Playing by the Rules, Keeping the Faith:

Congregations and Elections

a primer from the Texas Interfaith Center for Public Policy

Disclaimer
This presentation is intended for educational purposes regarding the subject matter covered. It should not be relied upon as legal advice or as having created an attorney client relationship between your entity and the Interfaith Center. If you should have a specific legal question, the services of a legal processional should be sought. The legal staff of the Texas Interfaith Center for Public Policy would be happy to help or refer you to another legal professional.

This Presentation Covers

Why elections and voting are important to our faiths Common questions and concerns about congregational political activity What the law says about congregations and election-year advocacy Examples of permissible and non-permissible election year activities for congregations

Why elections and voting are important to our faiths

Voting: The Right to Preserve All Others

Dignity cannot be found in man's possessions. It cannot be found in his power or in his position. It really rests on his right to be treated as a man equal in opportunity to all others. It says that he shall share in freedom, he shall choose his leaders, educate his children, provide for his family according to his ability and his merits as a human being.Lyndon B. Johnson, March 15, 1965, The Voting Rights Act Address

Why elections and voting are important to our faiths

What the Faith Community Brings Source of reliable, neutral information about the process Safe space to ask questions and learn Remind all members of the importance of voting Assistance to the needy Watchful eyes on the proceedings

Common questions and concerns

1. Talking about the elections with my congregation will be divisive.

Not if its undertaken with love Remember: neutrality is not the same as disengagement Democracy requires active participation by an educated public Know the difference between congregational and individual activities Engaged members=opinions Neutral congregation=information

Common questions and concerns

2. Dont the IRS rules against electioneering by 501(c)(3) nonprofits restrict our congregations free speech?
Nothe rules just protect the individual taxpayer from subsidizing someone elses political positions. Congregations are both tax exempt AND tax deductible. Tax benefit=indirect public funding for the work of the organization. Imagine big campaign contributors funneling contributions through a church to get a tax deduction on their free speech. The law also protects integrity of nonprofit donationsso donors can be confident their dollars are supporting the services they choose, and not being used to fund a political campaign donors might not even support.

Common questions and concerns

3. Dont the IRS rules restrict our congregations free exercise of religion?
Noreligious communities are not singled out in the rules. All 501(c)(3) nonprofits are treated neutrally Other organizations with the same designation include: schools, hospitals, service organizations, colleges, museums, universities, and scientific organizations.

Common questions and concerns

4. What happens if a congregations breaks the rules, and how does the IRS find out?
Penalties range based on severity.
The least severe is a warning The most severe would be a one year suspension of tax exempt status AND an excise tax on any political expenditures

Unintentional violations are usually a warning or just an excise tax on the expenditure, not revocation of tax-exempt status IRS does not have discretion to initiate investigations against congregations. Generally, a third party has reported the congregation or its based on facts described in the media.

So how restricted are we really?

Not much. Only from being partisan.

What the law says

What are the federal requirements relating to elections for a 501(c)(3) organization? Corporationsoperated exclusively for religious purposes[shall be exempt if it]does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. 26 U.S.C. 501(c)(3)

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What the law says

Can you make that a little simpler?

Yes: Dont do anything that benefits (or hinders) a candidate. Thats it.

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What the law says

I want my congregation to be involved in an election-year project, but Im afraid its against the rules.
1. 2. 3. Does it involve your congregation as an entity? (as opposed to individuals) Does it involve a candidate? (as opposed to an issue) Is the candidate for elected office? (as opposed to an appointed position)

The rules against political activity only apply if the answer to all three questions is yes.

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EXAMPLES
of permissible and non-permissible election year activities for congregations

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Example 1
Denomination X spends millions to push a constitutional amendment supporting a water proposition. Is this permissible?

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Yes and heres why:

Denomination X is taking a position on an issue. Issue advocacy is generally okay for congregations because it is not in support or opposition to a candidate.
Caveat 1: 501(c)(3) lobbying rules applythese say lobbying cant be a substantial share of your budget (an unlikely scenario for a congregation). Caveat 2: if there were no ballot proposition, but simply a sermon on the importance of doing something about water, the lobby rules would not apply as there is no proposition or legislation on which to be lobbying.

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Example 2
Pastor Dave attends Candidate Ys campaign rally at the local chamber of commerce. Candidate says Pastor Dave, of My Local Congregation, is here to say a few words. Pastor Dave gets up, never mentions where he works, but endorses candidate. A local newspaper picks up the story and identifies Pastor Dave as minister of My Local Congregation.
Is this permissible?

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Yes and heres why:

Pastor Dave is acting as an individual. As a general rule, individual political activity is okay even for clergy. Licking envelopes at the campaign headquarters is okay. Phone banking for a candidate is okay so as long as you arent saying Pastor Dave of Your Local Congregation, calling to say vote for Pastor uses church Xerox machine to copy candidates materials? NOT okay. Caveat: if you are clergy or an employee of a congregation, make it clear you are acting in an individual capacity and are not representing the entity. For example, at a candidate rally, the candidate says Pastor Dave, of My Local Congregation, is here to say a few words. To be safe and to save your attorney some heartburn, start your remarks by clarifying, Im here in individual capacity.

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Example 3
Congregation A has Candidate B speak at their worship service from the pulpit. Congregation A invited every candidate, but only Candidate B accepted the invitation. The clergy leader introduces Candidate B, but makes no editorial comment.
Is this permissible?

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Yes and heres why:

Its okay because the congregation invited all the candidates for that office and made no editorial comment in the introduction, but only one accepted.
All candidates must be given equal opportunity Cannot control who accepts invitation

Caveat: It is NOT permissible to take up collection for the candidate or indicate congregational approval of them.

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Example 4
Congregation A has a member, Bob, who is running for city council, and who is also an expert in financial administration. Congregation leaders invite Bob and only Bob to come talk to their congregation on church finance. Congregation A promotes the event and states in the advertisement come hear Bob, candidate for city council, talk about church finance.

Is this permissible?

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No, but heres why:

Everything about this example would have been perfectly permissible, but for the fact they mentioned in their advertisement that the speaker was a candidate for office. The speaker was invited for his expertise on church finance. The fact that he was a candidate for office was irrelevant to the presentation and benefited that candidate over another. Caveat: Dignitaries in the Congregation - Its also okay to acknowledge a current elected official who is running for another term as long as you mention their current office but not their candidacy.

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Example 5
Rev. M of a local congregation is tired of the increasing cost of living in his city and wants to run for city council.
Is this permissible?

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Yes and heres why:

Its okay because Rev. M is exercising their individual right to run for office. Caveat: Keep things very separate!
In worship never mention candidacy Keep fundraising & expenditures separate
Dont use the copy machine or phones No use of office space or other in kind donations

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Example 6
Congregation C puts together a voter education guide of candidates encompassing a broad range of issues. They sent questionnaires to every candidate and printed all those returned with answers. They included no editorial comment.
Is this permissible?

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Yes and heres why:

The voter guide is okay because the congregation did not include any information or interpretation other than the candidates exact words, and they sent the questionnaire to every candidate. Caveat: Its important that the questionnaire cover a broad range of issues, and that there be no editorial comment.

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Example 7
Congregation C publishes the voting record of several incumbents. The voting records cover a broad range of issues and contain no editorial comment.
Is this permissible?

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Yes, but caution and heres why:

This congregation published a stand alone piece with only voting records. The congregation did not include any editorial comment or expression of preference in the voting records and they included votes on several different issues. When publishing a voting record, context becomes really important in answering the question of this examples permissibility.
Caveat 1: Voting records become tricky when combined with campaigns because comparisons often are not apples to apples. An incumbent for state representative will have a different record than a city councilperson challenging for the seat. Additionally, a challenger may have no record at all. Caveat 2: When combining a voting record with other literature, the risk becomes higher as the content of the voting record will be compared with the other literature in an examination for bias. Never ever couple one with the churchs social positions on issues. Caveat 3: Other factors IRS will examine is whether the voting record mentions an individuals candidacy, as well as the timing, manner, and circumstances in which a voting record is distributed as well as the breadth of issues presented.

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Example 8
Congregation C is holding a candidate forum. They invited all legally qualified candidates and distribute a nonbiased voter guide. The moderator is trustworthy in her unbiasedness and gives each candidate equal opportunity.
Is this permissible?

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Yes, and heres why:

Its okay for the congregation to hold a candidate forum as long as all candidates are invited, a broad range of issues is covered, there is no comment on candidates responses, the churchs views on issues are NOT discussed, the moderator is independent and nonpartisan, and each candidate gets equal opportunity. Caveat: Be sure you have a moderator whom you can trust to ensure fair administration of the event.

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Example 9
One political partys county coordinated campaign prepared a nonbiased voter education guide for 501(c)(3) groups that Congregation Xs leader reads and finds it completely unbiased. The leader plans to distribute the guide to congregation members.
Is this permissible?

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NO! and heres why:

Its never okay for a congregation to distribute materials prepared by a political campaign. Materials produced from campaigns are deemed to be inherently biased, even if they were prepared as a courtesy and/or they seem really unbiased.

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Example 10
Congregation X decides to use their van to drive people to the polls who need a ride during both early voting and on election day. A county political party staffer calls and asks if they can refer people to Congregation X if they need rides. The congregation leader says Ive already told the County Elections office we are willing to give a ride to anyone who needs it.
Is this permissible?

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Yes and heres why:

Its okay because the congregation has made clear that it is not cooperating with any campaign and is happy to drive anyone to the polls who needs a ride. Caveat: it is likely people will want to talk about who is on the ballot on the way to the polling place. Mention either no candidates or all candidates. Voter guides are ok to distribute so long as they are nonbiased.

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Example 11
Congregation C allows a candidate for office to use its facilities free of charge. The congregation does not charge local groups like Alcoholics Anonymous or the Boy Scouts for use of their facilities.
Is this permissible?

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No and heres why:

Its not okay to let a candidate or party use congregational space for free, even if you do that for community groups. It is okay to rent space to candidates or parties but it must be at fair market value. Free or reduced rent constitutes an impermissible in-kind donation. Caveat: You must make the space available to all candidates on equal basis, and you cannot advertise or promote the political campaign or event.

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Example 12
Congregation Z is an entrepreneurial congregation. They sell advertisement space in the bulletin, website, and regularly sell their mailing lists. They provide one political party ad space and their mailing list for the same cost as other local businesses. When a candidate from the other party asks for ad space and the list, they reluctantly agree to sell.
Is this permissible?

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Yes and heres why:

Its okay if the congregation treats the political party or candidate exactly like any other, nonpolitical advertising, including charging the same rates. In addition, the ads must be identified as paid political advertising, must be available to all candidates on equal basis, and must expressly state they are not an endorsement. Caveats: A congregation that has never sold nonpolitical advertising and suddenly starts selling political ads will draw suspicion. Also, you may want to think through how was ad solicited and presented? Accepting one political ad opens the door to anyone who wants to advertise because a congregation may not selectively decline ads. Finally, income from such advertisements is subject to unrelated business income tax.

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Example 13
Congregation Z is very involved in a particular issue. The congregations leader has formed a separate 501(c)(4) and hired a full-time lobbyist. A wealthy congregation member wants to help pay the lobbyists salary, but also really wants the tax deduction that comes with donating to a c3, but not to a c4. The congregation leader says, Well, go ahead and donate to the congregation, and we will transfer money to the c4 at a later time.
Is this permissible?

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No and heres why:

Its never okay to transfer money from a 501(c)(3) nonprofit to a 501(c)(4) because it circumvents the restrictions that are supposed to protect the taxpayers who subsidize 501(c)(3)s.

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Thank You!
Reminder: Do not rely on this presentation as legal advice, but as educational information only. Application of laws can be very fact specific. If you have a question, seek counsel. We are here as a resource.

For more information, contact: Joshua Houston, General Counsel Texas Interfaith Center for Public Policy (512) 4723903

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