(Updated 2026) Campaign finance laws establish clear-cut rules and heavily restrict 501(c)(3) organizations, including non-profits, welfare charities, and churches, with a simple rule. They are not allowed to endorse or oppose any public office candidate.
If your organization were to disregard this, it could strip your tax-exempt status from the Internal Revenue Service, and come with fines. The following is a run-through of what’s permitted and what’s not, and will also guide you on how to tackle voter education, ballot measures and public statements, so that you avoid crossing the line.
Key Takeaways
- Since 1954, the Johnson Amendment has basically locked down the possibility for 501(c)(3) charities and churches to endorse candidates or contribute to campaigns.
- If an organization violates this, they face losing their tax-exempt status, and being slapped with a penalty.
- Nonpartisan voter education and issue campaigns can be run by these organizations, as long as it’s not express advocacy, which is a call for a specific election result.
- The Federal Election Commission and IRS are strict about the way you report your spending. Tardy or false reports can trigger penalties under the McCain-Feingold Act.
- It’s wise to get expert advice from lawyers before any election activity, since court cases, such as Citizens United v FEC, and new proposals can always alter the landscape.
Campaign Finance Laws & Charitable Organizations
Charitable groups under section 501(c)(3) must follow strict federal rules shaped by the Federal Election Commission and the U.S. Supreme Court. The core limits cover donations, endorsements, and what you say close to elections. These rules protect public trust and keep charity funds out of campaigns.
Prohibitions for 501(c)(3) Charitable Organizations
The Johnson Amendment stops 501(c)(3) groups, including churches, from supporting or opposing any candidate for public office. No candidate endorsements or donations to campaigns are allowed. You also cannot publish or share statements for or against a person running for office at any level.
The IRS enforces this rule. Breaking it risks loss of tax-exempt status. Excise taxes may also apply. Courts and laws, including Citizens United v. Federal Election Commission and the Bipartisan Campaign Reform Act, have changed parts of campaign finance. The ban on direct political activity by charities has stayed firm.
Key Rules for Charitable Organizations (501(c)(3))
Stay neutral on candidates. A 501(c)(3) cannot endorse or oppose a person running for office, donate to a campaign, or make independent expenditures. An independent expenditure is spending that tries to influence voters without coordinating with a campaign.
Nonpartisan voter education and registration are allowed. Host forums that treat candidates fairly. Speak on policy issues and ballot measures, but do not take sides for or against a candidate. Limited lobbying is allowed if it remains a small part of your work. Track activity and file accurate IRS Form 990 reports.
Crossing into campaign activity can lead to IRS and FEC action. That includes using soft money, which is unregulated funds used outside FECA limits, or working through political action committees, called PACs. Both can put your nonprofit status at risk.
Campaign Finance and Charitable Donations
Be careful with how campaign finances touch your charity. A political committee may donate to a 501(c)(3) only if the money does not support any candidate or committee. For example, leftover funds from a closed federal campaign can go to a charity, not to a person.
FEC rules block 501(c)(3) groups from giving to campaigns or PACs. Some sources are banned from giving at all, such as foreign nationals. The Federal Elections Campaign Act of 1971 and the Johnson Amendment set clear walls between charity work and campaign activity.
Other Nonprofits (501(c)(4), 527)
Other tax-exempt organizations follow different rules. Section 501(c)(4) social welfare groups can take part in political activity, but it cannot be their main purpose. These groups may lobby on policy. They cannot give directly to candidates, but they can spend on issues that affect the public.
Section 527 organizations exist to influence elections. These include super PACs and leadership PACs. They may support or oppose candidates more openly under FECA rules. Both 501(c)(4)s and 527s must file public reports, such as IRS Form 990, so people can see sources and uses of funds.
What Charitable Organizations Should Know About Campaign Finance Laws
Well-known rules of campaign finance can be very clear-cut but get progressively tricky as an election draws near. A concise checklist and a phone call with a lawyer can be a good way to prevent a charity from making expensive mistakes.
Trap for the Unwary
However, even a small slip-up can cause big problems, a charity might make statements about a ballot initiative, and not thinking a candidate is involved is no guarantee that the organization won’t be in the firing line.
As for free speech, the IRS and the FEC have set boundaries for charitable corporations in relation to their election communications. The cases and laws around this, such as Citizens United, McConnell v. Federal Election Commission, H.R.1, the DISCLOSE Act and the Freedom to Vote Act show exactly how quickly the area can change.
It’s a good idea to get to know the lingo.
Hard money, soft money, and bundling all carry legal risks for a charity, because each of these actions brings the law into play.
Express Advocacy
Express advocacy is also strictly regulated and may not be used by 501(c)3’s to tell the public to vote for or against a candidate. If so, will be forfeit its tax-exempt status.
States have different guidelines too, in Arizona, for instance, communications 16 weeks before an election are deemed as an attempt to influence voters if containing a load of supportive or opposing words. Drawing heavily from federal law and the Buckley v. Valeo ruling.
Campaign Finance Laws
Campaign finance regulations for tax-exempt groups are fairly rigid, a 501(c)3 can’t endorse candidates, nor send donations to their campaigns. Coming into effect in ‘54, the Johnson Amendment strictly enforces this rule.
When a charity wants to engage in advocacy and campaigns, it must register a political committee with the Secretary of State and then comply with the associated reporting requirements, otherwise missing or late filings will result in penalties or loss of status.
The landscape of the modern system has been shaped by the McCain-Feingold Act, Citizens United v. FEC and Davis v. Federal Election Commission, and also dictates the reporting requirements for different types of entities, among them, the 501(c)(4)s, super PACs, PACs, trusts, and limited liability companies.
Issue Based Campaigns
Issue-based campaigns are a viable option that issue advocacy firms may consider to sidestep political elections. Issue advocacy describes, explains, policies and laws without pushing voters to choose a specific candidate and its key function is to inform and support a charity’s mission.
The Johnson Amendment bans religious organizations from backing any candidate, albeit public education has become an option as far as a religious group may name a candidate. The courts will watch and control: The Courts, albeit, in their background. Basically, you can simply think, teach and never tell people who to vote for.
Express Advocacy Campaigns
A 501(c)(3) non-profit is out of luck, and statements like “Vote for Smith” or “Defeat Jones” are strictly forbidden, when launching a campaign for or against a political candidate or ballot measure. Any group that wants to engage in such advocacy has to set up a political committee, comply with FEC guidelines and report its expenses under the McCain-Feingold Act.
Court cases such as Wisconsin Right to Life and SpeechNow.org v. FEC, have significantly impacted how spending works for other types of organizations. If a charity goes beyond its allowed activities, it stands to lose its tax-exempt status, and may face IRS penalties. As they approach the limit, charities often opt to establish 501(c)(4) or Political Action Committee (PAC) structures to engage in more direct election speech.
Consequences of Non-Compliance
Consequences for non-compliance, be it audits or investigations by the FEC or IRS, will not be pleasant, nor will the financial penalties. A 501(c)(3) could find itself losing its tax-exemption, and the generosity of its donors also wouldn’t be eligible for the deduction.
Reputation loss is pretty much guaranteed. During major elections, media and watch-dogs review reports, and a single mistake turns into a story. It’s no wonder why spotless records and simple systems are really important.
Recommendations
If your group’s planning on engaging in activities that may involve campaign finance, it’s a good idea to consult with a lawyer, or have a chat with a compliance expert. Especially in the light of the Johnson Amendment and the shifting proposals of H.R. 5175 And the For the People Act, you could be facing an audit, financial penalties, and an invitation to lose your tax-exempt status.
You’ll need to stay up-to-date with what’s going on in Congress, or suffer the consequences.
Resource Availability
A yearly handbook in Arizona released by the Secretary of State explains all about campaign finance rules, how to monitor spending on ballot measures and initiatives. As for 501(c)(3) organizations, the safest path is clear: don’t endorse candidates, don’t donate to political campaigns, and keep your focus on nonpartisan education and policy issues.
Churches, public charities and limited liability companies that are classified as nonprofits can make use of the online portal from the Cybersecurity and Infrastructure Security Agency to stay on top of compliance and data security.
Conclusion
501(C)(3) groups, for example, must be well aware that they should avoid using donor funds for anything that goes towards candidate activity.
So that both their and their donors’ interests are protected, stay clear of the Federal Election Commission laws, consulting an attorney who’s expert in the area can prevent major problems in the future.
This isn’t legal advice, general information is what this is.
So, if you’re unsure, you should speak to a lawyer who’s versed in the Federal Election Commission’s rules, the Federal Election Campaign Act and IRS regulations. A short review now may prevent a lot of financial troubles down the line.
FAQs
1. Can churches donate to political campaigns?
No, churches cannot donate to political campaigns. The Johnson Amendment bars them from supporting or opposing candidates if they want to keep their tax-exempt status.
2. Can a 501c3 endorse candidates or be political?
A 501c3 organization cannot endorse candidates for public office, nor can it take part in campaign activities. This rule keeps nonprofits separate from direct politics.
3. Can a nonprofit accept donations from a political campaign?
A 501c3 is not allowed to accept donations that come directly from a political campaign; this helps maintain clear lines between charitable work and election activity.
4. How do free speech and association relate to the Johnson Amendment for limited liability companies and charities?
The Johnson Amendment limits certain actions by charities like endorsing candidates, but it does not stop individuals connected with these groups—including those involved with limited liability companies—from expressing personal views outside of official roles as part of their right to free speech and association.
Ellis Carter is a nonprofit lawyer licensed to practice in Washington and Arizona. Ellis advises tax-exempt clients on federal tax matters nationwide.