Nonprofit Law updates from Cullinane Law Group. July 2012.
Cullinane Law Group

Can Nonprofits Be Involved in Elections? 

As the presidential election approaches, nonprofits should be aware of how they and their employees can participate in presidential, statewide, and local elections. 

IRS restrictions on tax-exempt organizations.

The IRS prohibits 501(c)(3) organizations from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. This means that 501(c)(3) organizations cannot endorse candidates, donate money or resources to candidates, or rate candidates based on how they feel about issues affecting the nonprofit. If your organization violates this prohibition, it could lose its tax-exempt status and may be subject to certain excise taxes.

What can we do?
The IRS allows 501(c)(3) entities to participate in nonpartisan activities to encourage voter participation, like

  • Voter registration – Promoting and encouraging voter registration is allowed as long as parties or candidates are not endorsed or opposed.

  • Voter education – Organizations can provide information on how and where to vote and can offer nonpartisan voter guides. They cannot state their position on issues with candidates.

  • Candidate engagement – Candidates can be invited to events and forums, and to participate in questionnaires, but all candidates must be invited.

  • Mobilizing individuals to vote – Groups can encourage and enable people to vote, so long as the group is only endorsing the act of voting, not candidates.

Read more... about what nonprofit employees can do and how to deal with social media and election issues.

photo of Mollie Cullinane
Mollie Cullinane
The Cullinane Law Group serves the nonprofit sector.

We set up and maintain strong and legally compliant nonprofits that have solid bases for long-term success.

We provide risk management and offer practical solutions for sound governance.

We work with nonprofits, foundations, religious organizations, and social entrepreneurs throughout the United States who seek to create positive change.

Based in Austin, Texas.

Clients nationwide

Client Highlight
Allied Advocates Foundation is new 501(c)(3) tax-exempt nonprofit organization founded by Texas attorneys to help Texas families.

This October 2012, the Foundation will host a sporting clay tournament to raise funds for Returning Heroes Home, a nonprofit that helps wounded warriors and their families during the rehabilitation process at Ft. Sam Houston in San Antonio. Returning Heroes Home offers a place of healing for those returning with injuries sustained in Iraq and Afghansistan.

Mollie Cullinane has been honored to work with Allied Advocates Foundation on its set-up and legal formation. We thank them for their commitment to Returning Heroes Home.

Law Basics
What is a fiscal sponsor?
A fiscal sponsor is a tax-exempt organization that agrees to shares its tax-exempt status with another group for a specific project, grant, or event. The fiscal sponsor accepts financial donations on behalf of the sponsored group and then provides those donations to the sponsored group, less an administration fee.

Fiscal sponsorships can be useful in mobilizing grassroots efforts and in helping start-up and emerging nonprofits get the momentum they need to become independent organizations, but there are many factors to consider before entering into a fiscal sponsorship. Read more.

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