This post is a continuation of last week’s post on issue advocacy:
Charities and Issue Advocacy: Doing it Right - Part One.

A communication is particularly at risk of political campaign intervention when it makes references to candidates or voting in a specific upcoming election; however, the IRS has emphasized that “the communication must still be considered in context before arriving at any conclusions.” The IRS has further stated that “[a]ll the facts and circumstances need to be considered to determine if the advocacy is political campaign intervention.”

For example, let’s take the case of a charitable organization whose mission is to educate the public about community development issues. Right before an election, the organization released an ad regarding community development issues, including the need for mass transit. Funding issues regarding the new mass transit project have been hotly debated by two state senate candidates competing for the same elected office, with one candidate in favor of the project and the other against it. The ad does not name a candidate or a particular political party, but it does encourage voters who are in support of the mass transit project to show their support when electing their next state senator. The IRS found that such an ad would violate the prohibition on political campaign intervention because (1) the ad was released shortly before the election and (2) the ad took a position on an issue that was a prominent issue in a campaign that distinguished the candidates.

On the other hand, if the organization had a pattern of engaging in such advocacy during non-election years using the same means and scope, and it just happens this election year the candidates have taken a strong platform position on the issue, which is out of the control of the organization, then the IRS may view such activity as issue advocacy and not as prohibited political campaign intervention. Although there are no clear answers, the IRS factors can help a charity determine if its issue advocacy communications fall dangerously close to prohibited political campaign intervention.

Charities are not prohibited from engaging in all election-related activities. Charities can engage in nonpartisan and neutral activities, such as publishing voter education guides, and activities intended to encourage people to participate in the electoral process, such as voter registration and get-out-the-vote drives. However, if voter education or registration activities show bias that (a) would favor one candidate over another, (b) opposed a candidate in some manner, or (c) have the effect of favoring a candidate or group of candidates, then these activities would constitute prohibited political campaign intervention.

Finally, charities should be aware that activities by their employees can unintentionally expose them to engaging in prohibited political campaign intervention. Individuals have First Amendment rights of free speech and can engage in political campaign activity in their individual capacity. And charity employers do not want to stifle their employees’ rights, but they must protect themselves from exposure to charges of engaging in prohibited political campaign intervention. Organizations should have clear policies in place, and provide their employees with training on these policies. Here are a few tips to help avoid prohibited political campaign intervention by employees:

  • Do not allow employees to use the organization’s assets or facilities for their electoral work, including the organization’s issued emails or staff’s time.
  • Do not allow employees to use their work email account to pass on information about individual candidates.
  • Do not publicize an individual’s personal election choices in organizational materials.
  • Do not support or oppose candidates at an organization-sponsored event.
  • Use visible disclaimers.
  • Check that appropriate disclaimers are used by others (e.g., when an individual is speaking in his or her individual capacity, that individual’s title in the organization, if stated, should be for identification purposes only).

Issue advocacy is a powerful tool for charities to impact public policy issues. Charities should continue to speak out on causes and issues that are important to them, but they also should be aware that the difference between issue advocacy, lobbying and prohibited political campaign intervention are important to recognize and can affect charities’ tax-exempt status.

Resources:

Political Ads: Issue Advocacy or Campaign Activity Under the Tax Code? (Erika K. Lunder)

Nonprofit Radio: Your Nonprofit in Politics (Emily Chan)

Revenue Ruling 2007-41

The Restriction of Political Campaign Intervention by Section 501(c)(3) Tax Exempt Organizations (IRS)

 

- Michelle Baker

Michelle Baker is is a San Francisco-based attorney interested in social impact.

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  1. […] See also Charities and Issue Advocacy:  Doing it Right – Part Two  […]