Election season brings about debates among candidates, pontifications about potential policy changes, and – for charities – a few potential traps for the unwary. There are certain activities related to election season that are permitted for charities, others that are permitted within certain limits, and still others that are prohibited altogether.

These restrictions, which have been around for more than six decades, exist to prevent subsidy of partisan political activity. With the 2024 presidential election fast approaching, nonprofit board members and the charities they serve should be aware of these limitations.

Permitted Activities

Voter Education

Charities are permitted to engage in activities related to voter education. This may include presentation of public forums or debates, provided that it is done in a manner that does not show preference for or against a particular candidate. For example, the debate’s moderator should give each candidate reasonable amounts of airtime and should ensure questioning procedures are not biased. Voter education also may include publication of voter education guides if they are carried out in a nonpartisan manner.

Get Out the Vote

Charities also are permitted to participate in “Get Out the Vote” efforts, provided certain rules are met:

• These efforts must be intended to increase overall voter participation.
• These efforts may not be used as a way to register voters who are believed to support a certain candidate or political party.

To comply with these rules, charities engaged in “Get Out the Vote” efforts should not reference any political party or specific candidate. They must make voter registration available to everyone – not just certain demographic groups believed to be more supportive of the charity’s mission.

Focus on Issues

Charities may advocate for or against issues that are in the political arena, even if those issues are considered politically divisive.

Permitted Within Limits

Lobbying

Charities are permitted to engage in lobbying, within certain limitations. Lobbying is an attempt to influence legislation. There may be other activities that we generally think of as lobbying but are not prohibited under the rules.

Activities that “attempt to influence” include making, or urging the public to make, direct contact with a member of a legislative body for the purpose of taking sides on legislation. “Legislation” includes actions by Congress, state legislatures, or local councils, as well as actions by the public in referendum or on a ballot initiative. It does not include executive, judicial, or administrative action.

Lobbying is permitted within limits. The limitations relate to time and money spent by the charity on lobbying activities. Generally, a charity is safe if it meets the “substantial part” test or the “expenditure” test.

• The “substantial part” test: To meet the substantial part test, lobbying must not comprise a substantial portion of the charity’s overall activities. While the IRS has not provided explicit guidance on what level of activity is deemed insubstantial, a charity that spends less than 5% of its time and effort is generally considered safe.
• The “expenditure” test: Under the expenditure test, the charity may spend more on lobbying than is permissible under the substantial part test. A charity wishing to meet the expenditure test must make an election on its tax return. Electing charities are subject to a sliding scale based on overall budget and may spend up to 20% of their budgets on lobbying, up to $1 million.

Prohibited Activities

Political Campaign Activities

Charities may not participate in a political campaign on behalf of or in opposition to any candidate for public office. This might include making written or oral statements, including on the charity’s website through links to a candidate’s website, creating visibility for one candidate or political party, and providing favorable business terms for one candidate or political party.

The determination as to whether any particular activity is prohibited is based on the facts and circumstances around that activity. Charities should be mindful of these restrictions and seek counsel when appropriate.

Special Considerations for Board Members

The restrictions discussed apply to charities and, to the extent they are representing a charity, to the charity’s board members. However, the restrictions do not apply to leaders of a charity who are acting in their individual capacity. To ensure their activity is not attributed to the organization, the board members should not make partisan comments in the charity’s publications or at its events. They also should exercise caution regarding how their affiliation with a charity is represented.

Final Thoughts

Charities and nonprofit board members understand that certain candidates support policy that furthers their mission. Other candidates may support policy that is detrimental to their mission. While it is understandable for a charity to prefer one candidate over another, the charity and its board members must be careful not to run afoul of the restrictions against political activity.

Through our Philanthropic Advisory practice, Brown Brothers Harriman advises nonprofit clients and board members on issues relating to governance and compliance. We would be happy to speak with you if you have any questions on this topic.