What your nonprofit can and can’t do

Although 2018 isn’t a presidential election year, election season is shaping up to be extremely active. On the federal level, races are underway for all seats in the U.S. House of Representatives and about one-third of the seats in the U.S. Senate. And that’s not to mention the hundreds of races at state and local levels.

Does your not-for-profit know the rules about acceptable and prohibited political activities? If not, you’d better study up. Fail to adhere to them and your organization risks losing its tax-exempt status.

Avoiding political intervention

The IRS states that 501(c)(3) organizations can’t participate or intervene in any political campaign on behalf of, or in opposition to, any candidate for public office. An organization engages in political intervention when it 1) makes or solicits contributions to or for candidates or political organizations, 2) endorses a candidate or rates the candidates, 3) publishes or distributes partisan campaign literature or written statements (including online material), or 4) lets its representatives speak out about a candidate.

Repealing this prohibition has been discussed in Washington, but these rules are still in place.     However, you can conduct nonpartisan activities that educate the public and help them participate in the electoral process as long as these activities are in line with your exempt purpose.

Communicating with voters

Not-for-profits can provide voter education, including voter registration or get-out-the-vote drives — if they’re conducted in a nonpartisan manner. To reduce the odds of bias, you should avoid mentioning any candidates or political parties in communications about the activity.

For example, get-out-the-vote communication efforts should only urge people to register and vote, and describe the hours and places of registration and voting. Any additional services offered, such as rides to polling places, should be offered to everyone, regardless of political affiliation.

Some nonprofits compile the voting records of incumbents or document candidates’ responses to questions posed by the organization. Regardless of its form, a voter guide must cover a broad range of issues and refrain from judging the candidates or their positions.

Voting records can be considered political campaign intervention if they identify any incumbent as a candidate or compare an incumbent’s positions with those of other candidates or your organization. Such guides are particularly risky if published simultaneously with a political campaign or if they’re targeted to areas where campaigns are occurring.

Pinning down positions

Organizations sometimes use questionnaires to collect and distribute information about candidates and the issues. Phrase questions neutrally, in a way that doesn’t suggest a bias or preferred answer. For example, “Do you support saving innocent lives through gun control?” probably won’t fly. Further, send any questionnaire to all candidates for an office, publish all responses received (without substantive editing) and avoid comparing the responses to your own positions.

Hosting candidates

Candidate appearances can take a variety of forms. For example, so-called “noncandidate” appearances take place when candidates appear in a role other than that of the candidate or to speak on a topic other than the election.

To pass muster with the IRS, your organization should maintain a nonpartisan atmosphere at the event and ensure that no campaigning activity goes on. None of your organization’s representatives should mention the campaign or the invitee’s candidacy. And any announcement of the event should clearly indicate the capacity in which the candidate is appearing. Again, avoid mention of his or her candidacy.

If a candidate is invited to speak as a candidate, your organization is engaging in political campaign intervention unless it gives all qualified candidates an equal opportunity to speak —with substantially similar invitations and events. Your organization also must make clear that it neither supports nor opposes any speaker’s candidacy.

Candidate forums in which all of the politicians appear together are generally permissible. But ensure that the candidates are treated fairly and impartially.

Too important to dismiss

The IRS itself admits it has only proposed revocation of tax-exempt status because of a nonprofit’s involvement in political activities in a few egregious cases. But don’t take that risk. Intervening in political campaigns also can lead to excise taxes on the amount of money spent on the prohibited activity, as well as reputational damage. Always make sure your political activity is clearly nonpartisan.