Engaging in any political electoral campaign activity on behalf of or in opposition to a candidate for public office is a prohibited activity for all charities and private foundations that are exempt under Internal Revenue Code Section 501(c)(3). Unlike lobbying activities, where the risk of loss of exempt status is fairly remote, a single intervention in a political campaign can result in the loss of exempt status (at worst) or time consuming and embarrassing congressional inquiries or adverse publicity.

Examples of campaign activity include, but are not limited to, the following:

• endorsing a candidate for public office,
• urging the public to vote for or against a specific candidate,
• contributing money to an election campaign,
• forming or supporting a political action committee (PAC),
• providing mailing lists to candidates,
• “scoring” or “grading” candidates,
• providing campaign workers to campaigns for public office; and
• supporting political party platforms.

Each of these types of activities are often carried out in any number of ways, including online and social media sites. Activities which cannot be carried out on paper also cannot be carried out in any form of social media. Nonprofits need to keep in mind that links to political campaign sites could be viewed as a publication or distribution of a statement on behalf of or in opposition to a candidate for public office. When exempt status may be at stake, the risks should be considered carefully before providing or encouraging links to sites which may contain political campaign messages. A charity or private foundation is generally responsible for messages that appear on every landing page linked from its site.

While private foundations are prohibited from engaging in legislative lobbying, public charities can engage in some lobbying activities, and there are also a number of exceptions relevant to legislative issues that are allowed (nonpartisan analysis and research, discussions of broad social, economic and similar problems, technical advice to legislative committees and self-defense communications, and communications about administrative rules and regulations). However, in the final throes of a heated candidate campaign, reliance on lobbying exceptions may not protect a nonprofit communication that is using a code word or issue to intervene in a candidate campaign by showing support for one candidate over another.

Even the appearance of participation in a political campaign may have catastrophic results for a nonprofit. As the election season nears its climax, the wise will be vigilant in preventing any political campaign activity. When an inadvertent intervention happens, quick damage control by competent counsel is often helpful. Unless the nonprofit’s “got nothing left to lose,” the best advice until after the polls close on November 8 is to stay out of the fray. Now is a great time to remind all staff members who are able to post to your social media to resist the urge to post, tweet and link, and to get a second opinion if there’s a chance of stepping over the line.

For more information about the rules, visit the IRS website or contact any member of the Farella Braun + Martel Exempt Organization practice.