Political Activity: Know Your Limits
Federal laws closely regulate the types of political activity in which nonprofits may engage without losing tax-exempt status. Also, nonprofits engaging in political activity can face inspection by competitors and regulators. They also risk damage to their reputations. Likewise, understanding rules governing nonprofit political involvement is an essential aspect of risk management.
Venable, LLP, a law firm with a large nonprofit practice, presented a webinar recently on politics and nonprofits. Some of the main points follow.
Types of Nonprofits and Political Activities
The types of political activity prohibited and open to you as a nonprofit vary depending on your organization’s classification.
- 501 (c)(3) – These nonprofits should not engage in any type of campaign “intervention,” which would include endorsements, contributions, or activities supporting specific candidates. Thus, these nonprofits cannot engage in lobbying or any coercive activity.
However, there are numerous political activities in which 501 (c)(3) nonprofits can engage, including:
- Urging candidates to support specific policies
- Communicating with candidates on issues
- Hosting debates and formal discussions
- Holding voter registration drives
- Publishing legislative scorecards, including past voting histories
Employees of 501 (c)(3) organizations have more freedom to personally get involved in political campaigns as long as they do not use their nonprofits’ own resources. You may personally endorse candidates, and use your title. However, you must be clear that this is a personal choice rather than one made on behalf of your nonprofit.
- 501 (c)(4) and (c)(6) – These types of nonprofits may engage in more active involvement in political campaigns, as long as this involvement is not the main focus of the nonprofit. Likewise, it includes extensive lobbying and donations.
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