WHAT IS THE EFFECT OF CITIZENS UNITED ON POLITICAL ACTIVITIES OF NONPROFIT CHARITIES AND PRIVATE FOUNDATIONS?
March 22, 2010
President Obama brought the flak around the recent Supreme Court case Citizens United vs. Federal Election Commission to an even higher crescendo when he made a pointed remark during his first State of the Union address criticizing the ruling while a majority of the Court was seated directly in front of him. So, with all this excitement, headlines in the papers and general hoopla over the case, what you want to know is, how does this ruling affect me as a 501(c)(3) public charity or private foundation?
The case was a 5-4 ruling involving the question of free speech for corporations under the First Amendment, and has the effect of permitting corporations and labor unions, and therefore nonprofit organizations, to incur expenses on public communications that are overtly for or against candidates for public office. The ruling, however, did not change or even apply to a 501(c)(3)’s rules regarding activities and amount of political involvement allowed.
Those political involvement rules for 501(c)(3)’s stem from the Internal Revenue Code for tax exemption. In summary, they apply to 501(c)(3)’s to expressly prohibit public charities and private foundations from participating or intervening in any political campaign on behalf of or in opposition to any candidate for public office. They are allowed to provide nonpartisan voter education and engagement activities.
As always, charities and foundations can set up 501(c)(4) social welfare organizations to carry out lobbying activities through education and lobbying of social and economic isshttps://www.aprio.com/industries/non-profit-tax-exempt-organizations/ues.
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