May 2010 Public Law Bulletin POLITICAL AND LOBBYING ACTIVITIES AND 501(C)(3) ORGANIZATIONS Political activities and legislative judicial, or administrative bodies, i.e. Measuring Lobbying Activity: activities are two different things and are rule making. Expenditure Test subject to two different sets of rules. The Organizations other than churches and An organization will be regarded as rules depend on: private foundations may elect the attempting to influence legislation if: expenditure test under section 501(h) 1. the type of tax-exempt 1. it contacts, or urges the as an alternative method for measuring organization, public to contact, members or lobbying activity . Under the 2. the type of activity (political employees of a legislative body expenditure test, the extent of an or legislative) at issue, for the purpose of proposing, organization’s lobbying activity will not supporting, or opposing 3. the scope or amount of the jeopardize its tax-exempt status, legislation , or activity conducted, and provided its expenditures, related to 2. if the organization advocates such activity, do not normally exceed an 4. the consequences of the adoption or rejection of amount specified in section 4911. This exceeding the given set of legislation . limit is generally based upon the size of limitations. the organization and may not exceed Organizations may, however, involve Lobbying Activity $1,000,000. themselves in issues of public policy In general, no organization may qualify without the activity being considered as Political Campaign Activity for section 501(c)(3) status if a lobbying. For example, organizations Under the Internal Revenue Code, all substantial part of its activities is may conduct educational meetings, section 501(c)(3) organizations are attempting to influence legislation prepare and distribute educational absolutely prohibited from directly or (commonly known as lobbying). A materials, or otherwise consider public indirectly participating in, or 501(c)(3) organization may engage in policy issues in an educational manner intervening in, any political campaign some lobbying, but too much lobbying without jeopardizing their tax-exempt on behalf of (or in opposition to) any activity risks loss of tax-exempt status. status . candidate for elective public office. Legislation includes action by: Contributions to political campaign Measuring Lobbying Activity: 1. Congress, any state funds or public statements of position Substantial Part Test legislature, any local council, or (verbal or written) made on behalf of Whether an organization’s attempts to similar governing body, with the organization in favor of or in influence legislation constitute a respect to acts, bills, opposition to any candidate for public substantial part of its overall activities is resolutions, or similar items office clearly violate the prohibition determined on the basis of all the (such as legislative confirmation against political campaign activity. pertinent facts and circumstances in of appointive office), each case. The IRS considers a variety Certain activities or expenditures may 2. or by the public in of factors, including the time devoted not be prohibited depending on the facts referendum, ballot initiative, (by both compensated and volunteer and circumstances. For example, certain workers) and the expenditures devoted constitutional amendment, or voter education activities (including the by the organization to the activity , similar procedure . presentation of public forums and the when determining whether the lobbying publication of voter education guides) It does not include actions by executive, activity is substantial. conducted in a non-partisan manner do
PUBLIC LAW Bulletin May 2010 not constitute prohibited political opportunity to the political nonpartisan panel, campaign activity. candidates seeking the same 2. whether the topics discussed office, In addition, other activities intended to by the candidates cover a broad encourage people to participate in the 2. it does not indicate any range of issues that the electoral process, such as voter support of or opposition to the candidates would address if registration and get-out-the-vote drives, candidate (this should be elected to the office sought and would not constitute prohibited political stated explicitly when the are of interest to the public, campaign activity if conducted in a non- candidate is introduced and in 3. whether each candidate is partisan manner. On the other hand, communications concerning the given an equal opportunity to voter education or registration activities candidate’s attendance.), and present his or her views on the with evidence of bias that: (a) would 3. no political fundraising issues discussed, favor one candidate over another; (b) occurs. 4. whether the candidates are oppose a candidate in some manner; or asked to agree or disagree with (c) have the effect of favoring a Equal Opportunity to positions, agendas, platforms or candidate or group of candidates, will Participate statements of the organization, constitute prohibited participation or In determining whether candidates are and intervention. given an equal opportunity to 5. whether a moderator participate, an organization should Individual Activity by comments on the questions or consider the nature of the event to Organization Leaders otherwise implies approval or which each candidate is invited, in The political campaign activity disapproval of the candidates. addition to the manner of presentation. prohibition is not intended to restrict For example, an organization that Speaking as a Non-Candidate: free expression on political matters by invites one candidate to speak at its well leaders of organizations speaking for An organization may invite political attended annual banquet, but invites the themselves, as individuals. Nor are candidates to speak in a non-candidate opposing candidate to speak at a sparsely leaders prohibited from speaking about capacity. For instance, a political attended general meeting, will likely be important issues of public policy. candidate may be a public figure because found to have violated the political However, for their organizations to he or she: (a) currently holds, or campaign prohibition, even if the remain tax-exempt under section formerly held, public office; (b) is manner of presentation for both speakers 501(c)(3), leaders cannot make considered an expert in a non-political is otherwise neutral. partisan comments in official field; or (c) is a celebrity or has led a organization publications or at official Depending on the facts and distinguished military, legal, or public functions . circumstances, an organization may service career. When a candidate is invite political candidates to speak at its invited to speak at an event in a non- To avoid potential attribution of their events without jeopardizing its tax- candidate capacity, it is not necessary for comments outside of organization exempt status. Political candidates may the organization to provide equal access functions and publications, organization be invited in their capacity as to all political candidates. leaders who speak or write in their candidates, or individually (not as a individual capacity are encouraged to However, the organization must ensure candidate). clearly indicate that their comments are that: personal and not intended to represent 1. the individual speaks only in Public Forum the views of the organization. a non-candidate capacity, Sometimes an organization invites several candidates to speak at a public Inviting a Candidate to Speak 2. neither the individual nor forum. A public forum involving several any representative of the Depending on the facts and candidates for public office may qualify organization makes any mention circumstances, an organization may as an exempt educational activity. of his or her candidacy or the invite political candidates to speak at its However, if the forum is operated to election, and events without jeopardizing its tax- show a bias for or against any candidate, exempt status. Political candidates may 3. no campaign activity occurs then the forum would be a prohibited be invited in their capacity as in connection with the campaign activity, as it would be candidates, or individually (not as a candidate’s attendance. considered intervention or participation candidate). In addition, the organization should in a political campaign. clearly indicate the capacity in which Speaking as a Candidate When an organization invites several the candidate is appearing and should When a candidate is invited to speak at candidates to speak at a forum, it should not mention the individual’s political an organization event as a political consider the following factors: candidacy or the upcoming election in candidate, the organization must take 1. whether questions for the the communications announcing the steps to ensure that: candidate are prepared and candidate’s attendance at the event. 1. it provides an equal presented by an independent
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