playing by the rules, keeping the faith: congregations and elections

7/30/2019 Playing By The Rules, Keeping The Faith: Congregations And Elections

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Playing by the Rules,Keeping the Faith:

Congregations and Elections

a primer from the

Texas Interfaith Center for Public Policy



DisclaimerThis 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 havea specific legal question, the services of a legal processional should be sought. Thelegal staff of the Texas Interfaith Center for Public Policy would be happy to help orrefer you to another legal professional.



This Presentation Covers…

• Why elections and voting are important to our faiths

• Common questions and concerns about congregationalpolitical activity

• What the law says about congregations and election-year

advocacy • Examples of permissible and non-permissible election

year activities for congregations

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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 befound in his power or in his position. It really rests on hisright to be treated as a man equal in opportunity to allothers. It says that he shall share in freedom, he shall

choose his leaders, educate his children, provide for hisfamily according to his ability and his merits as a human being.”— Lyndon B. Johnson, March 15, 1965, TheVoting Rights Act Address

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Why elections and voting are important to our faiths What the Faith Community Brings

• Source of reliable, neutral information about theprocess

• Safe space to ask questions and learn

• Remind all members of the importance of voting

• Assistance to the needy

• Watchful eyes on the proceedings

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Common questions and concerns 1. Talking about the elections with my

congregation will be divisive.

• Not if it’s 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 individualactivities

– Engaged members=opinions

– Neutral congregation=information

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Common questions and concerns 2. Don’t the IRS rules against electioneering by 501(c)(3)nonprofits restrict our congregation’s free speech?

No—the rules just protect the individual taxpayer from subsidizingsomeone else’s 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 donations—so donors

can be confident their dollars are supporting the services they choose, and not being used to fund a political campaign donorsmight not even support.

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Common questions and concerns 3. Don’t the IRS rules restrict our congregation’sfree exercise of religion?

No—religious 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 scientificorganizations.

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Common questions and concerns

4. What happens if a congregations breaks therules, 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 excisetax 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 thecongregation or its based on facts described in the media.

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So how restricted are we

really?

Not much. Only from being

partisan.



What the law says What are the federal requirements relating toelections for a 501(c)(3) organization?

“Corporations…operated exclusively for religious…purposes…[shall be exempt if it]…does notparticipate in, or intervene in (including the

publishing or distributing of statements), any political campaign on behalf of (or inopposition 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: Don’t do anything that benefits (orhinders) a candidate.

That’s it.

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What the law says

I want my congregation to be involved in an election-yearproject, but I’m afraid it’s against the rules.

1. Does it involve your congregation as an entity? (as opposed toindividuals)

2. Does it involve a candidate? (as opposed to an issue)

3. Is the candidate for elected office? (as opposed to an

appointed position)

The rules against political activity only apply if the answerto all three questions is “yes.”

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EXAMPLES

of permissible and non-permissible election yearactivities for congregations



Example 1

Denomination X spends millions to push aconstitutional amendment supporting a water proposition.

Is this permissible?

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Yes and here’s 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 acandidate. – Caveat 1: 501(c)(3) lobbying rules apply—these say lobbying can’t be a

“substantial” share of your budget (an unlikely scenario for acongregation).

– Caveat 2: if there were no ballot proposition, but simply a sermon onthe 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 Y’s campaign rally at thelocal chamber of commerce. Candidate says “PastorDave, 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 picksup the story and identifies Pastor Dave as minister of My Local Congregation.

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Yes and here’s 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 aren’t saying“Pastor Dave of Your Local Congregation, calling to say vote for…”

• Pastor uses church Xerox machine to copy candidate’s materials? NOTokay.

Caveat: if you are clergy or an employee of a congregation, make it clear youare 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 saveyour attorney some heartburn, start your remarks by clarifying, “I’m herein 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 Baccepted the invitation. The clergy leader

introduces Candidate B, but makes no editorialcomment.

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It’s okay because the congregation invited all the candidatesfor that office and made no editorial comment in theintroduction, 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 thecandidate or indicate congregational approval of them.

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Example 4

Congregation A has a member, Bob, who is running forcity council, and who is also an expert in financialadministration. Congregation leaders invite Bob — andonly Bob —to come talk to their congregation on churchfinance. Congregation A promotes the event and statesin the advertisement “come hear Bob, candidate for city council, talk about church finance.”

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No, but here’s why:

Everything about this example would have been perfectly permissible, but for the fact they mentioned in theiradvertisement that the speaker was a candidate for office. Thespeaker was invited for his expertise on church finance. Thefact that he was a candidate for office was irrelevant to the

presentation and benefited that candidate over another.Caveat: “Dignitaries in the Congregation” - It’s also okay toacknowledge a current elected official who is running foranother 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 theincreasing cost of living in his city and wantsto run for city council.

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It’s okay because Rev. M is exercising theirindividual right to run for office.

Caveat: Keep things very separate!

– In worship never mention candidacy – Keep fundraising & expenditures separate

• Don’t 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 educationguide” of candidates encompassing a broad range of issues. They sent questionnaires to every candidateand printed all those returned with answers. They

included no editorial comment.

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The voter guide is okay because the congregation didnot include any information or interpretationother than the candidates’ exact words, and they sent the questionnaire to every candidate.

Caveat: It’s important that the questionnaire covera broad range of issues, and that there be noeditorial comment.

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Example 7

Congregation C publishes the voting recordof several incumbents. The voting recordscover a broad range of issues and contain no

editorial comment.

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Yes, but caution and here’s why:

This congregation published a stand alone piece with only voting records. The congregation didnot include any editorial comment or expression of preference in the voting records andthey included votes on several different issues. When publishing a voting record, context

becomes really important in answering the question of this example’s permissibility.

Caveat 1: Voting records become tricky when combined with campaigns because comparisons oftenare 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 norecord at all.

Caveat 2: When combining a voting record with other literature, the risk becomes higher as thecontent of the voting record will be compared with the other literature in an examination forbias. Never ever couple one with the church’s social positions on issues.

Caveat 3: Other factors IRS will examine is whether the voting record mentions an individual’scandidacy, as well as the timing, manner, and circumstances in which a voting record isdistributed 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 anddistribute a nonbiased voter guide. The

moderator is trustworthy in her unbiasednessand gives each candidate equal opportunity.

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Yes, and here’s why:

It’s okay for the congregation to hold a candidate forum as longas all candidates are invited, a broad range of issues iscovered, there is no comment on candidates’ responses, thechurch’s views on issues are NOT discussed, the moderator isindependent and nonpartisan, and each candidate gets equalopportunity.

Caveat: Be sure you have a moderator whom you can trust toensure fair administration of the event.

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Example 9

One political party’s county coordinated campaignprepared a nonbiased voter education guide for501(c)(3) groups that Congregation X’s leader readsand finds it completely unbiased. The leader plans to

distribute the guide to congregation members.

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NO! and here’s why:

It’s never okay for a congregation todistribute materials prepared by a politicalcampaign. Materials produced from

campaigns are deemed to be inherently biased, even if they were prepared as acourtesy and/or they seem really unbiased.

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Example 10

Congregation X decides to use their van to drive peopleto the polls who need a ride during both early voting andon election day. A county political party staffer calls andasks if they can refer people to Congregation X if they need rides. The congregation leader says “I’ve already

told the County Elections office we are willing to give aride to anyone who needs it.”

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It’s okay because the congregation has made clear that it is notcooperating with any campaign and is happy to drive anyone to thepolls 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 arenonbiased.

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Example 11

Congregation C allows a candidate for office touse its facilities free of charge. Thecongregation does not charge local groups like Alcoholics Anonymous or the Boy Scouts for

use of their facilities.

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No and here’s why:

It’s not okay to let a candidate or party usecongregational space for free, even if you do that forcommunity groups. It is okay to rent space tocandidates 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 advertiseor 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. Whena candidate from the other party asks for ad spaceand the list, they reluctantly agree to sell.

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It’s okay if the congregation treats the political party or candidateexactly like any other, nonpolitical advertising, including chargingthe same rates. In addition, the ads must be identified as paidpolitical 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 anyonewho wants to advertise because a congregation may not selectivelydecline ads. Finally, income from such advertisements is subject tounrelated business income tax.

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Example 13

Congregation Z is very involved in a particular issue. Thecongregation’s leader has formed a separate 501(c)(4)and hired a full-time lobbyist. A wealthy congregationmember wants to help pay the lobbyist’s salary, but alsoreally 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.”

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No and here’s why:

• It’s never okay to transfer money from a501(c)(3) nonprofit to a 501(c)(4) becauseit circumvents the restrictions that are

supposed to protect the taxpayers whosubsidize 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 CounselTexas Interfaith Center for Public Policy

(512) 472–3903

playing by the rules, keeping the faith: congregations and elections

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