IRS spells out the rules for nonprofits and candidates
The IRS commisioner for tax exempt and government entities in 2008 issued a letter to political party campaign treasurers spelling out the role nonprofit organizations can play during election campaigns. It's a useful guide for nonprofits considering candidate forums, voters guides or get-out-the-vote activities.
Commisioner Steven Miller's letter states: "The reason I am writing is to provide you with the rules charitable organizations, including churches, must follow with respect to political activity. With this knowledge, you can help ensure that during this election season your committee and the candidates you support do not inadvertently jeopardize the tax-exempt status of any charitable organization."
Miller goes on to say: "Organizations described in section 501(c)(3) of the Internal Revenue Code that are exempt from federal income tax are prohibited from directly or indirectly participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office. Charities, educational institutions and religious organizations, including churches, are among those that are tax-exempt under this code section."
On the other hand, Miller wrote, "Organizations may encourage people to participate in the electoral process by sponsoring debates or forums to educate voters, distributing voter guides, or conducting voter registration or get-out-the-vote drives."
However, Miller wrote, "If the debate or forum, voter guide, or voter registration or get-out-the-vote drive shows a preference for or against a certain candidate or party, however, it becomes a prohibited activity."
Federal law prohibits tax-exempt charitable organizations from endorsing any
candidates, making donations to their campaigns, engaging in fund-raising, distributing statements, or becoming involved in any other activities that may be beneficial or detrimental to any candidate. Even activities that encourage people to vote for or against a particular candidate on the basis of nonpartisan criteria violate the political campaign prohibition of section 501(c)(3), Miller wrote.
