As elections are near, it is important for 501(c)(3) organizations to remember that they must adhere to numerous rules if they choose to engage in non-partisan activities. Developing an internal policy for staff to reference during election season can help to ensure that your 501(c)(3) organization maintains its tax-exempt status. Although a 501(c)(3) organization’s exempt purpose may be political in nature, by law, none of its staff time or resources may be used for partisan political activities or purposes (i.e., to support or oppose a political party or candidate running for public office). Even a suspected violation of this law can result in costly investigations and may even cause the loss of such organization’s tax-exempt status. In addition to losing its tax-exempt status, the 501(c)(3) organization may be subject to severe excise taxes on spending deemed to be political expenditures. Consequently, it is crucial that each 501(c)(3) organization provide clear guidance to its governing body, staff, volunteers, and any other individuals who work for the organization.
Below are some of the more common political activities a 501(c)(3) organization should avoid:
Determining whether a violation has occurred is on a case-by-case basis and is very fact-specific. Also, there are several non-partisan activities a 501(c)(3) organization is allowed to engage in. For example, a 501(c)(3) organization may engage in any of the following activities:
Lastly, although the 501(c)(3) organization may not engage in partisan political activities, it is important to remember that individuals who work for the 501(c)(3) are not prohibited from supporting or opposing candidates in their personal capacity separate from the organization, so long as they do not use 501(c)(3) resources. However, each organization should have detailed specific policies and procedures established to clearly distinguish between activities individuals undertake in the name of the organization and activities individuals take separate from the organization.
For a sample 501(c)(3) election policy, check out:
https://bolderadvocacy.org/wp-content/uploads/2022/01/Sample-Election-Season-Policy.pdf.
Additionally, if you would like more information on navigating the permissible activities a 501(c)(3) may conduct during an election year, please contact the Burton Law firm at: 916.822.8700 or email info@lawburton.com.
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California has required employers to “indemnify” employees for “necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer” in substantially the same terms since 1937 under Labor Code § 2802.
