Political Activities of 501(c)(3)s and the IRS
Involvement of 501(c)(3) organizations in political activities has been a hot button at least since the 1960s. It's a complicated subject. But there's one part of it that really seems pretty straightforward -- these organizations are not allowed to work to influence the outcome of any election. Still every campaign season brings new claims that 501(c)(3)s are violating the rules, and new complaints that the IRS response is "politically motivated."
The IRS has just published on its webpage an extensive discussion of this problem.
See
http://www.irs.gov/charities/article/0,,id=154622,00.html
Since the 2004 election season, the IRS has investigated 82 complaints about nonprofits getting involved in election campaigns. After examination, the IRS concluded that there had been some level of prohibited activity in three-quarters of the cases. An IRS press release quotes the Commissioner of Internal Revenue: "'The law does not allow charities to participate in political campaigns,' said IRS Commissioner Mark W. Everson. 'While the vast majority of charities, including churches, did not engage in politicking, our examinations substantiated a disturbing amount of political intervention in the 2004 electoral cycle. As the 2006 electoral season approaches, we are going to provide more and better guidance and move quickly to address prohibited activities.'" There's a link to the full press release on the web page mentioned above.
Also on the web page the IRS has published the text of its report on its investigations of the 2004 issues, a fact sheet about involvement in political campaigns for covered nonprofits, and the complete text of the procedure manual that will be used for the 2006 political season.
Involvement in political campaigns is different from lobbying. And lobbying is different from advocacy.
All 501(c)(3)s are prohibited from any sort of campaign activity.
Public charities, but not private foundations, can engage in some lobbying activities -- lobbying in this sense is working to encourage passage or defeat of legislation at any level.
And speaking out on issues in ways that have no connection to election campaigns or legislative actions -- advocacy in the broadest sense of the term -- is a time-honored activity for nonprofits of all sorts.
There's lots more information about these questions at the website of the Center for Lobbying in the Public Interest --
http://www.clpi.org
As the 2006 political season heats up, and as partisans of every stripe are seeking advantage in every way they can think of, nonprofits need to be alert to prevent their tax-exempt status from being hijacked by partisans on one side, or called into question by partisans on the other.
(Note: I heard about these new publications of the IRS because I subscribe to the free IRS email newsletter EO-Update. Information on how to sign up to receive future issues is at
http://www.irs.gov/charities/page/0,,id=130596,00.html.)
Putnam Barber, Editor
The Nonprofit FAQ
Posted by Putnam on February 28, 2006
[ Give Us Your Feedback | Mail a friend | FAQ Bulletin ]
