Let’s start with the obvious; 501(c)(3) organizations are ABSOLUTELY PROHIBITED from directly or indirectly participating in or intervening in any political campaign on behalf of, or in opposition to, any candidate for elective public office. The penalty for doing so is the revocation of an entity’s tax-exempt status plus the imposition of certain excise taxes – see below.
Now that we have your attention, let’s define what political activities are prohibited.
Contributions to a political campaign:
Public statements of position:
Use of the Organization’s assets (facilities):
Hopefully, your organization is answering the following question – found on Form 990, Part IV – “NO”
3 Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If “Yes,” complete Schedule C, Part I…
However, if you find yourself answering this question “Yes,” your organization will be subject to a two-tier excise tax on both the organization and the management determined as follows:
Now let’s discuss what activities are allowed – in a non-partisan manner of course:
You can promote community involvement by having a booth at the local fair encouraging people to register to vote as long as there is no reference to any candidate or political party.
In summary, you should avoid making contributions or statements in favor of or in opposition to any candidate or political party anytime, but especially during an election cycle when public/oversight scrutiny is at a heightened level of awareness.
If you have questions or comments about evaluating this issue, please feel free to reach out to us.
If you have any questions about this not-for-profit update, please contact your Withum professional, a member of Withum’s Not-for-Profit & Education Services Group or fill in the form below.