Can Nonprofits Endorse Politicians?

Nonprofit organizations are often concerned about matters of public policy and advocacy since the nonprofit may be directly involved in the policy issues. Having informed nonprofit entities involved in policy discussions is often a benefit to the public, but before straying into public policy, 501(c)(3) organizations must understand the Internal Revenue Service (IRS) rules—one of the most basic being that the activities of endorsing politicians and lobbying are distinct. Lobbying activities are a perfectly acceptable, within limits, but endorsing politicians is not.

“A 501(c)(3) organization may not endorse a candidate. That’s ground for revocation of tax exemption, and that’s very explicit in the tax code,” says Arthur Rieman, an attorney who advises and represents nonprofit organizations in Southern California. Specifically, the Internal Revenue Code defines a tax-exempt, section 501(c)(3) organization as one that does not participate in any political campaign, whether that is support or opposition for a candidate.

What Counts as Endorsing a Candidate?

For 501(c)(3) organizations, the IRS lists activities that will clearly violate the ban on political campaign activity, including:

• Contributions to political campaign and political candidate funds
• Public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office

Individuals who work for the nonprofit may participate in campaigns and make campaign contributions as any other citizen would, but will want to ensure their conduct is clearly on behalf of themselves and not the organization.

Just how close can a nonprofit get to endorsing a candidate? Rieman says 501(c)(3)s “shouldn’t get close at all [because the IRS] draws a pretty tight line [in interpreting the rule].” To assist nonprofits in interpreting the endorsement rule, Rieman points clients to an IRS publication—often updated around election time—that provides examples to nonprofits of conduct that violates and doesn’t violate the rule.

Voter Registration and Education

Certain nonprofit political activities and expenditures may be considered voter registration or voter education activity, which is not prohibited by the endorsement rule. However, it will depend on the facts and circumstances.

“Organizations often want to do an election guide,” Rieman says. “They’ll send out to their mailing list a supposed list of how candidates stand on particular issues. If that’s truly neutral and covering a broad set of issues, that might be considered educating the public.”

But that organization could face scrutiny from the IRS, “if you limit that guide to those issues that you and supporters have a position on,” he adds. “Let’s say the nonprofit is an abortion rights organization or an anti-abortion organization. If you ask candidates what their position is on abortion, or Roe v. Wade, it’s pretty clear to everyone that you are looking for candidates that support your position. Even if you don’t endorse them, the IRS is going to take the position that election card is really a hidden way to endorse a candidate for office—in effect, an illegal campaign activity.”

501(c)(3) organizations must ensure their election activities are not conducted in a partisan manner. Voter registration drives are also outside the campaigning prohibition, if the drive is conducted in an unbiased manner. Rieman provides many suggestions for conducting a nonpartisan registration drive, some of which include:

• Voter registration should be made available to everyone without regard to a voter’s political preference
• Mention no candidates or mention all candidates
• Select the location based on nonpartisan criteria

501(c)(3) organizations that conduct voter education and registration activities must be aware the IRS may review its activities for any evidence of political bias. Nonprofits must ensure their election activities do not favor or oppose one candidate over the other or have the effect of favoring a candidate or group of candidates or political party. If the activity crosses the line the organization is at risk of engaging in prohibited campaign participation.

Find Legal Help

If a nonprofit or its employees want to engage in voter education, that nonprofit should first get legal advice from an experienced nonprofit attorney to ensure there is no risk of losing its tax-exempt status due to the activity.