PTAs support/oppose issues not people.
Politics, whether it is the election of a state governor or a local school board member, affects schools, children, and families. As much as some PTAs may want to get involved in the political fray, political activity can jeopardize nonprofit organizations' tax-exempt status. It's no surprise then that election years always generate questions from PTAs about political activities. This article can help PTAs determine what activities are prohibited and which are permissible if they wish to keep their tax-exempt status.
Under IRS regulation 501(c)(3) nonprofits, such as PTA, are governed by specific rules that carry severe penalties if violated. The basic IRS rule is that any political intervention is prohibited under the Internal Revenue Code (IRC). According to section 501(c)(3), nonprofits get and keep their tax exemption only if they do "not participate in, or intervene in [including the publishing or distributing of statements], any political campaign on behalf of [or in opposition to] any candidate for public office." If a charitable organization engages in a political campaign activity, it becomes classified as an action organization and may be disqualified for tax-exempt status.
Nonprofits may not intervene in partisan political campaigns. The IRS and other federal agencies take this very seriously. Violation of it can lead to retroactive revocation of the organization's 501(c)(3) status (temporarily or permanently), with the organization becoming liable for any resultant taxes. Additional penalties include a 10 percent tax on any political expenditures and a 2.5 percent tax levied against the managers who approved such expenditures. It isn't always easy to conform a PTA's conduct to federal tax laws while exercising First Amendment rights. For PTAs, though, federal tax laws concerning political activities should take precedence.
Following are some activities permitted and some prohibited by 501(c)3) nonprofits. Even the permitted activities should be undertaken only with extreme caution. The IRS takes this very seriously and says it has "zero tolerance" for political activity on the part of section 501 (c)(3) organizations.
PROHIBITED ACTIVITIES
Critizing Political Incumbents. PTAs that have criticized, lobbied, and held incumbents accountable in past years can continue to do so during an election year, although the closer the election becomes, the more likely criticism is to be viewed as political campaigning. A 501(c)(3) is better protected during an election year if it has been active in previous non-election years.
Cash or in-kind contributions to candidates or political parties. The IRS prohibits PTAs from making any cash or in-kind contributions to a candidate, political committee, or political party. The same is true for loans or payments to attend partisan political dinners and similar events. An in-kind contribution occurs when a PTA provides anything of value without receiving fair market in return. This includes use of a PTA's mailing list, facilities, equipment, staff time, and any other resources.
Endorsing Candidates. The organization itself is prohibited from endorsing candidates. Individuals associated with PTAs can publicly endorse candidates for office, but should not use their PTA title or office. The IRS will allow personal endorsements of candidates by PTA officials as long they do not use the organization's financial resources, facilities, or personnel. Also, the officials must clearly and unambiguously indicate the actions taken or statements made are those of the individuals and not of the organization.
Advocacy of Candidates. The IRS prohibits 501(c)(3) organizations from engaging in either the expressed or implied advocacy of particular candidates. Express advocacy exists when a statement or publication encourages the election or defeat of a clearly identified candidate. Implied advocacy exists when a communication does not clearly identify the candidate to vote for or against, but instead makes statements such as "Remember, vote conservative."
PTAs concerned about specific issues are allowed to use an election to get increased exposure for their issues. They also are allowed to work to get their positions on issues included in political party platforms. While nonprofits are free to publicize their issues, they are not allowed to directly solicit candidates to support such issues.
Although the IRS says it allows 501(c)(3) organizations to deal with moral, social, or economic issues during election years, nonprofits are not allowed to engage in political intervention by using "code words" (e.g. conservative, liberal, anti-gun) in communications that are timed to help or hurt the election chances of any candidate.
Political Action Committees. A PAC is a political committee whose purpose is to influence the public. The IRS prohibits nonprofits from supporting a PAC if its purpose is to influence the election of any individual to public office.
PERMISSIBLE ACTIVITIES
Voter registration and "Get Out the Vote" drives. A 501(c)(3) non-profit can run non-partisan voter registrations or "get out the vote" drives. To be non-partisan, such efforts ...
- Must be designed solely to educate the public about the importance of voting.
- Must not show any bias for or against any candidate or party.
PTA can encourage people to participate by mentioning key issues in the election as long as its presentation of the issues does not take advantage of any differences between the candidates' positions on the issues. PTA must present enough relevant facts to permit the public to form its own opinion or conclusion concerning the candidates.
Sponsoring candidate debates. IRS rules approve a public forum sponsored by a 501 (c)(3) non-profit in which ...
- All qualified candidates were invited;
- Questions were prepared by an independent panel;
- Topics covered a broad range of issues;
- All candidates had an equal chance to present their views, and
- The moderator acted in an unbiased manner.
Under FEC (Federal Elections Commission) rules, which the IRS is likely to follow, at least two candidates must participate to qualify the debate as non-partisan.
Issuing Candidate Questionnaires or voters' guides. A PTA may not advance its own agenda by presenting one candidate more favorably than another. The only legal way to pay for or distribute materials about the positions of candidates is if the purpose is to impartially educate voters.
According to the IRS, a nonprofit is allowed to ...
- Give candidates a questionnaire that solicits brief statements about each candidate's position on a wide range of issues.
- Select the issues solely on the basis of their importance and interest to the electorate as a whole.
- Publish all responses in a voters' guide generally made available to the public.
- Ensure that the content and structure of both the questionnaire and voters' guide show no bias or preference regarding any candidate's views.
Doing any of the following can place a PTA at risk:
- Not printing candidates' answers completely
- Paraphrasing candidates' answers
- Getting the candidates' views from anywhere other than the questionnaire
- Summarizing the candidates' positions on issues
Issue campaigns or ballot initiatives. There are circumstances under which PTA may support an issue related campaign or ballot initiative, such as a zoning or constitutional matter, school levy, or state-wide referendum. These activities must be used to promote the organization's viewpoint on particular issues, and not a candidate's position.
PTAs may financially contribute to an issue campaign or ballot measure or, if PTAs take the lead on this activity, they may accept contributions from outside organizations. In either case, such funds may not be used solely for lobbying purposes. Money must be used to promote a variety of activities. In addition to lobbying, funds should be used for educating the public on the issue and organizing members.
PTAs that engage in issue campaigns or ballot related activities must keep appropriate financial records and comply with state and local reporting requirements. State law should be consulted before any of these activities are pursued.