Religion and politics

Nonprofits should not endorse political candidates

It’s a big election year, and if you’re the leader of a house of worship, religious charity or other nonprofit, you may have strong opinions about specific candidates. Certainly, churches, charities and nonprofits have a big role in the political process and have been part of many great movements in American life. However, to maintain your status as a tax-exempt non-profit, your organization cannot publicly support any one candidate or political party.

According to section 501 (c)(3) of the Internal Revenue Code, an organization is exempt from taxation if “no substantial part of the activities … is carrying on propaganda, or otherwise attempting to influence legislation … and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for the public office.”

Your organization (and you, as a leader speaking on behalf of the organization) is free to take a stance on issues that may arise during a political campaign, such as immigration, abortion and police funding. But you must separate the issues from the people. If you appear to endorse a particular candidate, you could leave yourself vulnerable to a tax audit.

The Johnson Amendment

The above portion of section 501 (c)(3) of the Internal Revenue Code is called the Johnson Amendment. It is named for then-Senator and future President Lyndon B. Johnson of Texas, who introduced it in a preliminary draft of the law in 1954. Since then, there have been very few court cases that relate to the Johnson Amendment—and of those few, the court almost always ruled in favor of the Internal Revenue Service.

So, how do you know what you can or can’t do? Here’s a primer:

• While you can’t support a candidate as an organization, you can do so as an individual. For example, if a family member is running for office, you can campaign for him or her through your private social media accounts. However, if you live on a property owned by your house of worship or charity, be wary of displaying political signs in your yard.
• You are permitted to engage in a small amount of lobbying—but only for causes, not for people.
• While you can’t support specific candidates, you can engage in positive political action, such as voter registration, candidate forums and questionnaires, member education and visits by elected officials—but only when the officials’ opponents are also invited to speak.
• Your organization is strictly prohibited from contributing to a candidate’s campaign.
• You may decide to form a 501 (c)(4) “social welfare” organization, under which you can contribute to campaigns (your contributions are not deductible) and engage in unlimited lobbying.

At Church Mutual, we have an experienced team of insurance experts that stays on top of the latest legislative developments. You can learn more by contacting your Church Mutual representative or calling customer service at (800) 554-2642.