political preference, subgroups tied to discrimination (race, gender, language, poor, unemployed), or subgroups sharing common problems (farmers, business people.) The organization must be able to provide contemporaneous reasoning for its drives and not rely on after-the-fact rationales. If questions arise, it must be able to show what motivated it to make decisions before the event.

Voter education

When planning educational programs, a charity should pay attention to following guidelines:

  • Don’t introduce new issues close to an election.
  • Don’t coordinate activities with a candidate’s schedule.
  • Focus on broad issues and avoid high-profile issues that already divide candidates.

When organizing candidate forums,

  • show no bias when choosing the location, the expert panel, and when allowing the candidates to express their opinions
  • address issues that have regularly been of concern to your organization
  • invite all viable candidates to your forum — even if they may not be able to attend
  • don’t editorialize informational reports

The line between nonpartisan voter participation and partisan campaign activity can be very thin. This paper only touches some issues. If a public charity is not sure about its options, it should seek legal counsel or simply stay away from unclear territories.

 

101 Resource | Last updated: February 28, 2024

Resource: The IRS provides detailed information on election year issues.