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Permissible and Impermissible Activities of Non-Profit Organizations and Public Charities Permissible and Impermissible
Activities of Non-Profit
Organizations and Public Charities
Under Federal Campaign Finance
and Tax Laws
Jay A. Sekulow, Esq., Chief Counsel
Colby M. May, Esq., Director, Washington Office
James M. Henderson, Esq., Senior Counsel

February 4, 2004
201 Maryland Avenue, N.E.
Washington, D.C. 20002
(202) 546-8890 American Center for Law and Justice
201 Maryland Avenue, N.E.
Washington, D.C. 20002
(202)546-8890
page 2
I. Special Guidance to Public Charities Tax-Exempt Under Section 501(c)(3)
The following is an overview of the permissible activities and events all public charities, churches
and synagogues may participate in which are not regarded as campaign activity in violation of Internal
Revenue Code section 501(c)(3):
Permissible Voter Registration Drives and Get Out The Vote Efforts
Voter registration and get-out-the-vote drives will not be considered as "participating or intervening
in a political campaign" so long as activities are conducted in a neutral, unbiased and nonpartisan manner.
See, Internal Revenue Manual, Section 7.25.3.7.11.5 (February 23, 1999); Election Year Issues,
Kindell and Reilly, Internal Revenue Service, Exempt Organizations Continuing Education Technical
Instructional Program for Fiscal Year 2002 ("Election Year Issues"). The determination of whether
the drive is conducted in a neutral, unbiased and nonpartisan manner is based upon compliance with the
following factors:
C
no candidate or all candidates for a particular elective office are named or depicted without
favoring any candidate over any other in the voter registration or get-out-the-vote
communication(s);
C
the communication names no political party, except for identifying the political party
affiliation of all candidates named or depicted;
C
the communication is limited to urging acts such as voting and registering to vote and to
describing the hours and place of registration and voting; and
C
the voter registration and get-out-the-vote drive services are made available without regard
to the voters' political preference.
Care must be taken to follow the above guidelines. The IRS has ruled that voter registration
materials which referred to a "conservative" agenda and offered specific examples of "liberal" groups and American Center for Law and Justice
201 Maryland Avenue, N.E.
Washington, D.C. 20002
(202)546-8890
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politicians posing threats to that agenda, violated the political prohibition even though the registration
materials did not refer to any conservative candidate by name. Tax Advice Memorandum 9117001.
Coordinating registration activities with a political committee must also be avoided, and would be a violation
of the political intervention prohibition. Id. Focusing registration efforts on particular geographical areas,
however, does not constitute participation or intervention even if it is known that the area contains
predominantly supporters of a particular party or candidate. Id. Also, voter registration lists may be used
to identify unregistered voters, but no targeting of voters who are registered as belonging to one party or
another should be used. Election Year Issues at 379.
Permissible Voter Guides
Public charities, churches and synagogues may also prepare and distribute voter guides which
include all viable candidates for an office, within certain guidelines which must be strictly followed. As with
voter registration and get-out-the-vote activities, voter guides must also be neutral, unbiased and
nonpartisan, and under no circumstances may it endorse a candidate or direct individuals to vote for or
against a candidate. Voter guides should not contain editorial comments about any political party aimed
at inducing voters in any particular way.
The specific guidelines are found in IRS Revenue Ruling 78-248, as amplified in Revenue Ruling
80-282, and provide that voter guides must include:
C
the voting records of all incumbent members of the legislative body who represent the local
area;
C
the candidates for reelection will not be identified as incumbents;
C
no comment may be made on an individual's overall qualifications for office;
C
no statement may be made expressly or impliedly endorsing or rejecting any incumbent or
other candidate for public office may be made;
C
the voting report should not be linked to any election campaign by, for example, widely American Center for Law and Justice
201 Maryland Avenue, N.E.
Washington, D.C. 20002
(202)546-8890
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distributing the voter report on the eve of an election; and
C
the voting report should cover a broad range of issues and not target issues that track the
organization's known "agenda."
Public charities, churches and synagogues must also stay away from rating candidates. The IRS'
position is that rating candidates is the equivalent of endorsing candidates and clearly violates the political
intervention ban. Association of the Bar of the City of New York v. Commissioner, 858 F.2d 876 (2
nd
Cir. 1988); General Counsel Memorandum 39441 (November 7, 1985); Tax Advice Memorandum
963503 (conference of citizens that issued a rating of candidates based on their positions on issues violated
the political prohibition).
Candidate Forums and Debates
Public charities, churches and synagogues may sponsor candidate forums or debates. The
fundamental requirement is that candidate forums or debates educate voters and not simply assert the
virtues of particular candidates. The standards applicable to voter guides noted above also apply to
candidate forums. In addition, IRS Revenue Ruling 86-95 sets forth the following criteria for a candidate
forum that educates voters without also engaging in prohibited campaign activities:
C
the forum includes "all legally qualified candidates;"
C
covers a broad range of issues;
C
poses questions presented by "a non-partisan, independent panel of knowledgeable
persons;"
C
gives each candidate an equal opportunity to present his or her views; and
C
the moderator states at the beginning and end of the program that the views expressed are
those of the candidates and not of the organization and that sponsorship of the forum does
not constitute an endorsement of any candidate by the organization. American Center for Law and Justice
201 Maryland Avenue, N.E.
Washington, D.C. 20002
(202)546-8890
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A broad range of issues for this purpose is not limited to any particular number. The IRS has held
that a forum that covered just three issues, each of which was an important topic in the campaign, was still
neutral. Tax Advice Memorandum 9635003. Also, limiting a forum or debate in a primary election to
the candidates of one party does not violate the political prohibition. The sponsoring organization does not
jeopardize its exempt status by excluding a third party candidate from the two debates among, respectively,
the Democratic party candidate and a Republican party candidate. Fulani v. League of Women Voters,
684 F. Supp. 1185 (S.D.N.Y. 1988), affirmed, 882 F.2d 621 (2
nd
Cir. 1989). However, limiting debate
participants to only "significant" candidates in a party primary is impermissible, and is considered a
subjective factor. Fulani v. Brady, 809 F. Supp. 1112 (S.D.N.Y. 1993).
A Minister, Priests or Rabbi, Etc., May Individually Endorse a Political Candidate
Religious leaders are not prohibited from speaking as individuals and endorsing a candidate for
political office, or speaking out on a matter of public policy. However, because churches and synagogues,
as institutions, are not permitted to intervene in political campaigns, whenever a religious leader individually
endorses or supports a political candidate it must be done in a way that does not make it appear as if the
church or synagogue is endorsing the candidate. This means the religious leader may not use the letterhead
or publications of the church or synagogue when an individual endorsement is made. Also, no endorsement
may be made during an official church or synagogue function. However, a minister, priest, or rabbi, etc.,
may be identified in their individual endorsements by the title or position they hold. IRS Publication 1828,
pp. 7-8.
Public Charities, Churches and Synagogues Need Not Restrict
Their Discussion of Issues During Campaign Seasons
The political intervention prohibition does not restrict the discussion or presentation of issues during
a campaign season. Public charities, churches and synagogues need not limit or alter their discussion of
issues during such times, and the fact that candidates may align themselves on one side or another of an American Center for Law and Justice
201 Maryland Avenue, N.E.
Washington, D.C. 20002
(202)546-8890
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issue does not adversely affect the right to engage in discussion or presentations of the issue. Election Year
Issues, at 334-346.
Public Charities, Churches and Synagogues May Participate in Referendums,
Constitutional Amendments and Ballot Propositions and Initiatives
Referendums, constitutional amendments, ballot propositions and voter initiatives are classified as
lobbying activities. Tres. Reg. § 1.501(c)(3)-1(c)(3)(ii). Public charities, churches and synagogues are
permitted to engage in an insubstantial amount of lobbying activity. 26 U.S.C. §501(c)(3). While neither
the IRC or IRS regulations define what insubstantial means in terms of any specific percentages, court
rulings indicate between five and fifteen percent (5%-15%) of total activities would be insubstantial. See,
Haswell v. U.S., 500 F2d 1133 (Ct. Cl. 1974)(16% to 20% of total budget was too much); Seasongood
v. Commissioner, 227 F2d 907 (6
th
Cir. 1955)(l