On June 1, 2007 the Internal Revenue Service released Revenue Ruling 2007-41 to remind 501(c)(3) organizations of the prohibition on partisan activity by charitable organizations. Generally, 501(c)(3) organizations are prohibited from intervening in political activity, but may engage in certain non-partisan election-related activity. Revenue Ruling 2007-41 provides clear definitions and a number of hypothetical examples to assist nonprofit organizations in complying with the law.
Revenue Ruling 2007-41 sets out 21 hypothetical examples that highlight the distinction between permissible and impermissible campaign activity. In addition, the Revenue Ruling identifies several sets of factors the IRS considers when determining whether impermissible partisan activity has occurred. This analysis highlights the key points made by the IRS about six categories of activities: voter education, voter registration, and get-out-the-vote drives; individual activity by organizational leaders; candidate appearances; issue advocacy; business activity; and Internet activity.
Voter Education, Voter Registration, and Get-Out-the-Vote Drives
Section 501(c)(3) organizations may engage in voter education, voter registration, and get-outthe- vote drives, provided they are strictly nonpartisan and do not show bias or preference for the views of any particular candidate. For example, nonprofit organizations may promote voter registration without naming a particular candidate. A telephone bank that attempts to persuade voters based on their stated support for a particular candidate, or that is targeted to issues that divide candidates in an upcoming election are prohibited.
Individual Activity by Organizational Leaders
Leaders of nonprofit organizations may speak freely on political or public policy issues, provided they speak only for themselves and not on behalf of their organizations, in official organization publications or at official functions. For example, a church leader may endorse a particular candidate at that candidate’s press conference as long as he does not make statements in his capacity as a pastor of his church. However, a university president cannot state her personal views on a candidate at a meeting of the university board of directors, which is clearly an official organization meeting.
Nonprofit organizations may invite candidates to speak or appear at an event. Each candidate must have an equal opportunity to participate in the event, and the nonprofit should be careful not to indicate an opinion on any particular candidate or campaign. Candidates should not be permitted to raise funds at the event.
Organizations may also invite candidates to speak or appear at events in their non-candidate capacity. In these cases, the invited candidate should speak strictly within his noncandidate capacity, and should not mention or reference his candidacy. For its part, the organization should refrain from mentioning the speaker’s candidacy, and it should not allow any campaign activity or partisanship to taint the event. A candidate may choose to attend an event open to the public, such as a lecture, concert, or worship service, but the organization must take care not to politicize the candidate’s presence
Section 501(c)(3) organizations may express positions on public policy issues, even if those issues divide candidates. However, the distinction between permissible issue advocacy and impermissible political intervention can be very vague and based on a subjective, seven-factor review by the Internal Revenue Service. These factors include: identifying a candidate for public office by named political affiliation or picture; making the statement close to election day; making reference to an upcoming election or voting period; presenting the issue or statement as an issue which distinguishes candidates for a given office; making the communication as part of an ongoing series on the same issues that are independent of the election; and whether the timing of the communication was related to a non-electoral event. This area of the law can be especially difficult for nonprofit organizations, which should be extremely careful about any mention of a political candidate in the context of its issue advocacy presentations. 501(c)(3) organizations should also be mindful of the restrictions on lobbying activity.
Nonprofit business activity can constitute campaign intervention when an organization provides goods or services to one candidate and not another, to one candidate at a nonstandard rate, or to candidates and not to the general public. For example, a theater may not deny a candidate who does not support the arts access to its membership list if it provides the list to other candidates. However, if a museum rents its gallery to the general public, it does not intervene in a campaign by renting the gallery to a candidate.
Section 501(c)(3) organizations may use their websites to present information, but any posting on a website is considered a “communication” subject to the same restrictions on political campaign intervention as other forms of communication, such as printed or broadcast statements. For example, an organization may post a voter guide including nonpartisan information about each candidate with a link to their websites because the context in which the candidates’ sites are posted is neutral and treats all candidates equally. However, nonprofits should carefully monitor outside websites to which its own website links. If the linked website contains partisan material, the linking website may be engaged in campaign intervention. As a general rule, however, a website may link to a newsworthy article on a newspaper website without engaging in campaign intervention, even if other articles on that website favor a particular candidate.
Revenue Ruling 2007-41 reminds 501(c)(3) organizations that they may promote get-out-the-vote activities, invite candidates to speak, inform the electorate on issues relevant to the organization, and undertake issue advocacy in print, by broadcast, and over the Internet. However, nonprofits must take care to conduct these activities in a politically neutral manner. Activities that bias the organization in favor of or against a particular candidate run the risk of being classified by the IRS as campaign intervention. Violations of the IRS ban on campaign intervention can result in the levying of an excise tax or the revocation of an organization’s tax-exempt status.