Election Year Issues for Nonprofit Organizations

Federal Election Laws, State Laws, and the Internal Revenue Code regulate or limit certain activities in connection with elections – and these are particularly important for nonprofit organizations.

This does not mean that lobbying and other nonprofit advocacy activity must be stopped. An election period may be the most opportune time to focus the attention of the public, elected officials and candidates on your issues. This Alert is a quick review of basic issues, and includes questions that have already arisen from members this year.

I. Churches and other organizations which are exempt from taxation under I.R.C. Section 501(C)(3) may not endorse or in any way support or oppose a candidate for elected office. This does not prohibit officers, members or employees from political participation as individuals. But if they identify themselves with the organization, they must make clear that they are speaking or acting for themselves and not their organization. (If they do not identify themselves but the media does, they have done nothing wrong.)

Officials or staff members may be candidates for office, but as with any other candidate, resources of a 501(C)(3) organization (mailing lists, facilities, staff time, etc.) may not be used in support (or opposition) of the candidacy.

II. 501(C)(3) exempt organizations may inform candidates of their own positions, urge candidates to support their views, conduct public forums with candidates, conduct voter registration drives, have ‘get out the vote’ campaigns, and carry out voter education efforts. But in all of these activities, organizations must be careful to not act or appear to act in what the IRS considers a ‘partisan’ manner’. (Voter education activities such as questionnaires and voters’ guides are particularly sensitive)

III. 501(C)(4) and other exempt organizations may endorse candidates and engage in certain other activities forbidden to (C)(3) groups, so long as these political activities remain secondary to their primary work. To be safe, political program activities should be clearly less than other program work, in terms of costs, volunteer hours, and other measurements of activity. While Federal election law generally prohibits contributions by corporations in federal elections, Maryland law does permit corporate contributions in state elections – so a 501(C)(4) nonprofit could make a contribution to a state candidate.

IV. All nonprofits must observe other applicable federal and state laws relating to elections and political activity, such as rules of the Federal Election Commission, as well as restrictions tied to federal or other government funding they may receive.

Candidate Appearances and Forums

501(C)(3) organizations may sponsor public forums or debates, but here the IRS has indicated that the topics should cover a broad range of issues, not limited to those that are the specific concerns of your group. (This is to avoid an implication, from the degree of agreement with your own group’s views, of which candidates you might prefer).

In any of the above cases, even-handedness is vital in all aspects of the activity. All bona fide* candidates must be invited to participate – and at the same or comparable opportunities; all candidates must be given a chance to answer all questions asked; questions formulated by your organization should not show bias. (In a public forum or debate, IRS ‘guidance’ suggests that prepared questions be formulated by an independent panel) You should not comment or editorialize on the content of candidates’ answers or remarks. In an open meeting where questions from the public are allowed, you are not required to be responsible for the nature of the public’s questions, but your moderator should try to assure balance. (*you may establish reasonable, objective standards to exclude fringe candidates, particularly when the number of all filed candidates makes a productive forum or debate impractical)

If your organization operates a number of facilities or centers, make sure that staff are aware of these considerations – candidates will seek opportunities to make campaign visits, to meet with and seek the support of clients or those using your services. Allowing this type of activity at the request of an individual candidate can compromise your organization’s non-partisanship. Try to control any of these events so that you can conform to the standards above. In no case should you allow fund-raising on your property, posting of campaign signs, distribution of literature, etc.

You may invite public officials, who may also be candidates, to events in their capacity as public officials – in which case you need not invite other candidates. But you must do everything possible to prevent their appearance from becoming or appearing to be a campaign activity. Establish that there is a logical reason for their appearance, avoid any mention of their candidacy or the election at or in connection with the event. Advise the invitee of your IRS status and the constraints you must ask them to observe. (It is strongly advised to do this in writing, before the event, and to keep a copy) If you act in good faith, and unexpectedly the official does something to promote themselves in connection with the election, the IRS should not hold you responsible.

Other nonprofits, such as 501(C)(4) organizations, 501(C)(6) trade associations, or labor unions, may sponsor partisan appearances, and for example, public events with candidates focused just on their issues.

There are numerous sources of additional information on these subjects available in Maryland Nonprofits’ reference libraries, and on the Internet, including:

The Center for Lobbying in the Public Interest has a very helpful web site at - http://www.clpi.org

Alliance For Justice offers technical assistance with advocacy questions via email to advocacy@afj.org

You can also contact Henry Bogdan, Public Policy Director at Maryland Nonprofits for further information or assistance, at 410-727-6367 ext. 18, or at hbogdan@mdnonprofit.org

The foregoing information is intended for general guidance and is not intended as legal advice or to replace legal counsel. (Revised 3-1-06)