Political Activity – What Is Permissible and What Is Not, for Your Nonprofit?

“Political activity often comes with scrutiny from regulators, the media, competitors, and different watchdog organizations, but reputational risk is one of the biggest impediments to successful political activity for nonprofits. Despite the risks, there is much that can still be done.”

So says Venable, LLP, a law firm with a large nonprofit practice. 

With the November elections only a few months away, nonprofit organizations need to understand what political activity is permissible under federal law and regulation, and what activity might jeopardize the organization’s tax-exempt status. 

Guidance from Venable:

The rules are very different for 501 (c)(3) organizations than for 501 (c)(4) and (c)(6) organizations. There can be no campaign “intervention” for (c)(3) organizations; that is, no candidate contributions, endorsements, or activities that support particular candidates. There cannot be efforts to influence legislation. However, there are many activities the organization may engage in, such as communicating on issues, urging candidates to support certain policies, writing position papers, hosting a debate or forum, conducting voter registration drives, and publishing legislative “scorecards.”

Individual 501 (c)employees (3) have additional latitude, as long as the organization’s resources are not used for those additional activities.

In contrast, 501 (c)(4) and (c)(6) organizations may engage in “intervention” that is described in detail in the regulations, as long as that intervention is not the organization’s primary purpose.

From a risk management standpoint, it’s important to know the rules and keep your organization well within them.