Nonprofit 411: Raising Your 501(c)(3)’s Voice in an Election Year without Risking Its Exempt Status

Nonprofit 411 HemBarr-minBy Dylan O’Sullivan* and Eleanor Evans, Esq., Hemenway & Barnes LLP

Nonprofits play an indispensable role in our nation’s civic discourse, engaging policymakers and the public on issues of moral, social, and economic concern.  For 501(c)(3) organizations, however, this role becomes more complicated during election season due to rules prohibiting them from supporting or opposing candidates for public office.

The Rule Against 501(c)(3) Campaign Intervention

Federal tax law permits 501(c)(3)s to educate and advocate around issues related to their mission, even if those issues are highlighted in political campaigns.  However, 501(c)(3)s that intervene in a campaign on behalf of, or in opposition to, any candidate for elected public office –federal, state or local – risk losing their tax-exempt status.

While 501(c)(3)s may communicate about policy issues related to their mission, they must avoid commenting positively or negatively on candidates, explicitly or implicitly, in writing, orally or online.  A message conveying a preference for or against a candidate violates this prohibition even if it does not expressly encourage voting for or against the candidate or specifically mention the candidate by name.  The line between a permissible and impermissible communication is ultimately a question of whether the communication is about an issue or about a candidate.  Navigating this line is a recurring challenge – one made more acute in a time when many policy issues have newfound partisan political undercurrents.  Despite this ambiguity, there are some factors that can guide 501(c)(3)s as they determine whether or how to weigh in on policy issues during an election.

Factors to Consider When Commenting on Policy Issues in an Election Season

A communication is more likely to be deemed a permissible issue statement if it:

  • Addresses an issue clearly within the scope of the organization’s mission;
  • Concerns an issue the organization regularly comments on outside of election season;
  • Is part of an ongoing series of similar communications on the same issue not related to the timing of any election;
  • Comments on incumbents’ official actions rather than their candidacy (and, preferably, refers to incumbents not up for election as well as those who are);
  • Shares information related to a non-electoral event, such as a vote on specific legislation;
  • Includes a disclaimer noting that, as a 501(c)(3), the organization does not endorse or oppose candidates for elected public office (however, a disclaimer alone is not determinative).

A communication is more likely to be deemed impermissible campaign intervention if it:

  • Identifies candidates (by name or otherwise) or voting in a specific upcoming election;
  • Expresses approval or disapproval of a candidate’s positions and/or actions or compares them to the organization’s views;
  • Is issued close in time to an election;
  • Addresses an issue that has been raised as distinguishing candidates for a particular office;
  • Represents an increase in the organization’s volume of commentary on incumbents as their reelection approaches;
  • Comments on a candidate’s qualifications, character or record, rather than focusing on the substance of a policy issue;
  • Disseminates election-related statements from political campaigns or partisan organizations that have endorsed candidates (e.g., by re-tweeting, liking or sharing social media posts or linking to campaign-related websites).

Commenting on political issues during an election requires 501(c)(3)s to carefully consider the content and context of their communications.  By understanding and applying these rules, 501(c)(3)s can raise their voices on important issues throughout election season without jeopardizing their tax-exempt status.

 

*Dylan O’Sullivan is a law student at Northeastern University School of Law. He is not a practicing attorney.