Nonprofit Organizations face restrictions on their operating activities in order to maintain 501(c)(3) status. One of those restrictions relates to making political contributions or participating in political campaigning activities. The Internal Revenue Service (IRS) is strict about enforcing rules related to political contributions and campaigning activities and your organization could lose its tax-exempt status if it fails to follow the rules.
The Lotzar Law Firm, P.C. represents many Boards of Directors and leaders of 501(c)(3) Charitable Organizations in Maricopa County and throughout Arizona. We can provide comprehensive advice on your rights and restrictions on political activities and can assist you in other aspects of operating your organization in compliance with the law. You do not want to jeopardize your nonprofit status and should always speak with a lawyer before making decisions that could put your nonprofit organization in Maricopa County at risk.
Political Contributions and Nonprofit Organizations
Nonprofits operating as 501(c)(3) operations are forbidden from directly or indirectly participating in any type of campaigning activity. Nonprofits not only cannot donate money to political organizations or candidates, but they cannot have any involvement whatsoever in campaigning either on behalf of or in opposition to any candidate for any elective public office.
Political candidates include anyone who is running for office on the state, federal or local level. This includes not just presidential elections, but also any type of elected official including school board members; country trustees; mayors and city supervisors.
Campaign activities are also defined broadly and nonprofits are restricted in taking any type of stance on an election or even appearing to support a particular candidate. The IRS will use a “Facts And Circumstances” Test in order to assess whether your 501(c)(3) violated any of the laws related to campaign funding or participation. This involves considering both the current political situation as well as other activities done by your organization when assessing whether your actions constituted campaigning or not.
In some past cases, for example, the IRS determined that political campaigning for a candidate could include inviting a candidate to speak with the organization; or publishing materials or information about a candidate using the funds of the nonprofit organization. If the executive director or board members make any statements in their official capacity or in a way that represents the interests of the nonprofit, this too can lead to revocation of nonprofit status.
Violating the rules on campaigning or political contributions can trigger the revocation of the 501(c)(3)’s nonprofit status, so do not take any chances. If you have any questions about whether your nonprofit’s actions are within the bounds of the law, always contact the Lotzar Law Firm, P.C. for the legal advice you need to make an informed choice.
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