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Political Activity Guidelines for
Catholic Organizations

15 March 2004

The following document is provided by the USCCB Office of General Counsel in order to assist (arch)dioceses, parishes, and other Catholic organizations ("Catholic organizations") that are exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code ("IRC") in distinguishing activities that are permitted during election campaigns from activities that are prohibited. This guidance focuses primarily on section 501(c)(3) of the IRC, because it contains a prohibition, which has been interpreted as absolute, against participation or intervention in a political campaign on behalf of or in opposition to any candidate, as a condition of maintaining federal income tax exemption.

General guidance cannot anticipate every conceivable fact pattern. Nor can it substitute for the advice Catholic organizations should receive from their own attorneys, because application of the political campaign activity prohibition is inherently fact-specific and frequently presents close questions. An (arch)diocese or parish with questions about a particular activity should contact its (arch)diocesan attorney prior to engaging in that activity. Other Catholic organizations should contact their own legal advisors.

Table of Contents

Political Campaign Activity Prohibition

Lobbying Limitation

Origins of the Political Campaign Activity Prohibition

First Amendment Considerations

Lobbying v. Political Campaign Activity

Legislation

Ballot Measures

Lobbying Election

Individual Political Campaign Activity

Attribution of Individual Activity

Candidate

Public Office

Activities Prohibited

Specific Situations

Appearances at Church Events

Bumper Stickers

Campaign Materials

Collecting Signatures

Columnists

De Minimis Activity

Educating Candidates

Educating Voters

Endorsements, Statements of Opposition

Financial Support

Fundraising

Letters to Editor

Loans

In-Kind Support

Internet Activities

Issue Advocacy

Mailing Lists

News Stories

PACs

Paid Political Advertising

Parking Lots

Photo Ops

Polling Places

Public Forums, Debates, Candidate Nights

Pulpit Appearances

Rating Candidates

Renting Facilities

Signs on Church Property

Student Activities

Voter Guides - Candidate Questionnaires

Voter Guides - Incumbents Voting Records

Voter Registration, Get-Out-the-Vote Drives

Websites
Enforcement

Targeting

FECA, Other Laws




What does section 501(c)(3) of the IRC say about political campaign activity? Section 501(c)(3) of the IRC prohibits organizations that are exempt from federal income tax under its provisions, including Catholic organizations exempt under the USCCB Group Ruling, from participating or intervening in political campaigns on behalf of or in opposition to any candidate for public office. As noted, this prohibition has been interpreted as absolute.

How does the IRC limit lobbying activity by Catholic organizations? The IRC limits the amount of lobbying in which section 501(c)(3) organizations may engage. Under section 501(c)(3), Catholic organizations may engage in lobbying activities only if they do not constitute a substantial part of their total activities, measured by time, effort, expenditure and other relevant factors. Neither the IRC nor the regulations define what is "substantial" in this context. A few cases suggest that the line between what is substantial and what is insubstantial lies somewhere between 5% and 15% of an organization's total activities. IRS does not endorse any particular percentage safe harbor, but would clearly be more comfortable at the lower end of the spectrum. [See: Murray Seasongood v. Commissioner, 227 F.2d 907 (6th Cir. 1955) (less than 5% time and effort was not substantial); Haswell v. U.S., 500 F.2d 1133 (Ct.Cl. 1974), cert. denied, 419 U.S. 1107 (1975) (16-20% of budget was substantial).]

Where did the political campaign activity prohibition come from? Contrary to popular belief, the section 501(c)(3) political campaign activity prohibition is not a manifestation of Constitutionally-mandated "separation of church and state". The prohibition applies to all section 501(c)(3) organizations, not just churches and religious organizations. The political campaign activity prohibition was introduced by then-Senator Lyndon B. Johnson during Senate floor debate on the 1954 version of the tax code. LBJ appears to have been reacting to the support provided Dudley Dogherty, his challenger in the 1954 primary election, by certain tax-exempt organizations. There is no legislative history to explain definitively why LBJ sought this amendment to the IRC. However, there is no evidence that religious organizations were his targets. [See: Judith Kindell & John Reilly, Election Year Issues, FY 2002 IRS Exempt Organizations Technical Instruction Program at 448-451 (August 2001) (hereinafter "Election Year Issues"), http://www.irs.gov/pub/irs-tege/topici02.pdf; Patrick L. O'Daniel, More Honored in the Breach: A Historical Perspective of the Permeable IRS Prohibition on Campaigning by Churches, 42 B.C.L.Rev. 733 (2001); Deirdre Halloran & Kevin Kearney, Federal Tax Code Restrictions on Church Political Activity, 38 Cath.Law. 105, 106-108 (1998).]

Doesn't the First Amendment protect the rights of Catholic organizations to engage in political campaign activity? As part of the federal tax law, the section 501(c)(3) political campaign activity prohibition is not an absolute prohibition against political activity by tax-exempt organizations. Rather, it is a condition placed on the receipt of federal tax exemption. Thus, an exempt organization has a choice between involvement in political campaign activity and the benefits of tax exemption. Because of this distinction, courts have not been sympathetic to claims by religious organizations that the section 501(c)(3) political campaign activity prohibition violates First Amendment rights. For example, a few years ago the application of the political campaign activity prohibition to revoke the section 501(c)(3) tax exemption of a New York church was upheld in the face of the church's challenges under the free exercise clause of the First Amendment and the Religious Freedom Restoration Act. [See: Branch Ministries v. Rossotti, 211 F.3d 137 (D.C. Cir. 2000).]

What is the difference between lobbying and political campaign activity? In the most basic terms, lobbying focuses on legislation, whereas political campaign activity focuses on candidates and campaigns for election. Lobbying includes both direct lobbying and grassroots lobbying. Direct lobbying means contacting members of a legislative body, whether federal, state, or local, for the purpose of proposing, supporting, or opposing legislation or advocating the adoption or rejection of legislation. Grassroots lobbying means urging members of the public to do the same. Section 501(c)(3) limits the amount of lobbying a Catholic organization can do, It does not prohibit lobbying outright, as is the case with political campaign activity. The lobbying limitation applies both to lobbying that is germane to an organization's tax-exempt purposes and to lobbying that is not. [See: Treas. Reg. § 1.501(c)(3)-1(c)(3)(ii); Rev. Rul. 67-293, 1967-2 C.B. 185.]

What is considered "legislation"? Legislation means any action: (a) by Congress, a state or local legislative body; or (b) by the public in a referendum, initiative, constitutional amendment or similar procedure. [See: Treas. Reg. § 1.501(c)(3)-1(c)(3)(iii).]

Are ballot measures lobbying or political activity? Ballot measures, including referenda, initiatives, constitutional amendments, and bond measures, are considered legislative proposals. Thus, involvement by Catholic organizations in various forms of ballot measures is limited, not prohibited. Catholic organizations may support or oppose ballot measures, etc., in furtherance of their exempt purposes, subject to the relevant lobbying limitation, without jeopardizing tax-exempt status.

What is the "lobbying election"? Can Catholic organizations make the lobbying election? In 1976, Congress enacted section 501(h) of the IRC, which is an elective provision that established a sliding scale of permissible lobbying expenditures based on an exempt organization's total budget. However, at their own request, churches, conventions or associations of churches, and integrated auxiliaries of churches were made ineligible to elect treatment under section 501(h). Thus, (arch)dioceses, parishes and many other Catholic organizations are not eligible to make the section 501(h) lobbying election, and remain subject to the general "substantiality" test, i.e. only an insubstantial amount of their activities can be devoted to lobbying. [See: I.R.C. §§ 501(h)(5) and 4911(f)(2).]

Does the political campaign activity prohibition apply to individuals? Section 501(c)(3) of the IRC applies to organizations, not individuals. Accordingly, the political campaign activity prohibition applies to Catholic organizations, not to leaders, employees or members acting in their individual capacities. The 1991 IRS-approved press release announcing its settlement with Jimmy Swaggart Ministries over political campaign activities undertaken during the 1986 presidential campaign stated that if an endorsement or statement of opposition occurs during an official organizational function or in an organization's official publication, the endorsement will be attributed to the organization. Thus, the political campaign activity prohibition does not prevent officials of Catholic organizations, acting in their individual capacities, from becoming involved in political activity, provided they "do not in any way utilize the organization's financial resources, facilities or personnel, and clearly and unambiguously indicate that the actions taken or statements made are those of the individuals and not of the organization." [See: Public Statement of Jimmy Swaggart, President, Jimmy Swaggart Ministries (December 7, 1991); Election Year Issues at 363-4.]

When will an individual's actions be attributed to a Catholic organization? Organizations act through individuals. Thus, when officials of a Catholic organization engage in political campaign activity at official functions (e.g., worship services and other official events) of the organization or through the organization's official publications, e.g., parish bulletin or (arch)diocesan newspaper, the political campaign activity will be attributed to the Catholic organization. [See: Election Year Issues at 364.]

Contact

United States Conference of Catholic Bishops
http://www.usccb.org DC, US
United States Conference of Catholic Bishops - Publisher, 202 541-5413

Email

info@yourcatholicvoice.org

Keywords

Catholic, Democracy, Politics, USCCB, Bishops

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