Election season has arrived, and candidates from both major political parties are talking about the issue most important to your private foundation. Can your foundation respond, and if so, in what ways?

Section 501(c)(3) private foundations can educate the public and take positions on public policy issues, even in an election year. But under IRS rules, private foundations cannot engage in “lobbying” or “political” activity. If a private foundation violates these rules, it can face significant financial penalties or lose its tax-exempt status.

Political activity is broadly defined as activity that supports or opposes a candidate for public office (federal, state, or local). Even if a foundation does not expressly support or oppose a candidate, the IRS will evaluate the foundation’s activity under a “facts and circumstances” analysis to see if it indirectly supports or opposes a candidate. According to the IRS, the following factors tend to show that the activity is political:

  • The communication identifies a candidate for public office;
  • The timing of the communication coincides with a campaign or election;
  • The communication targets voters in a particular election;
  • The communication identifies a candidate’s position on a public policy issue;
  • The communication raises an issue that distinguishes candidates in an election; and
  • The communication is not part of an ongoing series of substantially similar communications by the foundation on the issue.

These factors apply to any communication, regardless of its form — public or non-public, an online blog or traditional print media.

The rules against political activity for private foundations also apply to contributions to, or coordination with, candidates and parties. Contributions include cash and in-kind support, such as services performed by a foundation’s employees or use of a foundation’s materials or facilities.

With these restrictions in mind, here are ten “do and don’t” tips for private foundations in an election year.

  1. DO continue to educate the public about issues that are important to the foundation, but exercise caution if it is a “hot button” issue (particularly one that is “new” to the foundation), or if a candidate or the election is mentioned.
  2. DON’T conduct any activities that suggest the foundation views a candidate or the candidate’s views positively or negatively. If a foundation discusses its positions on important public policy issues, it should refrain from comparing the views of the foundation and those of one or more candidates. Other practices to avoid are comparing the views of candidates or placing the foundation’s views in close proximity to the views of candidates (for example, one click on a website), or rating or ranking candidates based on their positions.
  3. DO provide value-neutral reporting on a candidate’s activities, proposals, and statements. A foundation can even thank a candidate for releasing a proposal or discussing an issue. In either case, though, the foundation should not make positive or negative comments about the candidate’s statement.
  4. DO ask candidates questions about issues that are important to the foundation, but don’t suggest, through the form or content of the questions, that the foundation approves or disapproves of the candidate’s views.
  5. DO attempt to engage all major candidates and political parties on an equal basis. Even if the communications are neutral and balanced, the foundation may inadvertently provide more coverage to one candidate over others, or through other practices invite the allegation that the foundation favors one or more candidates.
  6. DON’T share foundation materials or agree to meet candidates, unless the foundation does so on an equal basis and extends the invitation to all major candidates in a given election. Foundations should also avoid providing any “consulting” services, such as offering a detailed analysis of a candidate’s policies at the request of a candidate.
  7. DON’T coordinate activities with any candidate, campaign, or political party. Foundations should not conduct joint events with a candidate, agree to the timing of a foundation report, or use nonpublic information from a candidate, campaign, or party.
  8. DON’T conduct overt political acts as part of foundation activities, such as encouraging voters to vote for a particular candidate or wearing a candidate or political party’s insignia.
  9. DON’T make financial contributions to candidates, campaigns, or political parties using foundation funds, including by purchasing a table at an event or fundraiser.
  10. DO remind employees, officers, directors, and other representatives of the foundation that, while they are free to conduct political activity or engage in political speech in a personal capacity, they should be careful not to suggest that they are representing the foundation. Personal volunteer political activities cannot be subsidized by the foundation – no more than de minimis time spent at the office or de minimis use of foundation resources.

501(c)(3) private foundations are also prohibited from engaging in “lobbying.” (In contrast, 501(c)(3) public charities can engage in a limited amount of lobbying.) Lobbying is generally defined as attempting to “influence legislation,” either through direct communication with legislators and their staff or with the general public. Private foundations should evaluate their activity under the rules against lobbying, particularly in cases where one or more of the candidates is a sitting legislator or if the policy issue addressed is also the subject of pending legislation. 

Promoting a cause or discussing important public policy issues can be especially tricky for private foundations in an election year. Before your private foundation posts to social media, meets with candidates, or publishes a report, it should first consider the rules against lobbying and political activity. Your foundation’s communications and activities should not suggest, even indirectly, that the foundation favors or opposes a candidate for public office.