Charitable organizations, such as think tanks, which work on the border between education and politics, may have tax-exempt status under 501(c)(3) of the Internal Revenue Code (IRC). Those organizations must comply with specific rules on political campaigning to maintain their tax-exempt status. 501(c)(3) organizations can engage in educational activities related to politics without running afoul of these rules. However, when education treads closely to a call to action, it may be considered lobbying or campaigning. As the distinction between permissible and impermissible activities can be very ambiguous, charitable organizations should take proactive steps to familiarize themselves with the applicable rules and exceptions to safeguard their tax-exempt status under federal law.
Political Campaigning
Charitable organizations, including think tanks, do not qualify as 501(c)(3) organizations if they are so-called “action organizations” under 26 C.F.R. é 1.501(c)(3)-1(c)(3)(iii). Organizations are action organizations if they participate or intervene, directly or indirectly, in any political campaign on behalf of or in opposition to any candidate for public office. Political campaign activities include making or distributing written statements or issuing oral statements on behalf of or in opposition to a candidate for public office.
However, there are some nonpartisan activities related to political campaigns in which charitable organizations, as well as think tanks, can participate without jeopardizing their tax-exempt status, including the following:
- Conducting nonpartisan voter education activities not referring to a particular candidate, such as voter registration drives not confined to the geographical area covered by the campaign or offering transportation to the polls on Election Day without regard to one’s political affiliation;
- Distributing nonpartisan educational voter materials, such as compiling voter records by legislators on multiple major issues, soliciting statements from all candidates equally on certain issues, or hosting speeches by candidates if available to all candidates with equal time to speak on multiple topics presented in a nonpartisan manner, even if some decline the invitation;
- Posting or distributing nonpartisan voter guides with links to other nonpartisan educational voter sites;
- Allowing current public officials who are running for office to appear at organizational events in their official capacities, so long as no political campaigning or fundraising occurs, their candidacy is not mentioned, and they are chosen to speak in their official capacities for reasons other than their candidacy for office.
Explicit and Implicit Political Campaigning
Defining allowable and prohibited political campaigning activities is not as straightforward as it might initially seem. It is far more complicated to determine whether statements from a charitable organization, such as a think tank, or its representative might implicitly cross the line into partisan political advocacy. Even statements that might not explicitly ask the public to vote for a certain candidate may implicitly support that candidate in some circumstances. For instance, an organizational statement might delve into the forbidden territory of political campaigning if it expresses approval or disapproval of the position or actions of a candidate, mentions voting, or raises an issue that candidates are debating. Any organizational statements must discuss issues that are in furtherance of the organization’s exempt purpose, with no overt indication that the organization supports or opposes a particular candidate to remain nonpartisan and permissible.
Charitable Organization Business Activities
Some business activities of charitable organizations might appear to be involved in prohibited political campaigning activities if available to one candidate and not others. Therefore, if charitable organizations make mailing lists or office space available for rental to one candidate, they should make them equally available to all candidates in the election. The organizations or think tanks also offer the same rates for their goods and services to all candidates.
Officers, Directors, and Employees of Charitable Organizations
The officers, directors, and employees of charitable organizations are free to engage in political campaigning on their own time. However, they must be cautious about doing so only in their individual capacities and not use any organizational resources to support their activities. They also should make clear that they are acting individually and not on behalf of their organization or think tank in their political campaigning activities.
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