2016 is a national election year, in which Americans will choose their political leaders at every level of elected government. Churches and non-profit organizations have much to say on the issues being debated and have a First Amendment right to have their views heard. The Internal Revenue Code has prohibitions against campaign activity for or against political candidates. This article reviews the state of the law and the current IRS practices.
As a first matter, Churches and non-profits have an absolute First Amendment right to speak out on political issues and for or against candidates, however and wherever they choose, restricted only by laws of general applicability. There is nothing “illegal” about a pastor standing in the pulpit and telling the congregation to vote for this candidate or against that ballot initiative.
However, these organizations are granted exemption from taxes on their income, and their donors can take deductions against taxable income for the contributions made. This very favored status is granted by Section 501(c)(3) of the Internal Revenue Code, and that section has two prohibitions that concern the political activities of a non-profit organization:
No “substantial part” of its activities may be to influence legislation (commonly referred to as lobbying); and
It “does not participate in, or intervene in (including publishing or distributing statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”
The second restriction does not have the “substantial part” language as does the first – it is an absolute bar. The restriction, however, is only against a participation for or against “any candidate” and so the bar is candidate specific, not issue specific.
A Church or non-profit that violates either of the rules against substantial activity to influence legislation or the absolute bar against supporting candidates could jeopardize its tax-exempt status. In other words, the decision to abide by these rules is not a legal decision, but an economic one.
The best and most detailed pronouncement of the law is IRS Publication 1828, Tax Guide for Churches and Religious Organizations. It explains where IRS draws the lines, and specifically details those activities that do not jeopardize a church’s tax-exempt status.
Section 501(c)(3) prohibits religious organizations from engaging in “substantial” efforts to influence legislation. Publication 1828 tells us that,
“A church or religious organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.”
According to Publication 1828, activities that would not be considered attempts to influence legislation include conducting nonpartisan educational meetings, preparing and distributing nonpartisan educational materials, or the consideration of public policy issues in a nonpartisan educational manner.
Also, the Church or non-profit can participate in influencing legislation, so long as it activities are not “substantial” compared with its work or ministry as a whole. This is determined on a case by case basis considering a variety of factors, including the time devoted (by both compensated and volunteer workers) and the expenditures (finances) devoted by the organization to the activity, when determining whether the lobbying activity is substantial.
Political Campaign Activities
All section 501(c)(3) organizations are absolutely prohibited from participating in any political campaign on behalf of, or in opposition to, any candidate for elective public office. Financial contributions to political campaign funds and public statements, verbal or written, whether made in favor of or opposition to any candidate are a violation of this prohibition.
IRS Publication 1828 also acknowledges that the “political campaign activity prohibition is not intended to restrict free expression on political matters by leaders of church or religious organizations speaking for themselves, as individuals.” This becomes very much a matter of where and how statements are made.
- Political speech and endorsing a candidate
Religious leaders cannot make comments favoring or opposing candidates in official church publications or at official church functions; but they can if they make clear that the comments are personal and do not represent the views of the church; and do not make them in the context of formal church proceedings.
- Inviting a political candidate to speak
Many churches invite political candidates to address the congregation during a church service. The church may certainly extend that invitation, but in doing so should abide by a few general rules in order to avoid political campaign intervention.
- If the church extends an invitation to speak to one political candidate, it must also extend an invitation to the other candidates running for the same office.
- The church cannot indicate any support for or opposition to the candidate.
- Under no circumstances should there occur any political fundraising.
- At all times, the church must maintain a nonpartisan atmosphere on the premises or at the event where the candidate is present.
- The church must clearly indicate the capacity in which the candidate is appearing, and not make any mention of the individual’s political candidacy or the upcoming election in the communications announcing the candidate’s attendance at the event.
- Hosting political events
A church may invite several candidates to speak at a forum, but should remember the following guidelines:
- The questions for the candidates should be prepared and presented by an independent nonpartisan moderator, who should not approve or disapprove of any candidate’s position.
- The topics discussed by the candidates can focus on issues particularly important to the congregation, but should also cover issues of general interest to the public.
- Each candidate should be given an equal opportunity to present his or her views on issues discussed.
- Candidates should not be asked whether or not they agree or disagree with positions, agendas, platforms, or statements of the church of non-profit organization.
- Voter education guides
During election years, many churches and non-profits distribute voter guides. These voter guides generally provide information on how all candidates stand with various issues. Any voter guides prepared or distributed by a church should abide by the following rules:
- The voter guides must not compare the candidates’ positions on political topics to that of the church.
- The voter guides should include a broad range of issues that the candidates would address if elected to political office, not just one issue that is of particular interest to the church and its members.
- The description of the political issues must be neutral.
- All candidates (and their views) running for a particular office should be included.
- The descriptions of a candidate’s position should either be his or her own words in response to questions, or a neutral, unbiased and complete compilation of all candidates’ positions.
Practical Considerations and IRS History
The IRS has been permissive in what it has allowed churches to do in the political arena. This seems to be a combination of (i) respect for Constitutional rights; (ii) the inability to effectively police and enforce the rules; and (iii) the strong public favor of churches over the IRS. Over the past twenty years, there has only been one church and a few religious non-profits that have lost their 501(c)(3) status, and those were cases of very blatant and very public violations, and even then, rescission occurred only after those entities ignored IRS warnings.
There is no question that in an election year, religious organizations can speak out on the issues, and their voices are an important part of the national discourse. At the same time, churches and religious non-profits must respect and honor the laws, both for the potential economic consequences and as a testimony to their faith.