QAMore Questions for 501(c)(3) Organizations

Q: A political candidate approached our nonprofit organization about renting space to hold a fund raiser for the political candidate.
Nonprofits may rent a public hall or room to candidates if done so on a nonpartisan basis where it is equally available to any candidates. The facility must be rented at an acceptable fair market rate without a subsidy that might constitute a contribution to the candidate.

Q: Can a nonprofit staff run for office without resigning?
Nonprofits staff are free to seek elective office. However, they cannot campaign on the clock and should follow basic rules for “what staff can do” (see fact sheet). It is ok to be on staff in the initial exploratory stages. Nonprofits have different policies on this but as the campaign heats up and requires work conflicting with a day job, they should take a leave. In addition:

  • It is common practice for a candidate working for or on the board of a 501(c)(3)  organization to take a leave once the campaign goes beyond the exploratory stage.
  • The nonprofit cannot be seen as “financing” their campaign.
  • Because nonprofit staff may not have personal wealth or a profession like an attorney that provides outside income to support themselves and a family, there can be challenges.
  • Many seek part-time consulting work elsewhere to maintain income.

Q: When do I know someone is officially a candidate for the purpose of knowing when any support might be considered partisan?
The rule of thumb is that a person is candidate once they have publicly declared their intention to run for public office or anyone certified by their state election office as a qualified candidate. Incumbents often wait until close to the filing deadline to declare their candidacy for re-election.

Q: I understand some nonprofits establish 501(c)(4) organizations to increase advocacy. How do 501(c)(4)s differ from 501(c)(3)s?
A 501(c)(4)  organization is a nonprofit “social welfare” organization set up for the purposes of lobbying and doing partisan and nonpartisan advocacy on public issues. Key differences are:

  • 501(c)(4) s are allowed to spend up to half its resources – but no more – to finance partisan political activities to support or oppose a candidate or engage in election activities with members.
  • Partisan political activities must be a “secondary purpose”
  • There are no limits on their lobbying activities.
  • Donors to a 501(c)(4)  organization may not take a tax deduction for their donation.
  • Foundations can only support specific activities of a 501(c)(4) s deemed nonpartisan and appropriate for 501(c)(3)  charities. In addition, private foundations may not fund any voter registration or lobbying done by a 501(c)(4) , whereas they can, with restrictions, for 501(c)(3)s.

Additional Guidance

For additional guidance, consult an attorney familiar with nonprofit law or the resources such as the Election Year Activities for 501(c)(4) Social Welfare Organizations or Establishing and Operating Affiliated 501(c)(3)  and 501(c)(4)  organizations, B. Holly Schadler, Bolder Advocacy.

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