By Pete Kennedy, CPA, CVA – Director at Cover & Rossiter, P.A.

There is a longstanding, semi-friendly feud between Naval Aviators and the other real Naval Officers who man the ships. So when, in the 2000 presidential race for the Republican nomination, Senator John McCain was giving a campaign speech with a color-guard of Naval Officers clearly visible in the background, a memorable e-mail swiftly made the rounds from a ship Captain saying “Please, dear God, let them be Aviators!”

As everyone in the military should know, appearing at a partisan political campaign event in uniform is strictly forbidden by the military equivalent to the Hatch Act. So in spite of the fact that Senator McCain is a retired Navy Captain, a decorated Vietnam veteran and the son and grandson of 4-Star Navy Admirals, having a color-guard composed of uniformed Navy personnel at a campaign event was a major violation that probably cost some poor soul their career.

501(c)(3) Organizations and Political Campaigns Don’t Mix

If there is anyone in need of guidance as to what extent a 501(c)(3) nonprofit organization can engage in a political campaign, the answer is easy – NONE! According to the IRS, a 501(c)(3) organization may not participate or intervene in any political campaign on behalf of, or in opposition to, any candidate for political office. Other types of 501(c) organizations may enter the fray on a limited basis, but not a 501(c)(3). This is an ironclad prohibition that extends to the provision of resources of any type.

In the wake of the 2004 political campaign, there were 75 individual IRS rulings that determined that a nonprofit organization had in fact inappropriately conducted political campaigning; four were determined to be so egregious that the IRS issued a “death penalty” – a notice of revocation of tax-exempt status.

A more recent example can be found in the woes of Governor Nikki Haley of South Carolina. Governor Haley’s father is a leader at the local Sikh Temple. The temple, a 501(c)(3), is being investigated by the IRS for, among other things, hosting a fundraiser for the governor and running articles in its newsletters requesting financial support from the temple members and later thanking them for that support. Both activities are textbook examples of what not to do. Based on what I’ve read, I don’t think this will end well for the temple.

Locally, while attending a Sunday Mass last year, the priest was forced to denounce the placement of partisan fliers on windshields in the parking lot during Mass as completely unauthorized and unaffiliated with the church in any way. The priest understood the importance of distancing the Church from the political activity represented by the fliers.

Individuals Affiliated With Nonprofits

As in any election year, there are strong feelings on both sides and individuals may be tempted to express their feelings for and against different political candidates. It is a free country and individuals are free to express their views, right? Well, when individuals happen to be senior management or board members of 501(c)(3) nonprofits the waters can get a bit murky. In general, individuals cannot make political statements either orally or in writing while acting or appearing to act in their “official” capacity. Whether an individual is acting in an official capacity is not as simple or obvious for nonprofit leaders as it is for military officers (that uniform is a giveaway). In order to properly distance the organization from the individual, it must be clear that the person is speaking or writing outside of their capacity as a nonprofit leader and that the nonprofit did not expend any resources in the publication of the statement or speaking forum.

The “Do’s”

Since we’ve talked about the “don’ts,” what types of politically related activities for 501(c)(3)s are acceptable?

  • Debates are often sponsored by nonprofit organizations – perfectly OK as long as invitations are not extended in a manner that exhibits favoritism. Also, the questioning cannot give the appearance of favoritism – it is one reason that the nonprofit sponsors will often have a third-party moderator from a news organization.
  • Pre-arranged public appearances at nonprofit events are fine as long as they are doled out with an even hand.
  • Making nonprofit facilities available to candidates is also permissible – again, so long as all candidates are afforded the same opportunity.
  • Voter registration events are fine as long as they do not favor one candidate or group (party).
  • “Get out the vote” call banks are also not a problem, again, so long as they do not exhibit favoritism. There were reports of instances where such call banks were either hanging up or encouraging the potential voter depending on their answer to specific questions. Not a great idea.
  • Issues-based lobbying is fine within limits. It’s important to draw a distinction between a candidate-based political campaign and issues-based lobbying. Lobbying is generally an attempt to influence the legislative process and is allowed for nonprofits within guidelines. While “Support our organization and help end poverty!” is acceptable, “We support Candidate XX who will join in our fight to end poverty!” is not OK. Nonprofits can also lobby for, or against, referenda that are voted upon in an election.

We’ve said it several times – 501(c)(3) organizations cannot participate in partisan political activities. While the prohibition is clear, there are grey areas in application. If your organization has questions regarding what is permissible, please contact Pete Kennedy, or any other member of our Nonprofit Practice team, at Cover & Rossiter at (302) 656-6632.


This article can also be found in the May 2012 edition of “GetInvolved Nonprofit Guide”. Cover & Rossiter, P.A. is one of the most respected and experienced CPA firms serving the accounting, tax and audit needs of the nonprofit community in Delaware.


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