In an election year, could “political” activities of student organizations cause issues for your school’s 501(c)(3) status?
Denali Christian College (DCC) is a nonprofit organization under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii). Their controller called to ask about whether the IRS would consider DCC to have engaged in prohibited political activities with respect to the endorsement of a candidate for Congress by DCC’s student newspaper.
DCC provides office space and financial support for the publication costs. Several professors at the university serve as advisers to the student editors. Editorial policy is determined by a majority vote of the student editors. Neither the college administration nor the advisors exercise any control or direction over the newspaper’s editorial policy. A statement on the editorial pages makes it clear the views expressed are those of the student editors and not of DCC. In customary journalistic fashion, from time to time there are editorials taking a position on pending or proposed legislation and candidates for public office.
In the IRS’ 2002 EO CPE Text, the Service has taken the position that “[t]he actions of students generally are not attributed to an educational institution unless they are undertaken at the direction of and with authorization of a school official.”
Revenue Ruling 72-513 deals with a student newspaper that endorses candidates for public office. In this ruling, the Service determined that the university was not attempting to influence legislation or participate in political campaigns on behalf of candidates for public office. The Service reasoned as follows:
“The publication and dissemination of the editorial statements in question are acts and expressions of opinion by students occurring in the curse of bona fide participation in academic programs and academic-related functions of the educational institution. In such circumstances, the fact that the university furnishes physical facilities and faculty advisors in connection with the operation of the student newspaper does not make the expression of political views by the students in the publishing of the newspaper the acts of the university within the intendment of section 501(c)(3) of the Code.”
Especially in an election year, it is a best practice to ensure that you understand the IRS rules with regard to political activities. One great resource for this is Revenue Ruling 2007-41. Further, you should always check with a qualified tax advisor with respect to these types of issues.
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.