Politics and the 501(c)(3)
Tax Law Limits a Religious Organization's Political Involvement
Religion has been at the forefront of many U.S. Presidential campaigns over the last couple of decades. In the 2008 election, there have already been several controversies surrounding the topic of religion.
The 2008 Election And Religion - During the Democratic Primaries, Senator Barack Obama would have to answer repeatedly concerning allegations of racially charged and anti-American sermons given by his former pastor Jeremiah Wright. Senator John McCain was also questioned regarding his efforts to gain the endorsement of well known television preacher John Hagee, and his later acceptance of an endorsement from Rod Parsley. Both Hagee and Parsley have been criticized for their controversial and sometimes politically motivated sermons. Wright, Hagee and Parsley are just a few of several ministers broaching the subject of politics from the pulpit. Per the law, how involved can a religious organization and its leader(s) become in politics, and how does the 501(c)(3) tax exemption status limit that involvement?
The 501(c)(3) Tax Law - The 501(c)(3) tax law is specific to religious organizations. It affords these groups tax exemption status along with a right to give tax deductible receipts to their donors. By law, church organizations are automatically tax exempt; thus, they are not required to apply for the 501(c)(3). However, most medium to large churches have received the 501(c)(3) because it gives the organization the ability to apply for federal funds and other grant programs. Religious organizations other than churches are required to apply for the 501(c)(3) (with a few exceptions).
501(c)(3) Rules Pertaining To Political Activity - Application for the 501(c)(3) is submitted by the organization's Board of Directors. Acceptance of the 501(c)(3) means that the Board agrees to adhere to the rules that govern legal religious organizations. Many of those rules pertain to political activity such as:
- A religious organization is allowed to hold general voter education or registration activities as long as the organization does not show a preference to an individual candidate and/or political party.
- A religious organization is prohibited from campaigning in any way for or against an individual candidate or political party.
- A religious organization is prohibited from donating funds to a candidate or political party.
- Pastors, rabbis and other religious leaders can endorse a candidate or political party as an individual but not as a representative of their religious entity. Endorsements cannot be made at an official gathering or organizational publication.
- The organization is allowed to play a minor role in campaigning, lobbying or other efforts involved in trying to get certain legislation passed.
Politics and religion can be a very gray area. Sermons appearing to be political in nature may or may not be viewed as a problem according to the tax code. Nonetheless, religious organizations and leaders should be careful to study the 501(c)(3) tax code in its entirety. Breaking of any of the rules of the 501(c)(3) can result in the loss of one's tax exemption status.
The 501(c)(3) is for religious organizations.
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