Political Support and Activity Questions

Q1: What political activity is prohibited by tax-exempt status?

A: 501(c)(3) tax-exempt organizations are prohibited from influencing legislation and Political Campaign Interventions.

The real question for religious organizations is: “What limitations on political activity are imposed on 501(c)(3) organizations?” Organizations recognized for exemption under 501(c)(3) not only are tax exempt as organizations, but also afford their donors tax relief due to charitable deductions. The rules on political activity are meant to prevent individuals from obtaining a tax deduction for money contributed toward political activities.

What a religious organization may not do:

1. Influence legislation
2. Political Campaign Interventions

What a religious organization may do:

1. Allow its members, employees, directors and officers to participate in political activities as individuals, provided they do not speak for the organization.
2. Take a position on an issue that is a matter of public policy and debate, so long as the “issue” is not merely an indirect way of endorsing a particular candidate.

The rules on political activity are meant to prevent individuals from obtaining a tax deduction for money contributed toward political activities.

Q2: How should a church or ministry respond to requests from political groups and candidates for support?

A: Churches should be careful not to jeopardize their 501(c)(3) tax-exempt status through political activity.

In recent years, churches have become increasingly aware of restrictions on political activity imposed on 501(c)(3) tax-exempt organizations.

Since 1954, the federal tax law has prohibited 501(c)(3) exempt organizations, including churches and ministries, from intervening in any political campaign. However, some tax law specialists also say there are circumstances in which such organizations may participate in nonpartisan educational activities even if they relate to a political campaign.

Distinctions in the Tax Code
The tax code makes a distinction between ““political campaign activity” and “influencing” legislation. In general, the tax code allows 501(c)(3) organizations to engage in a limited amount of lobbying activity, so long as such activity is not “substantial” and includes issue advocacy that does not support or oppose any candidate.

How to Navigate
Here are some suggestions to help keep your ministry on track and out of trouble:

• Keep all lessons, sermons, announcements, or other messages that you communicate during your church’s activities focused on a biblical or spiritual issue. You can address issues like abortion, euthanasia, moral conduct, or fiscal stewardship, for example, as issues that the Bible addresses or are addressed in your ministry’s doctrines or practices.
• Avoid mentioning any candidate, political candidate, or specific legislation by name. Stick to the issue and avoid the partisanship.
• Be careful not to distribute any literature from other organizations unless you are sure that it is “permitted speech” under the tax code. If you have doubts, seek the advice of a local attorney before distributing the literature.
• Be careful when a member of your church runs for public office. The rules limiting lobbying and prohibiting campaigning apply at all government levels and to all candidates. Make sure that your church’s actions cannot be construed as supporting your member’s candidacy rather than simply encouraging and supporting your member as an individual.

*Important information: Brotherhood Mutual is pleased to provide Legal Assist as a complimentary resource. The services we offer through Legal Assist are intended to provide general legal information to our current and prospective policyholders.

The information we provide is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. Accordingly, no attorney/client relationship is created through this process, and no legal advice will be provided. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.

 

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