With every big election, there is the relentless ask for campaign contributions. Are these contributions deductible? The answer is "no." Whether you give money to a political campaign, political party, or political action committee, the amount is never tax deductible and need not be reported to the IRS.
There is only one way a political-related donation can ever be deductible: by making it to a public charity, that engages in political-related activities. Public charities, also called 501(c)(3) organizations, are nonprofits formed for charitable, religious, or educational purposes. Public charities include groups such as churches, schools, nonprofit hospitals, and food banks. However, they also include nonprofits whose mission is to educate the public on political and policy issues. Examples include the American Enterprise Institute, whose mission is to "expand liberty and strengthen free enterprise," and the Natural Resources Defense Council, an environmental action group.
Donations to 501(c)(3) organizations are tax deductible. The nonprofit should give you a letter confirming the gift and the amount. Such donations need not be reported to the IRS unless the gift is 2% of total contributions or $5,000, whichever is greater.
However, public charities may only play a limited nonpartisan role in elections. They are flatly prohibited from intervening in political campaigns in any manner whatsoever, whether by endorsing or opposing candidates for public office, mobilizing supporters to help elect or defeat candidates, or giving money to political campaigns or political parties. This prohibition applies to all political campaigns for elective office, including those at the federal, state, and local level, and even includes elections in foreign countries. A nonprofit that violates these rules can lose its tax exemption.
Public charities can engage in four types of election-related activities, if done in a nonpartisan way.
Helping people vote: A public charity may work to help people vote. This includes voter education activities and voter registration and get-out-the-vote drives. For example, it can offer rides to the polls, canvas the neighborhood, and hand out voter information, or call voters about the election. However, it can’t engage in any of these activities in a way that favors or opposes any candidate for office.
Sponsoring candidate appearances: Public charities may also in invite political candidates to speak at events they sponsor. However, the nonprofit must ensure that:
- an equal opportunity to other candidates seeking the same office
- the nonprofit does not voice any support for or opposition to the candidate, and
- no political fundraising occurs.
Voter guides: A public charity may prepare and distribute voter guides to help voters compare candidates’ positions on issues. Such guides must be neutral in form and content and cover a broad range of issues.
Issue advocacy: Public charities can take positions on public policy issues, including those that divide the candidates in an election. For example, a nonprofit may advocate for the abolition of the death penalty by issuing publications, sponsoring public forums on the issue, or sending out mailings. However, public charities cannot engage in any issue advocacy that functions as political campaign activity.
By giving money to a public charity that engages in these activities, you can help it perform its mission and get a tax deduction.