On January 15, 2006, a group of 31 clergy from Ohio wrote a letter to IRS Commissioner Everson to complain about political intervention by several 501(c)(3) organizations (charitable or religious organizations) in Ohio. The clergy allege that the World Harvest Church, the Fairfield Christian Church, and some related organizations are violating their 501(c)(3) status by intervening in the Ohio gubernatorial election on behalf of Kenneth Blackwell, the current Secretary of State of Ohio. Although we have discussed political intervention by 501(c)(3) organizations before, the recent allegations shed an interesting twist on the issue.
It is clear that under existing law, 501(c)(3) organizations are prohibited, as a condition of their exempt status, from intervening in a campaign for or against a candidate for public office. There are no ifs, ands, or buts. These organizations have no First Amendment Right to engage in such speech, as the prohibition against intervention in a political campaign is merely a condition for receiving exempt status. If an organization wants to engage in advocacy on behalf of a candidate, it may forgo (c)(3) status and engage in political intervention (subject to campaign finance laws). Failure to comply with the limitation on political intervention can lead to the revocation of an organization's exempt status.
The prohibition on intervention in political campaigns is extremely important for our democratic process. Section 501(c)(3) organizations are not only tax exempt, but contributions to them are tax deductible. Thus, all taxpayers share in the burden of providing a subsidy to 501(c)(3) organizations. This subsidy makes it wholly inappropriate for charitable and religious organizations to promote candidates or political parties. If 501(c)(3) organizations are allowed to do so, they would be the only organizations that received a taxpayer subsidy to engage in electioneering activity for or against a candidate. Such a preference might be unconstitutional, but it also would be a risk to the democratic process by providing a taxpayer-subsidized preference to some voices over others.
So the question is not whether these organizations are allowed to intervene in the gubernatorial race. They clearly are not. The question is whether they have engaged in such activity.
The clergy allege three basic activities that they contend violate the prohibition on intervention in a campaign. First, the clergy allege that the Ohio organizations have endorsed Kenneth Blackwell for Governor. This is probably the most serious of the clergy's allegations because it goes to the heart of the prohibition on campaign intervention. Charitable and religious organizations simply cannot endorse candidates, either explicitly or implicitly.
The organizations appear not to have explicitly endorsed candidates, but they allegedly have engaged in several activities that would appear to violate the prohibition. First, the organization has invited Secretary Blackwell to events and rallies without inviting all the other candidates for Governor. Moreover, the clergy allege that at one of the events a person invited to speak by the organization personally endorsed Blackwell for Governor. 1 A charitable organization may invite a candidate to speak to the organization, but it may not show preference for one candidate over another and must provide an equal opportunity for candidates seeking the same office. 2
There is an exception to the above rule when the candidate is appearing as a "non-candidate." This occurs when the candidate is also a public figure and is speaking in his official role. Blackwell does not appear to be performing an official function as Secretary of State at these functions so this exception would not apply. It is less clear, however, what happens when the public figure is speaking on behalf of an initiative or a Constitutional Amendment. Section 501(c)(3) organizations are allowed to engage in a limited amount of lobbying for initiatives and legislation. If Blackwell was appearing due to his support of various initiatives, his presence at the events might not be campaign intervention. Repeated invitations to Blackwell in the midst of his campaign for Governor, however, may amount to intervention in a campaign.
Moreover, the endorsement of Blackwell at one of the group's events, even if not by a member of the organization, should be considered an endorsement by the organization unless the organization took steps to distance itself from the endorsement. The organization invited the speaker, and while it cannot control what a speaker says, it can make sure that it makes it clear that the speaker's comments are not an endorsement from the organization. Otherwise, organizations could avoid these restrictions by inviting numerous "guests" to endorse candidates.
Second, the clergy allege that the church or its associated organizations have engaged in partisan voter registration drives. Under the existing IRS interpretations of campaign intervention, a 501(c)(3) organization may engage in nonpartisan voter registration drives. The IRS uses a facts and circumstances approach and considers several factors including: (1) whether the communications appear to endorse a candidate or party, (2) whether the communication or activities are limited to encouraging people to vote, and (3) whether the material is available without regard to the voter's political preference.
It is less clear what happens when an organization explicitly follows the above guidelines but is implicitly supporting a party or candidate. Since the IRS uses a facts and circumstances approach, one can literally follow the rules above and still be engaged in partisan voter registration. The clergy's allegation is that the 501(c)(3)s at issue have made comments indicating that their voter registration drives serve partisan interests. Specifically, the clergy allege that the organizations are attempting to register only Christian voters who share their views. 3 It is unclear, however, whether a voter registration drive aimed at a specific group of people is partisan just because that group normally votes a certain way. If it were considered improper, then voter registration by the NAACP would also likely be campaign intervention.
Lastly, the clergy allege that the Ohio organizations have engaged in improper partisan voter education drives. This is the area where the IRS has probably published the most guidance, and where, if the facts as alleged are true, the Ohio organizations have clearly gone over the line. The clergy allege that the Ohio organizations are distributing voter guides from the Christian Coalition 4 and other organizations that are limited to specific issues of interest to those organizations. In Rev. Rul. 78-248, the IRS ruled that it is permissible for 501(c)(3) organizations to distribute voter guides that are unbiased and broadly cover general campaign issues. The IRS further noted, however, that it is impermissible for a 501(c)(3) organization to distribute voter guides where the questionnaire is biased and/or the voter guide presents "one area of concern." It is clear from the ruling that distribution of a voter guide that selectively presents issues to promote an agenda is improper intervention in a political campaign.
The problem for the Ohio groups may not be that one specific action is campaign intervention, but that the magnitude of their activities and their willingness to push their activities right up to the line (or over it), makes it highly likely (if the facts alleged are true) that they have violated the prohibition on campaign intervention. 5 Moreover, in recent inquiries involving All Saint's Church in California and the NAACP, the IRS appears to be applying a strict test for campaign intervention. In the All Saint's Church example, the visiting pastor gave a sermon on what Jesus would say to Bush and Kerry. The IRS indicated that the sermon was improper political intervention because its criticism of Bush was intervention. If All Saint's activities were worthy of investigation, it is impossible to see how the activities of the Ohio organizations do not at least warrant a similar investigation. In all respects, their activities appear to be more aggressive and more political than the actions by All Saint's Church.
On a final note, the clergy here have complained to the IRS about a violation of Federal tax law. The clergy argue that the organizations have violated the rules that enable them to be 501(c)(3) organizations. Some of these organizations may have also violated their articles of incorporation. Reformation Ohio's corporate charter (referred to in Ohio as articles of incorporation) indicates that it will not intervene in a political campaign. This language mirrors the language in 501(c)(3). But the State, not the IRS, is charged with ensuring that corporations do not violate their own charter. It appears that under Ohio law, the Governor, Attorney General, Secretary of State, or a local prosecutor can investigate to see whether an organization is violating its charter. Thus in this instance, they would have the authority to investigate whether Reformation Ohio is improperly engaging in intervention in a political campaign. So it may be that there is a role for State officials, as well as the IRS, to police political campaign intervention by nonprofit organizations and to investigate the clergy's complaint.
1. See Stephanie Strom, Group Seeks I.R.S. Inquiry Into 2 Ohio Churches Accused of Improper Campaigning , N.Y. Times, January 16, 2006, at A9.
2. IRS Publication 1828, at 8.
4. The Christian Coalition is a 501(c)(4) organization and it may intervene in a political campaign on behalf of a candidate. Therefore, the Christian Coalition may distribute partisan voter guides.
5. Fairfield Church also allowed the Republican Party Central Committee to meet at the church free of charge. Carl Tatman, the committee chair was quoted in the New York Times as saying that the free space was a "donation." Contribution of free space to the Republican Party is a clear violation of Fairfield 's 501(c)(3) status. See Strom, surpa n. 1.