Q: How can our 501(c)(3) nonprofit organization avoid prohibited political campaign activity when our employees are volunteering for political campaigns and running for office?
A: A nonprofit organization that is tax-exempt under section 501(c)(3) of the Internal Revenue Code is prohibited by the Code from engaging in political campaign activity by supporting or opposing any candidate for public office at the federal, state, and local levels. A nonprofit may not, for example, contribute to a political campaign or make public statements in favor of or against a candidate. Violation of this prohibition can result in the imposition of excise taxes and the revocation of the organization’s tax-exempt status.
These prohibitions on the activities of the organization, however, do not generally apply to the activities of employees in their individual capacity, who are free to engage in political activity and may run for political office on their own time outside of work. Both the individual affiliated with a tax-exempt organization and the organization itself must observe certain precautions to ensure that this individual political activity does not cause the organization to violate IRS regulations.
Use of 501(c)(3) Resources. The use of a 501(c)(3) organization’s resources to participate in a partisan election constitutes involvement in that election. Nonprofit employees may not use the resources of the organization such as its computers, supplies, office equipment, sales tax exemption, bulk mailing privilege, mailing lists, and donor records to engage in campaign activity. Campaign meetings should not be held at the nonprofit’s facility, and political communications should not come from company telephone numbers or email addresses or include the organization’s name or logo.
Use of Employee Time. An employee’s time on the job is another resource that cannot be used to support partisan political activity, and employees must conduct this activity outside of their working hours. Candidates and campaign volunteers should not pressure other employees to become involved in a campaign or to donate their time or resources. If an employee takes a leave of absence for campaigning or requests a part-time schedule, the organization must apply its standard employment policies consistently, and may not grant special accommodations to the candidate or campaign volunteer that would not be given to other employees.
Publicity and Support. The 501(c)(3) exempt employer of a candidate for office or a campaign volunteer should take care to avoid participation in the political campaign or the appearance of supporting or opposing the candidate, and should not publicize the candidacy in its materials or on its website, encourage donations, solicit volunteers for the campaign, or provide any other publicity or support.
Attribution and Disclaimers. Individuals associated with a tax-exempt organization should always be clear that they are expressing political views and endorsing candidates in their private capacity, and should avoid giving the appearance that they are speaking or acting for the organization. If the name of the organization must be used for identification purposes, the individual should include a disclaimer that the name of the nonprofit is shown for identification purposes only, and that no endorsement or statement by the organization is implied.
As it can be a challenge to maintain the separation between private and organizational political activity, nonprofit organizations should consider adopting a policy regarding employee political activity to provide guidance to its employees and affiliates. Samples of these policies are available online from a number of nonprofit organizations, or you may choose to reach out to your legal counsel for assistance.
Know the Law is a bi-weekly column sponsored by McLane Middleton. Questions and ideas for future columns should be emailed to knowthelaw@mclane.com. Know the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for guidance specific to your particular situation.