Advocacy Efforts In Presidential Cycles? Don’t Jeopardize Your IRS Status

Presidential years mean higher ad rates, saturated email lists and a whole lot of attention not paid to your advocacy group’s messaging. It’s painful competing with a campaign for commander-in-chief over resources, manpower and attention.

In this environment, advocacy strategists often become frustrated and indecisive. Or worse, they could overstep their legal bounds and jeopardize their organization’s IRS status. 

You don’t have to sideline your grassroots efforts during the presidential cycle. There are ways to seize these moments to further your program. If you’re running a 501(c)(3) or 501(c)(4) this cycle, here are some ways you can further your program while keeping your IRS status intact. 

First, make sure you fully understand the difference between C3s and C4s. 501(c)(3) organizations are public charities, private foundations, or groups with open membership. They can host educational and nonpartisan public forums and produce voter education guides. They can also host a voter registration drive, but they are much more limited in what they are able to do when compared to 501(c)(4) organizations. 

C4 organizations are civic leagues, social welfare groups, and local associations of employees that primarily promote the common good in the community. They can make expenditures electioneering, endorse or oppose political candidates, or donate money or time to political campaigns. 

Understand that C3s can’t contribute to campaign funds or help solicit funds. They can’t make public statements supporting or opposing a candidate, or directly or indirectly participate in any political campaign. There are significant consequences for crossing these lines. 

Engaging in prohibited activities may result in denial or revocation of tax-exempt status or in the imposition of certain excise taxes. It also has the potential to alienate or fragment your membership so you must be especially mindful of damaging your donor database.

One recent example of a nonprofit’s political activity being called into question involves a C4 organization. According to The Center for Responsive Politics, “A social welfare group called Carolina Rising spent 97 percent of the money it raised in the 2014 midterm elections — nearly $5 million — running ads that helped Sen. Thom Tillis (R-N.C.) defeat the incumbent Democrat that cycle.”

The two issues are 1) that the organization spent the majority of their funds on political activity 2) the organization privately benefited an individual as opposed to promoting social welfare of the community. It's just one example of where nonprofits have crossed the line into political territory where exclusions exist. 

So long as your organization takes care in its approach, there are indirect benefits of election cycles such as this one that can help both C3s and C4s. Presidential elections typically usher in new technology and grassroots organizing tools that can later be applied in the advocacy space. And as the field gets whittled down, there could also be hiring opportunities for C3s and C4s.

Presidential elections provide valuable experience to people in high-level grassroots organizing. When the campaign is over, your advocacy organization should be taking a close look at former staffers who are searching for full-time employment. 

Joshua Habursky is the senior manager of grassroots advocacy at the American Diabetes Association and adjunct faculty member of the Reed College of Media at West Virginia University.