covered; educate all candidates on issues of public interest; and create legislative scorecards or voter guides. All of these permissible activities must be done on a nonpartisan basis. A 501(c)(3) entityshould not even tacitly express favor or disfavor of a particular candidate.FFRF has received many complaints about church leaders expressing political opinions and endorsingcertain candidates either as part of a Sunday sermon, in a church newsletter, in a robocall, or in someother communication from the church. While leaders of churches or religious organizations mayexpress their opinions on political matters as individuals, they are precluded from making “partisancomments in official organization publications or at official functions of the organization.” Rev. Rul.2007-41, 2007-25 I.R.B. (June 28, 2007). To report violations to the IRS, see "How to Complain" (atend).
Churches and Lobbying
The Foundation receives numerous questions about church activities in influencing legislation, or lobbying. A 501(c)(3) organization, including a church, is allowed to engage only in “insubstantial”lobbying. In other words, a 501(c)(3) could lose its tax-exempt status if it engages in substantiallobbying; however, the definition of “insubstantial” is amorphous. For some 501(c)(3)s, which are notchurches, the organization may make a “501(h) election,” which allows them to measure substantiality by expenditures and to spend up to 20% of its budget on lobbying (for annual budgets under $500k).However, churches are not eligible to make the 501(h) election and, thus, are subject to a vaguer test.Keep in mind that “religious organizations” are treated differently from “churches” and, thus, like other 501(c)(3) organizations, are permitted to make a 501(h) election.Although the “insubstantial test” for churches is vague, churches can do a minimal amount of lobbying.Churches can attempt to influence any legislation considered at the federal level (Congress), state level(state legislatures), or local and municipal level (city councils and county boards). The IRS considerslegislation to include any acts, bills, resolutions, confirmation of political appointees (including Cabinetmembers and judgeships), and ballot initiatives or referendums. These advocacy activities, however,must be limited. Unfortunately, if a church is one with an active membership, regular services andongoing community activities, it may be difficult to prove that more than a minimal amount of thechurch’s time and resources are being spent on lobbying. All of the facts of their participation must beconsidered. For example, if the topic of the sermons for 49 weeks of the year do not addressreferendum issues, but do advise on referenda for the remaining 3 weeks, is that “minimal”? If youwant the IRS to consider that question, see “How to Complain” at the end of this paper.
Ballot Initiatives or Referendum
Churches have been actively involved in many recent controversial ballot initiatives and referenda innumerous states across the country. Under the law, this is permissible activity because ballot initiativesare considered to be “legislation” and, thus, are lobbying activities, not “political” activity. For example, a priest is allowed to tell his congregation to support a referendum denying equal marriagerights to gay partners, and to include church support or opposition to referenda in church bulletins.Again, however, if there is substantial time or money spent on this by the church, that could be problematic.2