As election campaigns gain momentum, it is well for all of us to be reminded that while lobbying by nonprofits is entirely lawful, nonprofits may not engage in political activity. On page two is "Permissible Activities of 501(c)(3) Organizations During a Political Campaign," which was first issued by IS in 1980 and then reissued in 1986. It gives information regarding a number of activities that many nonprofits routinely conduct during a political campaign which are perfectly legal. Update on Permissible Activities of 501(c)(3) Organizations During a Political Campaign Some groups confuse "lobbying" with "political activity." Lobbying -- influencing the outcome of legislation by a 501(c)(3) - is lawful, even encouraged by the legislation Congress enacted in 1976 (Section 1307 of PL 94-455 Lobbying by Public Charities). Political activity -- influencing the outcome of an election by a 501(c)(3) -- is not permitted. In 1987 Congress enacted additional provisions relating to political activity by 501(c)(3)s. These provisions are discussed at greater length in the January 1988 INDEPENDENT SECTOR publication, "Tax-Exempt Organizations' Lobbying and Political Activities Accountability Act of 1987: A Guide for Volunteers and Staff of Nonprofit Organizations." None of the provisions in that publication invalidates any part of the information on permissible activities starting on page two. The provisions in the 1987 legislation are:

1. Section501(c)(3) of the Internal Revenue Code was amended to make it plain that, as has been assumed all along, political activity against a candidate, as well as on behalf of a candidate, is prohibited.
2. In addition to or in lieu of revoking the 501(c)(3) status of an organization determined to have violated the "no political activity" proviso, IRS may levy heavy fines, in the nature of excise taxes, against such organization. Fines may also be assessed against staff and/or volunteer leaders who knowingly made or agreed to political expenditures.
3. Before enactment of the 1987 amendments there could be a considerable lag between the time IRS concluded an organization was engaging in political activity, and thus no longer eligible for 501(c)(3) status, and the actual revocation of its tax exemption. The new law gives IRS authority to seek an injunction to bring to an immediate halt any violation it deems to be "flagrant." Before seeking the injunction however, IRS must notify the organization of its intent. If the notice is unheeded, IRS may then take the organization to court. In addition, IRS may immediately levy the excise taxes described above.
4. Following is information indicating permissible activities that a 501(c)(3) may carry out during a political campaign:

Permissible Activities OF 501(c)(3) Organizations During A Political Campaign The purpose of this statement is to explain briefly and in lay language what a 501(c)(3) organization can and cannot do during a political campaign. In 1954 Congress wrote into Section 501(c)(3) of the Internal Revenue Code, the section granting tax-exempt status to public charities, the proviso that the organization must: "...not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office." Congress did not elaborate on the above language, and for a number of years there has been considerable uncertainty as to just what a 501(c)(3) organization could and could not do during a campaign. Rulings by the IRS, four of them in direct response to questions asked by INDEPENDENT SECTOR, have greatly clarified the situation. Although these are private rulings (that is, technically they apply only to the organization asking the question), they are useful to other organizations of the same character inasmuch as they indicate the current position of the IRS. Background To remove any possible doubt, it should be stated at the outset that it is perfectly legitimate and highly appropriate for a 501(c)(3) organization to work for the passage of legislation that would further its cause, whether during a campaign or not, assuming of course the organization complies with other applicable statutes, especially the lobbying limitations set forth by Congress in the tax amendments of 1976. On the other hand, working for the election of a political candidate -- federal, state, or local -- is strictly prohibited and may cause the organization to lose both its tax-exempt status and its ability to assure donors that their contributions are tax deductible. Timing A basic concept underlying the IRS rulings is that it is what an organization does during a campaign that is the determining factor. In other words, what is done before or after a campaign is not a consideration, with the possible exception of an activity so timed as to deliberately circumvent the law. What, then, is "during a campaign"? Generally, a campaign for a given office is deemed to begin when someone announces either by public statement or, in the absence of a statement, by filing notice with the election commission that he or she is a candidate for that office. Electioneering Starting with the obvious, you cannot as a 501(c)(3) organization endorse, contribute to, work for, or otherwise support a candidate for public office. Conversely, it follows that neither can you oppose one. This in no way prohibits any of your officers, individual members, or employees from participating -- provided that anything they say or do is done as private citizens and not as spokespersons for your organization. If they choose to identify themselves with the organization, they must make it plain that they are speaking solely for themselves and not for the organization. If they do not identify themselves but the media does, they have done nothing wrong. Candidates' Statements It is entirely proper for your 501(c)(3) group to inform candidates of your position on issues of the day, to urge candidates to support your position if elected, and to ask them to go on record as pledging their support. In fact, getting the issues into the campaign, getting them discussed by both candidates and media before the election often proves to be a highly effective device for subsequently obtaining the legislation you favor. It is what you do with the candidates' responses that may lead to problems. First, each candidate is free to respond in any manner he or she chooses and to distribute the response not only to your organization but to the general public. On the contrary, however, you do not have the same freedom. Section 501(c)(3) itself contains the prohibition against "the publishing or distributing of statements." It is crystal clear from this that you cannot distribute a candidate's statement to the media or the general public. Ordinarily it would seem that an organization could distribute such statements at least to its own members. The law makes no such exception. (See also under "Membership Lists," below.) Of course, if the response from the candidate who ultimately wins the election is favorable, you may want to dig it up later and remind the victor of his or her promises. The same considerations apply to any statement volunteered by a candidate even if you did not ask for one. He or she may distribute it at will, but you are governed by the language of Section 501(c)(3). Questionnaires Questionnaires pose a ticklish problem. If you are a 501(c)(3) organization with a broad range of interests, such as the League of Women Voters or the United Way, you are on safe ground in issuing questionnaires to candidates and disseminating the responses. The questions must cover a wide range of subjects, be framed without bias, and be given to all candidates for a given office. On the other hand, if your organization has a relatively narrow focus -- and this includes all but a very small handful of 501(c)(3) organizations -- there could be serious problems. In the first place, framing questions without emphasizing your special interest is extremely difficult. In the second place, and probably the more compelling, the IRS has taken the position that the very narrowness of your focus implies your endorsement of those candidates whose replies are most favorable. The wisest course for the vast majority of 501(c)(3) groups would be to refrain from issuing questionnaires. For those who have already ventured into this area or may still elect to do so, at least refrain from publishing the replies. The same rationale applies when candidates are asked to respond to a position paper drawn up by the organization. The position-paper-with-response-requested is in effect an elaborate form of questionnaire. Voting Records Many organizations follow the practice of telling their members after a key vote on an issue of concern to the organization how each member of the legislature voted. This serves to show the membership how well or how poorly the proposal fared, which legislators they should thank, and which ones they still need to convince. There is no problem with this, provided the information is presented and disseminated during the campaign in the same manner as other times. Any new twists or slants to the procedure can result in a determination that the organization has engaged in improper electioneering. In presenting the results, do not say "voted for us" or equal; simply indicate whether the legislator voted for or against the particular motion on which the issue was decided. In some cases, this may require an explanation of the parliamentary significance of the motion, such as "the motion to table had the effect of killing the bill for this session." A problem does arise, however, if the organization waits until the campaign is underway to disseminate voting records. The better part of wisdom in this area is to disseminate voting records during a campaign only if it has been your practice to do so at other times. Reaching back during a campaign and publishing a recap of legislators' votes for the entire session or session to date would be unacceptable. It would be unobjectionable, however, after the election. As for distributing voting records to the public at-large, that would be unwise at any time unless you are one of the very few 501(c)(3) "broad focused" groups as described above. Public Forum There can be no objection to a 501(c)(3) organization inviting candidates to attend a meeting of the organization or a public forum sponsored by the organization and state their views on subjects of interest to the organization. Obvious even-handedness must be maintained in all aspects of promoting and holding the meeting or public forum. Avoid stating your organization's position or commenting on the candidates' responses. If there is a question period, each candidate must be given the opportunity to answer all questions put by your organization. In an open meeting, members of the general public of course are not bound by the same considerations, but the moderator for your group should do his or her best to assure balance. Of course, all bona fide candidates must be invited, and it would be best to invite them simultaneously and to use identical language in the invitations. It is not necessary that they all attend as long as all are invited. As for distributing copies of candidates' speeches or other remarks, the IRS position is that if you regularly publish a newsletter and limit its circulation generally to your own members, you may report candidates' statements as news items. All candidates must be given equal opportunity to appear, those who do must be given equal coverage, and the news stories must be presented without editorial comment. Make it plain that the views being reported are those of the candidates and that all candidates for the given office were afforded the same opportunity to participate in the forum. Membership Lists Some organizations give, sell, trade, or lend lists of their members to others. If your organization wishes to make its membership list available to candidates, there is no objection to its doing so, provided of course that all candidates are made aware of the opportunity and are given the same access. However, two other considerations enter the picture. If an organization gives or lends its membership list to a candidate, it is in effect making a campaign contribution; to avoid this, it must receive something of fair value in return. Also, before selling or renting membership lists, 501(c)(3) groups would do well to check rules on unrelated business income. Further Information The following sources of further information may be helpful:

1. Your own counsel.
2. "The Rules of the Game: An Election Year Legal Guide for Nonprofit Oorganizations" (1996), 52 pp., $20.00, Alliance for Justice, 2000 P Street, N.W., Suite 712, Washington, D.C. 20036, 202-822-6070.
3. IRS letter rulings of September 4 and October 8, 1980, to INDEPENDENT SECTOR, copies available from IS.
4. "A Layman's Guide to Lobbying Without Losing Your Tax-Exempt Status," describes opportunities for and limitations on lobbying by public charities, available from National Mental Health Association, 1800 North Kent Street, Arlington, VA 22209, at $1.00 per copy.
5. Advocacy is Sometimes An Agency's Best Service: Opportunities and Limits Within Federal Law," available from INDEPENDENT SECTOR at $2.50 per copy.
6. "Foundation Support for Voter Registration Programs," prepared by Caplin & Drysdale, One Dupont Circle, N.W., Washington, D.C. 20005. Copies available from INDEPENDENT SECTOR.
7. "Tax-Exempt Organizations' Lobbying and Political Activities Accountability Act of 1987: A Guide for Volunteers and Staff of Nonprofit Organizations." Available from INDEPENDENT SECTOR at $1.75 per copy for members/associates; $2.50 per copy for nonmembers.

The foregoing analysis is a simplified explanation of a highly complex subject. It is in no way intended as a substitute for professional legal advice.