Nonprofits and Political Campaign Activity

     It's election season, and that means the conversations about candidates and policy issues are reaching a fever pitch. Today I’m sharing the rules that govern what 501c3 nonprofits can and cannot do. 

     It's important to note that I'm not an attorney and this material is not intended to be a legal recommendation. However, since violating these laws could jeopardize your nonprofit status, I consider it a very important financial matter that we need to discuss. 

How The Johnson Amendment Impacts the Political Activities of 501c3 Nonprofits

     First, a little history about where these laws come from. The restrictions about nonprofits endorsing candidates entered the IRS code in 1954. It's called the Johnson Amendment, and as you can guess, it did relate to President Lyndon B Johnson; however, it actually dates back to his Senate campaign. When Johnson was running for the Senate, he was opposed by a nonprofit group. Upon his election, he introduced an amendment intended to restrict nonprofits from speaking out against a candidate or, likewise, endorsing a candidate. 

     Interestingly enough, the Johnson Ammendment was added to the IRS code without any debate, and it has remained unchallenged ever since. According to my research, no nonprofit has ever lost its nonprofit status because of the Johnson Amendment. Now, many nonprofits have received letters regarding compliance and ceasing certain activities, but, to my knowledge, none have actually lost their exempt status. 

What You CAN’T Do Politically as a 501c3 Nonprofit

1.  You cannot endorse or oppose a candidate.
2.  You cannot donate to political campaigns, whether through money, resources, or time.
3.   You cannot make public statements that support or oppose a candidate. So, a nonprofit cannot use platforms like a newsletter or website to make statements in favor of or against certain candidates.
4.  You cannot host a campaign event designated to support or oppose a specific candidate.

 But, hello? We're nonprofits! We do good in the world! We have a purpose! We have a cause! 

Clearly we have to be able to do something…? What can we do? 

What 501c3 Nonprofits CAN Do Politically 

1.  Nonprofits can be engaged in nonpartisan voter education, including voter guides or voter registration drives, as long as they're not about supporting candidates. 
2.  We can advocate for issues. So nonprofits are allowed to advocate for policy issues that align with their mission. Especially during election season, we have to be involved! The political realm is one of many realms that we advance our cause. So we should speak about the issues. 
3.  While we cannot conduct forums or debates that are geared towards one candidate, we can provide a neutral platform in which both candidates have similar access.
4.   We can publish nonpartisan, fact-based analysis of the issues that matter to them. 

Can Nonprofit Leaders Share Their Political Views Publicly? 

     Nonprofit leaders like pastors, Executive Directors, and board members are citizens too. They're not just where they work, but also individuals with personal opinions. They are free to personally make statements about candidates; however, it is recommended that they should not use their title or their affiliation when making those statements in public. 

     What a fun (and hot) topic this is! I want to encourage you to consult with an attorney on any specifics of this situation. If you like engaging conversations like this, I want to invite you to join my weekly email here to receive my nonprofit financial tips. 

Be watching those emails because we have a very special opportunity coming soon!