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2017 Issue 3 | Download as a PDF


Filing a Declaration of Candidacy Should Not Silence Nonprofits


Filing a Declaration of Candidacy Should Not Silence Nonprofits

Donald Trump’s recent filing of a declaration of candidacy for 2020 with the Federal Election Commission (“FEC”) has raised questions in the community of exempt organizations. Many 501(c)(3) organizations are now concerned that their policy advocacy, both lobbying and non-lobbying in nature, may now be considered prohibited political activity. However, this filing should not change the analysis that would otherwise apply under the tax law, which is a separate legal regime from the campaign finance laws administered by the FEC.
The basic rule is unchanged. 501(c)(3) organizations are prohibited from conducting activities in support of or in opposition to any candidate for elected public office. This prohibition includes both direct and indirect support; while 501(c)(3)s must avoid explicitly endorsing or opposing candidates for office, activities that do not expressly urge a vote for or against a candidate must also be analyzed with care.
The IRS defines a candidate as someone who “offers himself or is proposed by others” for elected office. This is a different standard from that applied by the FEC. The filing Mr. Trump made on his first day in office pertains to ongoing fundraising for a campaign committee. The fact of this filing does not change the tax rules.
In general, 501(c)(3) communications criticizing an office holder’s policy positions in his/her capacity as an elected official are not campaign intervention. The mere fact that the office holder has filed as a candidate for reelection early in the term does not mean that communications addressing an official’s actions outside the context of an electoral campaign would be considered impermissible electoral activities.
To determine whether or not a 501(c)(3) activity constitutes impermissible campaign intervention, the IRS analyzes both the content of the activity and the context of the activity. Proximity to the election is a key factor.  The key factors the Service considers in this a “facts and circumstances” analysis of a 501(c)(3) communication were developed primarily in the context of an active electoral campaign. Therefore, the applicability of the following list to communications years before an election is subject to doubt.  In addition, the list is not exhaustive, and no single factor is determinative. Nevertheless, 501(c)(3)s should consider the following list of “good facts” (i.e. facts that make an activity more likely to be ruled permissible), which includes:
  • If the communication or activity does not refer to a candidate, the election, or voting;
  • If the communication or activity describes the candidate’s position on a broad range of issues;
  • If the communication or activity is motivated by non-campaign events beyond the organization’s control (e.g., the issuance of an executive order or a pending vote on legislation or a judicial appointment);
  • If the communication or activity is similar to previous communications or activities conducted by the 501(c)(3); and
  • The distance from the election at the time the communication is made.  
In addition, 501(c)(3) organizations should consider some of the “bad facts” that make an activity more likely to be ruled as impermissible campaign intervention. This list includes:
  • If the communication or activity is deliberately timed to coincide with the election;
  • If the communication or activity is focused on a “wedge issue” that sharply divides candidates for the same office;
  • If the communication or activity is targeted to an audience selected primarily for its relevance to the election;
  • If the communication compares the exempt organization’s preferred policy position to the position of a candidate or multiple candidates; and
  • If the communication or activity is done at the request of a candidate, campaign, or party.
In 2017, most “bad facts” are unlikely to apply to 501(c)(3) communications about current elected officials running in 2020; in contrast, most “good facts” are likely to be applicable. However, talking about making Trump a one-term president, or references to 2020 would likely cross the line. 501(c)(3) organizations should consider these factors when crafting their public communications involving current office holders.
While 501(c)(3) communications presenting a clear stance on specific legislative actions related to an office holder may still constitute lobbying and be subject to limitation, even calls for impeachment are unlikely to be characterized campaign intervention because impeachment is a legislative process, not an electoral one. Calling for the impeachment of an elected official may, however, constitute direct or grassroots lobbying.
Of course, as time passes and the next election draws closer, the application of these factors will alter. There is no clear cut-off point when 501(c)(3) communications critical of elected officials become risky. It is important to assess all relevant facts and weigh all pertinent factors. 

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