What are the laws that keep 501c3 nonprofit organizations from participating in politics?
501(c)(3) nonprofit organizations are prohibited from participating in politics by two main laws:
- Section 501(c)(3) of the Internal Revenue Code: This law states that a 501(c)(3) organization “which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for elective public office.” This means that 501(c)(3) organizations cannot endorse or oppose candidates for public office, make contributions to political campaigns, or engage in any other activities that could be seen as taking sides in an election.
- The Johnson Amendment: This amendment to the Internal Revenue Code, enacted in 1954, further restricts the political activities of 501(c)(3) organizations. It states that an organization’s tax-exempt status will be revoked if it engages in “substantial” political campaign activity. The IRS has interpreted this to mean that any organization that spends more than 5% of its budget on political activities will lose its tax-exempt status.
These laws are in place to ensure that 501(c)(3) organizations maintain their nonpartisan status and do not use their tax-exempt status to influence elections. There are a few exceptions to these rules, such as voter education activities that are conducted in a nonpartisan manner. However, in general, 501(c)(3) organizations must be very careful not to engage in any political activities.
Here are some specific examples of activities that are prohibited by the laws against political campaign intervention by 501(c)(3) organizations:
- Endorsing or opposing candidates for public office
- Making contributions to political campaigns
- Distributing partisan voter education materials
- Holding events that are primarily political in nature
- Lobbying on behalf of or against specific legislation
If a 501(c)(3) organization is found to have violated the laws against political campaign intervention, it may lose its tax-exempt status and be subject to penalties. Therefore, it is important for all 501(c)(3) organizations to be aware of these laws and to take steps to ensure that they are in compliance.