On this episode we are joined by Erin Bradrick, a principal at Neo Law Group, to delve into the complexities of tax law and its implications for nonprofit organizations during election seasons. Our discussion focuses on the distinctions between 501(c)(3) and 501(c)(4) organizations, the specific rules governing their political activities, and the strategies nonprofits can employ to navigate these regulations while effectively advocating for their causes to ensure compliance without sacrificing impact.

 

Lawyers for this episode

• Sarah Efthymiou
• Tim Mooney
• Erin Bradrick, NeoLaw Group

 

Shownotes

• 501(c)(3)s vs. 501(c)(4)s
• Election Activities and Enforcement
• Nonpartisan Election Activities
  • Voter engagement activities (registration, get-out-the-vote)
  • Issue advocacy, voter education, and candidate education
  • Commenting on sitting elected officials in their official capacity
• Challenges in Current Political Climate
• Fiscal Sponsorships
• Practical Advice for Nonprofits

 

Resources

• AFJ’s Nonprofit Voter Assistance Series
• AFJ’s The Connection
• AFJ’s The Rules of the Game
• National Council of Nonprofit’s on Fiscal Sponsorship

 

On this episode, we’ll discuss the basics of federal election law, including what it regulates, and which tax-exempt organizations need to be aware of it. We’ll also review recent FEC opinions that allow for interesting pre- and post-election activities for non-501(c)(3) organizations involving federal candidates.

Attorneys for this episode

• Quyen Tu
• Susan Finkle-Sourlis
• Tim Mooney

Shownotes

1. Federal Election Law Basics:

·          • Overview of federal campaign finance regulations

·          • Role of the Federal Elections Commission (FEC)

·          • Differences between federal and state campaign finance laws

2. Key Regulations:

·          • Source prohibitions and contribution limits

·          • Types of source prohibitions (e.g., corporations, foreign nationals)

·          • Contribution limits and exceptions for PACs and Super PACs

3. In-Kind Contributions and Coordinated Activities:

·          • Definition and examples of in-kind contributions

·          • Coordination with candidates and the implications

4. Recent FEC Opinions and Rulings:

·          • Door-to-door canvassing coordination

·          • Internet exception for unpaid communications

5. Ballot Initiatives and Federal Candidates:

·          • Federal candidates’ involvement in state and local ballot measures

·          • Recent advisory opinions from the FEC

6. Post-Election Activities:

·          • Ballot curing coordination with federal candidates

·          • Compliance requirements and legal considerations

Resources

• Rules of the Game

• The Connection (newly updated)

• Blog post on coordinating canvassing (AFJ Action)

On this edition we chat with Nonprofit Vote Executive Director Brian Miller about the organization’s efforts to expand nonpartisan voter engagement, the fascinating findings in its latest Nonprofit Power Report, and the challenges and strategies for a successful nonpartisan campaign.

On this episode

Tim Mooney

Quyen Tu

Special Guest – Brian Miller, Executive Director, Nonprofit Vote

 

·       Introduction

·       About Nonprofit Vote

·       National organization providing resources and training to help nonprofits engage communities in voting and elections.

·       Resources include guides on staying nonpartisan, running voter registration drives, and understanding relevant regulations.

·       Why Nonprofit Voter Engagement Matters

·       Fosters an inclusive democracy by narrowing gaps in voter participation along lines of race, income, and age.

·       Nonprofits serve as secondary actors with motivations to ensure their communities have a voice in democracy, unlike political campaigns that focus on likely voters.

·       The Nonprofit Power Report

·       Updated version analyzed voter data from nonprofits in eight states during the last midterm election.

·       Key Findings:

·       Nonprofit-engaged voters were more likely to be low income, younger, and voters of color.

·       Nonprofit engagement boosted voter turnout by 10 percentage points on average.

·       Higher turnout rates were observed for voters of color (+12%), young voters (+14%), and low-income voters (+15%).

 

·       Challenges and Solutions in Voter Engagement

·       Common barriers include perceptions of partisanship and lack of resources.

·       Importance of understanding legal boundaries to overcome partisanship concerns.

·       Philanthropy for Voter Engagement Initiative partners with foundations to provide resources and support for voter engagement.

·       Strategies for Effective Voter Engagement

·       Reverse door-knocking for organizations with high foot traffic (e.g., food pantries, community health centers).

·       Incorporating voter engagement into community outreach for issue-focused groups (e.g., environmental organizations).

·       Leveraging trusted relationships and human interaction alongside technology (e.g., online voter registration).

·       Role of Technology and AI

·       Online voter registration and the importance of balancing technology with human interaction.

·       Ensuring accessibility and reliability of information, especially with the rise of AI-generated misinformation.

·       Encouraging use of trusted sources like .gov addresses for accurate information.

·       Engaging Underrepresented Communities

·       Importance of working through existing nonprofits with cultural competency.

·       Ensuring accessibility in communications and polling locations for people with disabilities.

·       Examples of best practices and collaborations with organizations like the National Disability Rights Network.

·       Resources

·       Nonprofit Vote’s website

·       Nonprofit Power Report

·       AFJ’s Nonprofit Voter Assistance Series

·       AFJ’s The Connection

·       AFJ’s The Rules of the Game

 

On this episode, we will discuss how nonprofits can respond when they are asked to share their resources with others. Whether it’s data, a mailing list, office space, or something else of value, your nonprofit needs to know what to do when asked to share its assets with other people and groups. And guess what! Your organization’s tax status will come into play. If you’re a 501(c)(3), you need to be particularly careful, especially when interacting with non-(c)(3)s. We’ll dive in deep and answer the question “Can We Rent (or Share) That?” in the minutes to come.

 

Our Attorneys for This Episode:

Monika Graham

Natalie Ossenfort

Victor Rivera

 

General Principles when sharing resources and working with other organizations:

·      Principle #1: Moving resources from a 501(c)(4) to a 501(c)(3) is simpler from a legal standpoint than the reverse (uphill / downhill principle).

·      Principle #2: Your tax-exempt status follows you into your transactions with others.

·      Principle #3: Documentation is important.

·      Principle #4: Stay in your lane.

 

What does this have to do with renting and exchanging resources?

·      501(c)(3)s are prohibited from supporting or opposing candidates, including making contributions to candidates and political organizations.

·      501(c)(3)s should not provide resources to a 527 without charge. Instead, they should rent or sell these types of assets for fair market value and make them equally available to any other political entities that request them.

o   Best practice is to use a list broker.

·      When supporting the work of (c)(4)s, which can engage in some partisan political activity, 501(c)(3)s must be mindful to protect their assets and to ensure that they aren’t giving away their lists, data, and spaces for partisan political use for free and that any rental transactions are well documented and comply with the law.

 

Can our (c)(3) rent out event space to candidates and other types of organizations?

·      Whether something constitutes impermissible support or opposition of candidate depends on the facts and circumstances. Some things the IRS considers in the event space rental context include (Rev. Rul. 2007-41):

o   Whether the facility is available to all candidates in the same election on an equal basis,

o   Whether the fees charged to candidates are at the organization’s customary and usual rates,

o   Whether the activity is an ongoing activity of the organization or whether it is conducted only for a particular candidate, and more!

·      Discussion of two examples.

 

What about newsletter ad space?

·      If a 501(c)(3) rents / sells ad space in its newsletter or other publications, it can offer that same service to others (even candidates), but it must charge fair market value and allow all entities and candidates the same access without regard to political preferences.

o   Remember to indicate which ads are “paid advertising” in the publication.

·      If it usually gives out ad space for free (instead of requiring a financial transaction), it could potentially do the same with other organizations, but all free content must be nonpartisan.

·      What if a (c)(4) has a newsletter and wants to provide ad space to a (c)(3)?

o   It’s easier for (c)(4)’s to share resources with (c)(3)s since (c)(4)s can do everything (c)(3)s can do, and more!

o   A 501(c)(4) could rent space to the (c)(3) for fair market value or give it away for free.

 

Voter Registration Files

·      501(c)(3)s should not freely share with partisan organizations the voter registration lists or other data that it collects during voter registration or education activities.

·      This information is a valuable asset owned by the 501(c)(3). Voter registration files may only be rented to a 501(c)(4) or 527 at fair market value or exchanged for data of equal value. Even then, the circumstances in which these agreements can be made are complex, so it’s wise to get legal advice.

·      This type of agreement can also cause opposing parties or groups to raise their eyebrows and question the legality of the transaction. Before engaging in this type of transaction, figure out how much risk your organization is willing to incur.

 

501(c)(3)s can’t give things away for free to non (c)(3)s that could potentially use the (c)(3)’s assets for partisan political purposes. So, if you’re thinking about sharing your organization’s resources with others, exercise caution and consult with counsel when needed.

 

Resources:[NO1] 

 

Rules of the Game

Election Checklist for 501(c)(3) Public Charities

The Connection

Coalition Checklist

Rev. Rul. 2007-41

Monika, can you add a resource link to that revenue ruling you cited in the event space discussion? [NO1]