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Posted by Brenda Booth on Tue, Apr 26, 2016 @ 04:46 PM

Elections have a tendency to permeate everything, from television coverage to social media and even conversations in the workplace. For not-for-profits, keeping politics out of the work environment is essential.

501(c)(3) organizations are, by the definition of their tax-exemption, absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. As such, they should be carefully monitoring their activities and those of their employees for anything that could be deemed politicking. If organizations cross the line with engaging in politics, there could be serious penalties or loss of tax-exempt status.

What is a Political Intervention in a Campaign?

For 501(c)(3) organizations, any amount of participation or intervention in a political campaign on behalf of an elective local, state or national office could trigger IRS consequences and even risk the organization’s tax-exempt status.

The IRS defines political intervention as any activity that shows support or preference for one candidate over another. This can take a variety of forms, including verbal support, distributing statements of support and campaign contributions.

Direct and indirect support of candidates should be monitored, but so, too, should permitted activities, as many can easily cross over into political intervention territory.

Candidate Appearances

Candidates make appearances frequently during the election cycle. Having a candidate speak at your facility does not necessarily mean that your not-for-profit is engaging in political intervention, but parameters need to be in place. The not-for-profit must extend an equal opportunity for the opposing candidates to speak. There should also be no pro-candidate language in introducing the candidate or setting up the forum. Political fundraising also must be kept away from the organization’s facility.

For example, a not-for-profit in a district where three candidates are campaigning for a Congressional seat could invite the candidates to come to its facility and answer questions from the public. So long as the candidates were introduced with value-neutral language and given the same opportunity to answer questions from the public, the appearance would not qualify as an intervention in a public campaign.

There may be other reasons for a political candidate to speak at a not-for-profit organization's facility.  If the candidate speaks in his or her role as a public figure, not as a candidate for office, the not-for-profit must be careful not to mention of the speaker's candidacy during the event. For example, if a candidate running for re-election attends a groundbreaking for a not-for-profit’s new facility, the not-for-profit should introduce the candidate using his or her current title and not make a reference to the candidate’s reelection campaign. So long as the candidate does not speak about the re-election bid, the appearance will not constitute political intervention.

Voting Registration and Drives

Not-for-profit organizations may be tasked with promoting civic participation, and as such, may conduct voter education events. Voter registration, voting drives and other voter education events do not constitute political intervention, so long as they do not directly or indirectly encourage a citizen to vote for a specific candidate or political party in the election. Voter registration events must allow individuals to register with the political party they choose. Any activities conducted in a biased manner are strictly prohibited.

Take the following example. A candidate is running on a platform to increase taxes to help fund local schools. A school in the candidate’s district calls families in the area to ask them how they feel about the school tax issue. If the families being called agree with the tax, the school reminds them about the election and even offers transportation to the polls. If they do not, the school ends the call without the offer or the reminder to vote. This would qualify as campaign intervention.

Employee Participation in Politics

Employees of not-for-profit organizations must be careful that their involvement in a political campaign or support of a candidate is not associated with the not-for-profit. This is especially important for not-for-profit executives and other high-ranking members of the organization, as they are often “the face” of the not-for-profit’s mission.

For example, a not-for-profit executive may appear in an ad in a local newspaper endorsing a candidate, and his name and title may be associated with the candidate. So long as the ad states that the title is used for identification purposes only, the ad would not count as political intervention on behalf of the organization’s CEO. If the same ad were to run in a publication sponsored by the not-for-profit and the not-for-profit’s CEO paid for even part of the ad, the ad would be considered an intervention in the campaign.

To educate their employees and protect from potential issues, not-for-profits should have clear policies in place about what employees can and cannot do in the political realm. These policies should prevent individuals from using work phones to call on behalf of candidates or using corporate social media accounts to endorse a candidate’s political views. Not-for-profits are ultimately responsible for how their facilities and social media accounts are being used, and so they should be careful that these areas remain absolutely free from political activity.

Advocacy

Besides being advocates for their organization, 501(c)(3) organizations may find they want to spread awareness about issues related to their tax-exempt cause. A proposed indoor smoking ban, for example, may be an issue a not-for-profit health services provider would like passed into law. The not-for-profit can hold educational events about the risks of second-hand smoke, but if the smoking ban is a component of a candidate’s platform or is being used as a delineator between two candidates, endorsing the smoking ban may be construed as supporting the candidate who’s pushing for the ban. In that case, advocacy may cross over into political intervention in a campaign.

Lobbying

Advocacy should also be monitored because it can cross into lobbying, which the IRS considers efforts made to influence legislation or policy. Not-for-profits are permitted to engage in lobbying for policies related to their tax-exempt mission, but they must be careful that the activity doesn’t become too “substantial.” If it does, they could face penalties or other consequences from the IRS. How the IRS defines “substantial” is a little nebulous, but there are steps not-for-profits can take if they do engage in a significant amount of lobbying activity that can offer them more protection.

Websites

A website is a form of communication. If an organization posts something on its website that favors or opposes a candidate for public office, the organization will be treated the same as if it distributed printed material, oral statements or broadcasts that favored or opposed a candidate.

During an election year, organizations should also double check the language involved in the links on their site. Though the nonprofit could be vigilant about staying neutral, sponsors may not do the same. The language on the linked page could be a political candidate endorsement.

Enlist Help When Needed

IRS Rev. Rule 2007-41 provides additional details about situations that could trigger involvement in a campaign, and organizations should review the examples in the ruling carefully.

To ensure your organization is adequately protected, you may want to enlist the help of an outside professional who can identify where you may be at risk for political intervention. For more information, please contact us here.

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BoothBrenda Booth is a Director in the Not-For-Profit & Education Tax Practice. She can be reached at 617.761.0729 or BBooth@cbiztofias.com.

 

 

 

 

 

Tags: lobbying, advocacy, tax, election year, not-for-profit, IRS

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