Section 501(c)(3) nonprofits are 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. If you violate these rules, your nonprofit (or its managers) may have to pay excise taxes and you risk losing your tax-exempt status—not something any nonprofit wants to take a chance with.
Quite simply, a Section 501(c)(3) nonprofit may not engage in any activity that favors or opposes a candidate for elective public office. This includes:
Despite these harsh sounding rules, nonprofits can play a nonpartisan role in elections. They are allowed to educate voters about important issues, and can register voters and urge them to vote, as long as everything is done in a nonpartisan manner. Only then is it not considered a political campaign activity. Lastly, nonprofit lobbying is legal, with some guidelines.
Provided you do it in a nonpartisan, unbiased manner, your nonprofit may engage in voter education activities and voter registration and get-out-the-vote drives. For example, a nonprofit group can offer rides to the polls, canvass the neighborhood, and hand out voter information, or call voters about the election. However, you can’t engage in any of these activities if you do them in a way that favors or opposes any candidate for office.
You may decide to invite political candidates to speak at events sponsored by your nonprofit, either in their capacity as a candidate or in their individual capacity. In either event, you’ll need to make sure you do it properly or you will run into problems with political campaigning.
If you invite a candidate to speak at one of your events as a political candidate--that is, to solicit votes--you must ensure that:
Voter guides are pamphlets or documents that are created to help voters compare candidates’ positions on issues. Nonprofits are allowed to prepare, distribute, and otherwise help with voter guides, as long as the guide is neutral in form and content and covers a broad range of issues. If a voter guide focuses on a single or narrow range of issues, or if the questions or information reflect bias, then it would violate the prohibition against political campaign activity for the nonprofit to be involved in the preparation, distribution, or some other way with the voter guide.
If the IRS finds that your organization violated the prohibition on political campaign activity, you could be required to pay a special excise tax equal to 10% of each prohibited political expenditure. Your nonprofit’s managers could also be personally liable for a tax equal to 2.5% of each expenditure (up to a ceiling of $5,000) if they agreed to the expenditure even though they knew it was prohibited. Your organization could also have its tax-exempt status revoked.