Federal Electioneering Rules

Charities are strictly prohibited under Federal Law from engaging in electioneering. Electioneering is participating or intervening in any political campaign on behalf of, or in opposition to, any candidate for public office. Charities cannot endorse any candidates, make donations to their campaigns, engage in fund raising, distribute statements, or become involved in any other activities that may be beneficial to or detrimental to any candidate for public office.

Charities must operate in non-partisan mode. Charities must be aware that engaging in prohibited campaign activity could result in excise taxes imposed on the money spent electioneering; loss of tax-exempt status, and more severe penalties for flagrant violations. Contributions to charities that lose their tax exempt status are not deductible by the donors for federal income tax purposes.

The IRS recognizes that voter education and issue advocacy (lobbying)are important charitable services. Charities are permitted and encouraged to educate the public on genuine issues related to charitable mission. However, electioneering is primarily about the candidate rather than the issue.

Generally permitted activities like voters guides, candidate forums and literature distributions, could be prohibited electioneering. Legitimate issue advocacy could become electioneering if the facts of the case demonstrates bias. However, certain activities by charities, such as contributing money to a political campaign, are clear violations of Federal law.

US Supreme Court Overturns Campaign Finance Law; Permits Corporate Contributions.

1/21/10 Following a rare rehearing of a Federal Campaign Finance case, (Citizens United v. Federal Election Commission) the US Supreme Court ruled 5-to-4 that government may not ban political spending by corporations in candidate elections. This decision is based on First Amendment free speech and applies to corporations, labor unions and other organizations. The decision has been criticized as representing a sharp doctrinal shift that will allow corporate and special interest money to flood the political marketplace and corrupt democracy.

Citizens United is a conservative nonprofit corporation that released its documentary "Hillary: The Movie," a 90-minute documentary about Hillary Clinton during the 2008 Democratic presidential primaries in which she was a candidate. Later that year, the Federal Election Commission won its court battle to prohibit the broadcast of the film. BTW- you can still watch the film on DVD and the Internet.

Those of you who have been advocating with me since I started at PANO will remember the black-out periods and the Wisconsin Right to Life case argued under the Bipartisan Campaign Reform Act of 2002 (BCRA), a.k.a. McCain-Feingold. That´s where the FEC regulation prohibiting organizations from broadcasting "electioneering communications" 30 days before of a presidential primary or 60 days before the general election. Since 2007, this law applied to communications "susceptible to no reasonable interpretation other than as an appeal to vote for or against a specific candidate." Organizations also had to include disclaimers (even on a 30 second trailer) and disclose the names of its contributors. The Citizens United case seemed destined for obscurity until this past September when the Court decided to rehear the case to address the more important issue of restrictions on corporate spending to support or oppose Federal political candidates.

Note: While some nonprofits such as 501(c)(4)´s, 501(c)(5)´s, and 501(c)(6)´s, will be able to do more because of the court´s relaxation of election laws, but this decision does not affect the tax laws that still prohibit 501(c)(3) charitable nonprofit organizations from engaging in political campaigns for or against individual candidates.

So what did the Citizens United decision change? By removing the prohibition on corporations seeking to finance independent, electoral advertising without using political action committees funded by employees, the Supreme Court invalidated McCain-Feingold´s ban on corporate electioneering advertising within 60 days of a general election or 30 days of a primary. Corporate contributions (direct or in-kind) to candidates, parties, or PACs are still banned. However, the judgment was affirmed with respect to the BCRA´s disclaimer and disclosure requirements. Therefore, corporations are now free to pay for ads that are "genuine issue advocacy" as defined under the prior case FEC v. Wisconsin Right to Life (6/25/07) so long as they disclose it.