Look Before You Leap Into Political Activity

The coming months will feature the confirmation process of a new U.S. Supreme Court justice, a midterm election, and plenty of talking heads and Twitter handles sounding off on how their side is right and the other’s is terribly mistaken.

    It might seem natural for nonprofits leaders to want to weigh in and have their organizations support various political causes. The tax code might have something to say about that, however, according to Elizabeth Kingsley and John Pomeranz, both attorneys at Harmon, Curran, Spielberg & Eisenberg LLP in Washington, D.C. There are numerous questions and considerations to be made. The two discussed several during their session, “Political Activities,” at the 2018 American Institute of Certified Public Accountants Not-For-Profit Industry Conference in National Harbor, Md. Such questions and considerations include:

  • What is “electioneering?” Electioneering activities include efforts to encourage votes for or against a particular candidate, in-kind contributions to a candidate, endorsement, rating or scoring a candidate on a particular issue, or comparing the organization’s positions with candidates. Activities that are not considered electioneering include helping individuals register to vote, educating voters about candidates, taking positions on issues, educating candidates, and encouraging voting so long as these activities do not favor one candidate over another;
  • When determining whether an organization’s activity consists of electioneering, what are things to look for under a facts and circumstances test? Good facts, meaning that the organization is less likely to be engaging in electioneering, include no references made to candidates, timing of messaging that has external drivers, activities centered around a broad range of issues, and a history of similar work. Bad facts, conversely, include reference to specific candidates, election-motivated timing, and politically motivated targeting;
  • What is an organization to do with when non-political aspects of mission might have political connotations? The primary focus is partisanship, according to the speakers. A 501(c)(3) focused on civil rights can, for instance, seek to register African-American constituents to vote even though African Americans are statistically more likely to vote Democrat. Similarly, an Evangelical church can support voter-registration efforts even though the majority of Evangelicals vote Republican. The focus is on whether such activities are partisan-motivated;
  • What type of organization are you operating? A 501(c)(3) organization cannot engage in political activity. Other 501(c) organizations such as 501(c)(4)s and 501(c)(5)s cannot be primarily focused on electioneering. A 527 political organization, which might include political action committees and the parties’ national committees, must have a political primary purpose. A simply test is that 501(c)(3) organizations cannot electioneer; other 501(c) organizations can, but not too much; and 527 organizations should focus on electioneering; and,
  • Should the organization, a 501(c)(4) for example, establish a 527 organization? Yes, when it starts getting into the area of electioneering being a primary activity. Where exactly does that line begin and end? It is unclear, though Kingsley suggests giving your organization a little more room than 50 percent/50 percent line.