Issue

In a presidential election year, there is always the opportunity for conversing and corresponding about candidates. Beware of the rules and that your institution does not participate in prohibited political campaign intervention.

Situation

Marathon Bible College (MBC) is a public charity and a school under I.R.C. sections 501(c)(3) and 170(b)(1)(A)(ii). They publish a monthly newsletter for alumni and student families. MBC’s president writes an “opinion” column in the publication each month. For September, he wants to urge readers to vote for a certain presidential candidate in the national elections.

MBC’s controller calls us to ask what issues might arise from this “endorsement”.

We say that it would appear that this would be political campaign intervention that could endanger MBC’s tax-exempt status.

Rules

From Revenue Ruling 2007-41:
Situation 4.
President B is the president of University K, a section 501(c)(3) organization. University K publishes a monthly alumni newsletter that is distributed to all alumni of the university. In each issue, President B has a column titled “My Views.” The month before the election, President U should be reelected.” For that one issue, President B states in the “My Views” column, “It is my personal opinion that Candidate B pays from his personal funds the portion of the cost of the newsletter attributable to the “My Views” column. Even though he paid part of the cost of the newsletter, the newsletter is an official publication of the university. Because the endorsement appeared in an official publication of University K, it constitutes campaign intervention by University K.

Rev. Rul. 2007-41 is a great guide for whether you are “stepping over the line” with respect to political activities. Email us and we will send you a pdf copy of the ruling.
Also, you may want to listen to our archived webcast (from 7/28/16), “What Every Not-For-Profit Should Know in an Election Year.”

Bottom Line

Especially in an election year, you should be aware and take care that your administration does not inadvertently engage in political campaign activities. It makes sense to touch base with a qualified tax advisor on this issue. He or she will be able to help you navigate these potentially treacherous waters.

Specific questions? Email Dave Moja.

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.