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Political Campaign Activity by Non-profit Organizations – Part 2



We previously discussed the prohibition against a church or religious organization from participating in political campaign activities.  The specific prohibitions that are a part of the law were discussed.  However, a church or religious organization is not being placed in a situation where is cannot express opinions on the issues of the day, nor are they expected to “put its head in the sand” in regard to the political process.

Lobbying Activities

A church or religious organization is permitted to engage in lobbying activities.  These activities are limited, however, as the organization must maintain a focus on its exempt purpose.  If the IRS determines that the organization is devoting more than an “insubstantial” part of its total activities during the year to lobbying activities, its tax-exempt status would be in jeopardy. Referenda, constitutional amendments, and similar ballot initiatives are considered lobbying activities by the IRS, and are therefore permissible if they remain under “insubstantial.”

Clergy and Religious Leaders as Individuals

Political campaign activities may be carried on by leaders of religious organizations or churches as invididuals, assuming that the activity is carried on outside of the context of any religious organization or church.  If, however, the activity is undertaken during worship services or other organization-sponsored functions, posted on organization websites or printed in official organization publications, the activity will be attributed to the church or organization and not the individual activities of the leader.

Candidates Speaking at an Organization Function

Candidates for office frequently appear as speakers at worship or other services of churches or religious organizations.  This is permissible if:

1. All candidates for a particular office are given equal opportunity to speak to the organization,

2. No collection is taken for any candidate, and

3. There are no demonstrations of approval or disapproval of any candidate.

Candidates for office frequently may be experts on certain subjects (we certainly hope so).  If a candidate has been invited to speak on matters of expertise and does not showcase his or her candidacy, no violation has occurred. Any advertising of the event may not mention the upcoming election of the speaker’s candidacy.  Likewise, a candidate may be a member of a particular church or religious organization.  Performing his or her regular duties as a leader is not a violation.

Voting Guides, Candidate Forums, Other Activities

Part 1 of this article mentioned that voting guides published by a candidate, a political party, or a Political Action Committee (PAC), may not be distributed by the church or religious organization.  However, the organization may publish and distribute legislators’ voting records for the purpose of educating voters. This publication must not include editorial comment or approval or disapproval of any member’s voting record.  Also there are restrictions on identifying candidates for re-election, comparing their voting record with positions of other candidates or of the religious organization, and the circumstances surrounding the distribution of the voting record.

Candidate forums are permitted as long as they are considered unbiased forums or debates for the purpose of aiding voter education.  The organization may not indicates its views on the issues under discussion, nor indicate approval or disapproval of any candidate.  Obviously, all qualified candidates should be invited to the forum and questions should be presented by an independent panel covering a broad range of issues.

A religious organization may conduct voter registration and get-out-the-vote drives that are not biased toward any candidate, political party, or voting position.  They cannot be associated with any political party and may not target a particular political party.

Revenues from Political Activity

There are several avenues of potential revenue for a church or religious organization in this arena.  The facilities of the organization may be rented for civic or political events.  Churches may serve as polling places during the election and they may provide facilities to candidates or political parties.  However, the facilities must be offered to all on an equal basis.

An organization may sell political advertising in its publications provided that it is accepted on the same basis as nonpolitical advertising, is identified as a political advertisement, and is available on an equal basis to all candidates.  The same rules apply to the church selling its mailing list to candidates, political parties, or PACs.  So long as it is done on an equal basis, it is permissible.

Consequences

If a church or religious organization is found to be in violation of the laws in regard to political campaign participation, the organization risks having its 501(c)(3) status revoked. This means that the organization’s income for the year would be subject to income tax and contributions to the organization would not be tax deductible.  In some cases an additional excise tax may be imposed on the organization.  These measures, however are extreme and normally not applied for unintentional, small infractions when the organization takes steps to assure that it would not occur in the future.

The first two parts of this series have dealt with the laws in regard to political campaign activity by churches and other religious organizations, outlining what can and cannot be done.  Many feel that these organizations should have more freedom in regard to political activity, while other groups would restrict this freedom more severely.

In Part 3, we will examine these extreme views.

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Dr. John Stancil (My Bald CPA) is Professor Emeritus of Accounting and Tax at Florida Southern College in Lakeland, FL. He is a CPA, CMA, and CFM and passed all exams on the first attempt. He holds a DBA from the University of Memphis and the MBA from the University of Georgia. He has maintained a CPA practice since 1979 with an emphasis in taxation. His areas of expertise include church and clergy tax issues and the foreign earned income credit. He prepares all types of returns, individual and business.

Dr. Stancil has written for the Polk County Business Journal and has presented a number of papers at academic conferences. He wrote the Instructor’s Manual for the 13th edition of Horngren’s Cost Accounting. He is published in the Global Sustainability as a Business Imperative, Green Issues and Debates, The Encyclopedia of Business in Today’s World, The Palmetto Business Review, The CPA Journal, and in the NATP TaxPro Journal. His paper, “Building Sustainability into the Tax Code” was recognized as the outstanding accounting paper at the annual meeting of the South East InfORMS. He wrote a book entitled “Tax Issues Faced by U. S. Missionary Personnel Abroad ” that will soon be published.

He has recently launched a new endeavor, Church Tax Solutions, which presents online, on demand seminars on various church and clergy tax issues.

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One thought on “Political Campaign Activity by Non-profit Organizations – Part 2

  1. Avatar Dorle733 says:

    In Canada, anything that even faintly reeks of political lobbying, is “hands-off” if you want to keep your charitable status. Furthermore, a non-profit organization must spend all funds, except 20%, on mandated activities.

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