The ads have started to appear online, as well as in radio and television spots. By the time the leaves have started to turn a wide variety of brilliant colors, political ads will dominate the airwaves leading up to the midterm elections. What types of activities can your nonprofit organization participate in during the upcoming election cycle, or any political cycle for that matter?
Knowing the answer to this question determines whether your nonprofit plans to hold a political event that violates the legal restrictions that apply to 501(c)(3) organizations.
What Are the Types of Political Activities Your Nonprofit Must Avoid?
To maintain your nonprofit’s tax-exempt status, your organization cannot engage in any direct or indirect activities that campaign either for or against a political party and a candidate running for an elected office. The same principle applies to issue-based campaigns. Your nonprofit organization runs afoul of political campaign laws and thus endangers its nonprofit status under four broad legal guidelines.
First, your nonprofit cannot engage in political activities that result in a direct financial benefit to your organization. Second, lobbying a politician to promote a particular cause can jeopardize your organization’s tax-free status. Third, your nonprofit cannot become active in any type of political campaign and finally, your organization is prohibited from conducting political activities that increase revenue.
The prohibition of participating in political activities does not mean the members of your nonprofit cannot express their views on politicians and political issues. You also can express your political views concerning public policy initiatives. However, you cannot associate your personal views with your nonprofit organization.
What Political Activities are Allowed?
The ban on participating directly and indirectly in political campaigns is meant to discourage nonprofits from taking sides during election cycles. However, this does not mean your nonprofit cannot host a candidate forum, as long as every candidate listed on the ballot has an equal opportunity to present policy platforms and political viewpoints. You must recruit a neutral moderator who is not affiliated with any political organization to oversee the candidate forum.
Your nonprofit organization can organize a voter registration drive only if it does not come out in favor of any candidate or political issue. Supporting a particular candidate or a side in a political debate represents the quickest way to lose your nonprofit’s tax-exempt status. Helping develop a political party platform is another way for your nonprofit to violate the campaign laws established at the federal level.
One of the many slippery slopes nonprofit organizations face concerns inviting a candidate to speak at a special event. Your nonprofit remains a tax-free organization if it provides every candidate an equal opportunity to speak at the special event. Your nonprofit cannot support any candidate and/or political issue, as well as turn a political speaking event into a fundraising campaign.
Err on the Side of Caution
Any nonprofit organization that violates political campaign laws can face fines, excise taxes, and/or the revocation of its tax-free status. If you have any questions regarding an upcoming event during the election season, contact us to determine whether your nonprofit might participate in an activity that violates a campaign law.