This past Sunday, nearly 1,500 pastors agreed to preach politics at their church services during “Pulpit Freedom Sunday.” This event, which has taken place for the past seven years, is a controversial one where pastors publicly flout 501(c)(3) restrictions on political campaign activity to which their organizations are subject.

The church/politics issue has been a heated one for some time, with many secular and atheist advocacy groups arguing that the IRS largely turns a blind eye to this type of church activity (while subjecting other 501(c)(3) organizations to greater scrutiny). This past summer, a lawsuit between the IRS and the Freedom from Religion Foundation on this issue was settled with the IRS agreeing to monitor churches and other houses of worship for electioneering activity. [link:

Restrictions on Political Activity

As background, 501(c)(3) organizations receive two-fold federal benefits, in the forms of exemption from federal income tax and the ability to accept tax-deductible contributions. These benefits do come with some restrictions, including:

• Limitations on lobbying activity;
• Prohibition on private inurement and private benefit that is more than incidental; and
• Prohibition on partisan political activity.

Churches are regulated differently from other 501(c)(3) organizations in some areas (e.g., they do not have to file a Form 1023 application to be recognized as exempt from taxation, and they do not have to file an annual Form 990 return). However, they are subject to the rules on political activity, and rallying support from the pulpit for or against a political candidate can get their status revoked.

This is an election year, so a refresher on the rules around political activity that apply to 501(c)(3) organizations in particularly relevant. We’ve written on this before, and here is a recap of the highlights:

What 501(c)(3)s CAN’T Do

For all 501(c)(3) organizations, there is an absolute prohibition on political campaign activity. This means that nonprofits cannot:

• Endorse or oppose candidates;
• Contribute to campaigns;
• Distribute candidate campaign materials;
• Display campaign materials or otherwise participate in campaigns.

This prohibition extends to in-kind support as well as monetary, so a 501(c)(3) organization could not let a campaign use its facilities or lend its volunteers to the campaign effort. The IRS will also scrutinize issue advocacy, to determine if it is merely subterfuge for candidate advocacy.

What 501(c)(3)s CAN do

501(c)(3) organizations can permissibly engage in some voter education and registration efforts, so long as those activities are not biased toward a particular party or candidate, coordinated with a particular party or candidate, or targeted at a particular audience that favors a particular party or candidate (note that there are some additional requirements for private foundations in the voter registration area). In addition, 501(c)(3) organizations can host candidate debates or appearances under certain circumstances. Here are some examples of activities in which a 501(c)(3) can participate:

• Producing a voter guide that compares candidates (e.g., mailing a questionnaire to all candidates and publishing results so voters can make informed decisions);
• Publishing a report on voting records of incumbent members of a legislature;
• Hosting a nonpartisan candidate debate or forum (i.e., all candidates are invited and given equal time to present views, the questions are prepared by a nonpartisan panel and cover a wide range of issues, and there is no commentary on the part of the moderator); and
• Inviting candidates to make event appearances  (so long as this is done in a nonpartisan manner, with invites extended to all candidates).

Check back on our blog for additional coverage of political and lobbying restrictions that apply to nonprofits. If you  have any questions on these or other nonprofit issues, contact kschauble@leafferlaw.com or bseidel@leafferlaw.com.