As election campaigns gain momentum across the country, it is important to know what activities tax-exempt, nonprofit [i.e., 501(c)(3)] groups can conduct. Recent rulings by the IRS have clarified many of the uncertainties expressed by some in the independent sector: while lobbying by non-profits is entirely lawful, political activity is strictly prohibited. So, what is the difference between lobbying and political activity?
Lobbying is defined as influencing the outcome of legislation. Lobbying is a legitimate function of 501(c)(3) organizations, and it is highly appropriate to work for the passage of legislation that would further the group’s cause.
Political activity, on the other hand, is defined as influencing the outcome of an election—federal, state, or local—and is not permitted under the law. Failure to comply with the law could cause the organizations to lose both its tax-exempt status and its ability to assure donors that their contributions are tax deductible.
As a 501(c)(3) you can:
Publish and distribute a voting record that lists pieces of legislation, describes it, and notes how a member voted,
Inform candidates of your position on issues and urge them to support your interests,
Host a public forum to allow candidates to discuss their views on subjects of interest to the organization, and
Distribute position papers to the general public and your members.
As a 501(c)(3) you cannot:
Work for or against the election of a candidate, or endorse or oppose a particular candidate;
Direct financial contributions to a candidate, political party, or political action committee (PAC), or provide in-kind
contributions to a candidate, political party, or PAC.
While this document is intended as a resource guide, it in no way represents legal advice. You may wish to seek legal counsel for specific legal advice on what is/is not permitted under the law.