Political Campaign Intervention by 501(c)(3) Organizations

Organizations with tax-exempt status under Section 501(c)(3) of the Internal Revenue Code include a wide range of charitable, religious, educational, and scientific entities. A defining characteristic of this status is the absolute prohibition against participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office. This is a strict mandate from the Internal Revenue Service (IRS).

The prohibition applies to all forms of campaigning at the local, state, and federal levels. It ensures that organizations benefiting from tax-exempt status and the ability to receive tax-deductible contributions remain dedicated to their charitable missions without diverting resources or influence to partisan politics.

Defining Political Campaign Intervention

The IRS defines “political campaign intervention” broadly, encompassing not just direct actions but also indirect activities that have the effect of favoring or opposing a candidate. The determination of whether an organization has intervened in a campaign is not based on a simple checklist but on a “facts and circumstances” test. This means the IRS will examine the full context of an organization’s actions and communications to assess their true nature.

A “candidate for public office” is an individual who has offered themselves, or has been proposed by others, for an elective public office. The prohibition is absolute, meaning there is no minimum threshold for a violation; a single instance of prohibited activity can jeopardize an organization’s tax-exempt status. To “participate or intervene” includes making public statements of position, whether oral or written, on behalf of the organization that support or oppose a candidate.

The IRS considers several factors when evaluating whether a particular activity or communication crosses the line. These factors include whether the statement identifies one or more candidates, expresses approval or disapproval of a candidate’s positions or actions, and is delivered close in time to an election. The context can also involve whether the communication makes reference to voting or an election.

Prohibited Activities for Organizations

A core violation is the endorsement of a candidate, which can be a direct statement of support or a more subtle expression of preference. This includes written endorsements in official publications and oral statements made by organizational leaders at official functions. For instance, if a university president writes a column in an alumni newsletter stating that a specific candidate should be reelected, this act constitutes intervention because the newsletter is an official publication.

Financial support for a political campaign is strictly forbidden. This ban covers direct monetary contributions to a candidate’s campaign committee, a political party, or a Political Action Committee (PAC). It also extends to in-kind contributions, which involve providing goods, services, or the use of facilities for free or at a reduced rate.

Distributing partisan materials is another prohibited activity. This includes sharing campaign literature prepared by a candidate or political party that explicitly advocate for their election. This extends to the creation and dissemination of biased voter education materials, like publishing a legislative scorecard that appears to favor one candidate over another.

Permissible Activities for Organizations

Despite the strict prohibition, 501(c)(3) organizations can engage in various activities that encourage public participation in the democratic process, provided they are conducted in a non-partisan manner:

• Conducting voter registration and get-out-the-vote drives. These efforts are acceptable as long as they are not targeted to favor a specific candidate or party and are available to the general public without evidence of bias.
• Engaging in issue advocacy, which involves taking positions on public policy issues. An organization may lobby on legislation and communicate its stance, but the focus must remain on the issue itself and avoid any language or timing that connects the advocacy to a particular candidate.
• Publishing genuinely non-partisan voter guides that provide fair and impartial information on all candidates for a particular office. The guide must not include editorializing, imply an endorsement, or compare candidates’ positions in a way that shows a preference.
• Hosting candidate forums or debates under specific IRS guidelines. The organization must invite all legally qualified candidates, give them an equal opportunity to speak, use a non-partisan panel for questions, and ensure the moderator remains neutral. No political fundraising is allowed at the event.

Activities of Individuals vs. The Organization

A distinction exists between the political activities of individuals in their private capacity and the actions of the organization itself. Leaders, employees, and volunteers of a 501(c)(3) organization do not forfeit their First Amendment rights to participate in the political process. They are free to endorse candidates, volunteer for campaigns, and make personal political contributions.

These personal activities must not be attributed to the organization. Individuals must take care to separate their personal political actions from their official roles. This separation requires avoiding the use of any organizational resources for personal political purposes, such as funds, letterhead, email systems, phones, or facilities.

When speaking or writing in a public forum about political candidates, it is important for leaders of a 501(c)(3) to state that their comments are personal and not representative of their organization. A clear disclaimer can help prevent the attribution of personal views to the organization.

For example, if the president of a charity writes a letter to the editor endorsing a candidate, they should not use their official title in a way that suggests the organization’s support. While they can be identified by their title for identification purposes, the context should make it clear the endorsement is a personal one.

Consequences of Violation

Violating the prohibition on political campaign intervention can lead to severe penalties for a 501(c)(3) organization. The IRS has a range of enforcement tools, starting with the imposition of excise taxes under Internal Revenue Code Section 4955. This section imposes an initial tax on the organization equal to 10 percent of the amount of the political expenditure.

A separate initial tax of 2.5 percent of the expenditure can be imposed on the organization’s managers who knowingly and willfully agreed to the expenditure, up to a maximum of $5,000 per expenditure. If the organization does not correct the expenditure in a timely manner, an additional tax of 100 percent of the expenditure can be levied on the organization. A further tax of 50 percent can be imposed on managers who refuse to agree to the correction, with a maximum of $10,000.

The most serious consequence of a violation is the revocation of the organization’s 501(c)(3) tax-exempt status. Losing this status means the organization is no longer exempt from federal income tax and can no longer receive tax-deductible charitable contributions. In addition to taxes and revocation, the IRS may also seek a court order, known as an injunction, to halt any further political expenditures by the organization.