06 Jun Myth Buster Monday: Can churches and other non-profit entities be engaged in political activities without violating tax-exempt laws?
“Churches can’t be involved in anything political!” is a continual refrain from those who oppose religious and traditional values. Below is an example of what we’re talking about. This was taken from a comment section on a gay blog where the theme of a thread was to rail against a church that was involved in thwarting the effort to put in place same-sex marriage in Rhode Island.
“Want to get them where it hurts. This church is certainly a non-profit organization. They don’t have to pay taxes; they use your money to rally against you. Rally against them at your local IRS Office. In my 68 years of gay life I have never seen, read or heard anything about any of my sisters/brothers lodging complaints with the IRS against a non-profit organization. I don’t get it. We let bigots like this organization throw us to the ground, stamp on us and are expected to get up and say oh well we tried. Oh no, my sisters and brothers you have not tried until you picket outside the IRS, write Washington IRS and PROTEST. Someone in Right America is making big nontaxable bucks. I looked at their speaking engagements. Every church that supports Right America should have their tax exemption status looked at and denied. THINK ABOUT IT! Don’t get kicked down and stay down – hit where it hurts, after all that is what they are doing to you and they certain understand an eye for an eye.”
We included this entire quote because it is so revealing of the attitude shared by not a few people.
But is this person right?
No. The reason “In my 68 years of gay life I have never seen, read or heard anything about any of my sisters/brothers lodging complaints with the IRS against a non-profit organization” is that non-profit organizations – which churches are – CAN be engaged in politics.
Here’s what non-profit organizations (501c3 is the technical designation) can do:
1. A religious organization is allowed to hold general voter education or registration activities as long as the organization does not show a preference to an individual candidate and/or political party.
2. A religious organization is prohibited from campaigning in any way for or against an individual candidate or political party.
3. A religious organization is prohibited from donating funds to a candidate or political party.
4. Pastors, rabbis and other religious leaders can endorse a candidate or political party as an individual but not as a representative of their religious entity. Endorsements cannot be made at an official gathering or organizational publication.
5. A religious organization can publicize and distribute voting records of politicians provided the compilation doesn’t contain editorial comment or indication of approval or disapproval.
6. The organization is allowed to play a minor role in campaigning, lobbying or other efforts involved in trying to get certain legislation passed.
Non-profits – churches included – can engaged in campaigning and lobbying for particular legislation (not a candidate) based on a percentage of the entire amount of donations they receive. Many experts consider that to be between 5-10 percent. If a non-profit takes in large amounts of donations, they can actually have quite a bit of latitude in engaging in the above listed political activities.
Many non-profit organizations set up companion organizations which hold a 501c4 designation for their more overt and partisan political activities. Donations to a 501c4, however, are not tax deductible. For example Focus on the Family is a 501c3. Focus on the Family Action is a 501c4. While Planned Parenthood has Planned Parenthood Action Fund which is a 501c4.
Don’t be fooled when people tell you that your religious voice has no place in the public square and that your church is breaking the law when it engages in the political process. They simply don’t know the rules!