[EL] 501(c)(3) political activity (Was: CCP Emergency SCOTUS relief)

[BZall at aol.com]

Yikes! No, no, no. Misleading at best; more likely a misunderstanding of  
the limits of 501(c)(3) "political" activity and a conflation of lobbying and 
 election-related activity. Here is the Alliance for Justice's 501(c)(3) 
election  checklist, which is accurate and much more detailed: 
http://bolderadvocacy.org/wp-content/uploads/2012/05/Election_Checklist_for_501c3_Public_Cha
rities.pdf. 
 
The first paragraph of Prof. Schultz's post is correct, depending on  the 
definition of "some types of 'political' [my quotes] activity." It would be  
more accurate to say that 501(c)(3)s' ISSUE-ORIENTED activity need not stop  
during election periods. Fed. Election  Comm’n v. Wisconsin Right To Life, 
Inc., 551 U.S. 449, 474 (2007)  (“Discussion of issues cannot be suppressed 
simply because the issues may also  be pertinent in an election.”).  
 
The concept is known informally as "injecting an issue into a campaign" and 
 is widely recognized. See, e.g., the IRS's internal training manual 
("CPE") for  FY 2002: http://www.irs.gov/pub/irs-tege/eotopici02.pdf,  at pp. 
344-346:
 
Basically, a finding of campaign intervention in an  issue advertisement 
requires more than just a positive or negative  correspondence between an 
organization's position and a candidate's position.  What is required is that 
there must be some reasonably overt indication in the  communication to the 
reader, viewer, or listener that the organization supports  or opposes a 
particular candidate (or slate of candidates) in an election;  rather than being 
a message restricted to an issue. As is stated in TAM  1999-07-021 (May 20, 
1998), in order to violate the political campaign  prohibition, an advocacy 
communication "should contain some relatively clear  directive that enables 
the recipient to know the organization's position on a  specific candidate 
or slate of candidates." This statement was made in the  context of a 
determination that an organization did not participate or intervene  in a political 
campaign when, a few days before Congressional elections, it  distributed 
an "I'm Fed Up With Congress" communication that also encouraged its  
recipients to vote and to assure that others voted. 
Id. at 345-46. Note: this is not the same as the FEC's "express  advocacy" 
standard. 
 
The second paragraph is confused and wrong. There is no de  minimis test 
for political activity by 501(c)(3) organizations, much less a  "substantial 
part" test. From the Internal Revenue Manual (the IRS's description  of 
policies and procedures):  
4.76.3.13   (04-01-2003) 

Political Activities  Guidelines 
There  is an absolute prohibition on all IRC § 501(c)(3) organizations from 
 participating or intervening in any political campaign. Even an 
insubstantial  amount of political activity can lead to the revocation of the 
organization’s  exempt status.
 
More to the point, courts have repeatedly rejected this analysis: 
 
 In United States v. Dykema, 666 F.2d 1096, 1101  (7th Cir. 1981), the 
Seventh Circuit stated: "It should be noted that exemption  is lost . . . by 
participation in any political campaign on behalf of any  candidate for public 
office. It need not form a substantial part of the  organization's 
activities." The Second Circuit agreed with this position when it  held that an 
organization did not qualify as an IRC 501(c)(3) organization  because it rated 
judicial candidates as a very minor part of its total  activities. 
Association of the Bar of the City of New York v. Commissioner, 858  F.2d 876 (2d Cir. 
1988), cert. denied, 490 U.S. 1030 (1989). The court rejected  the 
organization's contention that the substantiality requirement from the  lobbying 
activity limitations be applied to the political campaign activity  
prohibition. Citing United States v. Naftalin, 441 U.S. 768, 773 (1979), the  court 
stated: "The short answer [to this argument] is that Congress did not  write 
the statute that way." Id. at 881. The court noted that the IRC 501(c)(3)  
prohibition against participation or intervention in political campaigns was  
added some twenty years after the statutory restriction on lobbying. 
Therefore,  the court concluded: "Had Congress intended the added exception to apply 
only to  those organizations that devote a substantial part of their 
activity to  participation in political campaigns, it easily could have said so. 
It did not."  Id. at 881. 
 
2002 CPE, supra, at p. 352. 
 
As the IRS CPE excerpt shows, the lobbying test is quite different, and  
shouldn't be combined with the political analysis. 501(c)(3)s CAN lobby, but  
only to a limited extent, determined by whether the organization elects the  
"mechanical test" of IRC sections 501(h)/4911 or uses the "default",  
non-electing test. 
 
While Prof. Schultz may be well-meaning and his beliefs  heartfelt, his 
description is not accurate. His statement that  "those of us who are not naive 
suspect ..." is, therefore, itself suspect. 
 
Barnaby  Zall
Of Counsel
Weinberg, Jacobs & Tolani, LLP
10411 Motor City  Drive, Suite 500
Bethesda, MD 20817
301-231-6943 (direct  dial)
bzall at aol.com  

 
In a message dated 5/16/2015 8:29:36 A.M. Eastern Daylight Time,  
dschultz at hamline.edu writes:

501 c 3 are barred from engaging in partisan politics but they are not  
prevented in toto from engaging in some types of political advocacy or  
activity either at the state or federal level.


501 c 3 groups are allowed to do a certain amount of political advocacy  or 
lobbying so long as these activities are not a substantial part of the  
organization.  The nature and amount of these activities are determined  by law 
or IRS rules and often these groups elect  for  the expenditure test under 
501 (h) to address any uncertainty in  determining what is a substantial 
part.




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