Tag Archive: Advocacy

Aug 28 2012

Are some non-profits allowed to electioneer? Feds say yes

Non-profit leeway.

At first you want to raise all sorts of questions and when you witness a non-profit blatantly electioneering you might have a sudden urge to call the IRS and scream bloody murder, but the truth is 501c4’s have a little more leeway in terms of supporting candidates than you may think.

Social welfare nonprofits, known as 501(c)(4)’s, are allowed to electioneer as long as electioneering is not their sole purpose.

Created a century ago by Congress, 501(c)(4) nonprofits were mandated that in order to receive the tax exemption, groups were supposed to be “operated exclusively for the promotion of social welfare.”

Eventually the IRS opened the flood gates to some forms of political activity by interpreting the statute to mean groups had to be “primarily” engaged in enhancing social welfare. According to the IRS , “Organizations exempt under IRC 501(c)(4) may engage in germane lobbying activities without the restrictions imposed on IRC 501(c)(3) organizations.”

“Germane lobbying activities” appears to be the litmus test. It’s rather ambiguous and neither the tax code nor regulators established how this would actually be measured.

So, bottom line, can a 501c4 non-profit groups endorse a candidate for office? According to IRS Rev. Rul. 81-95, 1981-1 C.B. 332, “even if the organization conducted activities involving participation and intervention in political campaigns on behalf of or in opposition to candidates for nomination or election to public office, since the organization’s primary activities promoted social welfare, its lawful participation or intervention in political campaigns on behalf of or in opposition to candidates for public office would not adversely affect its exempt status under IRC 501(c)(4).”

Inevitably questions arise about the scope of advocacy, legislative, and common political activities permitted under the rules of a 501c4. But so it seems, a 501C4 can be vocal in supporting a candidate in an official capacity just as long as they don’t do it year round.



Permanent link to this article: https://queens-politics.com/2012/08/are-some-non-profits-allowed-to-electioneer-feds-say-yes-501c4/

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