Gene Takagi: Election Year Activities
In this presidential election year, everything related to politics is prohibited, right? Not so fast. It’s not that simple. There are actions you can take, including lobbying on ballot measures. As long as you follow the rules. There’s no one better to explain those rules than Gene Takagi, our legal contributor. He’s the managing attorney of NEO, the Nonprofit & Exempt Organizations law group.
Listen to the podcast
Podcast: Play in new window | Download
Get Nonprofit Radio insider alerts!I love our sponsors!
Donorbox: Powerful fundraising features made refreshingly easy.
Virtuous: Virtuous gives you the nonprofit CRM, fundraising, volunteer, and marketing tools you need to create more responsive donor experiences and grow giving.
We’re the #1 Podcast for Nonprofits, With 13,000+ Weekly Listeners
Board relations. Fundraising. Volunteer management. Prospect research. Legal compliance. Accounting. Finance. Investments. Donor relations. Public relations. Marketing. Technology. Social media.
Every nonprofit struggles with these issues. Big nonprofits hire experts. The other 95% listen to Tony Martignetti Nonprofit Radio. Trusted experts and leading thinkers join me each week to tackle the tough issues. If you have big dreams but a small budget, you have a home at Tony Martignetti Nonprofit Radio.
View Full Transcript
And welcome to Tony Martignetti nonprofit radio. Big nonprofit ideas for the other 95%. I’m your aptly named host and the pod father of your favorite abdominal podcast. Oh, I’m glad you’re with us. I’d be forced to endure the pain of chronic inflammatory demyelinating, poly ridicule, neuropathy. If you attacked me with the idea that you missed this week’s show, here’s our associate producer, Kate with what’s coming? Hey, Tony, it’s election year activities in this presidential election year. Everything related to politics is prohibited, right? Not so fast. It’s not that simple. There are actions you can take including lobbying on ballot measures. As long as you follow the rules, there’s no one better to explain those rules than Gene Taghi. Our legal contributor. He’s the managing attorney of Neo, the nonprofit and exempt organizations Law Group on Tony’s take two 24 NTC is next week were sponsored by donor box, outdated donation forms blocking your support, generosity, donor box fast, flexible and friendly fundraising forms for your nonprofit donor box.org and by virtuous, virtuous, gives you the nonprofit CRM, fundraising, volunteer and marketing tools. You need to create more responsive donor experiences and grow giving. Virtuous.org here is election year activities. It’s always a pleasure to welcome back our legal contributor, Gene Takagi. He’s the managing attorney of Neo, the nonprofit and exempt organization’s law Group in San Francisco. He edits that wildly popular nonprofit law blog.com that you should be following. And he is a part time lecturer at Columbia University. The firm is at Neola group.com and he’s at GT A. It’s good to see you, Gene. Welcome back. It’s great to be back, Tony. It’s great to see you as well. Thank you. It’s always a pleasure. I don’t mind saying it twice. I’ll say it a third time. It’s always a pleasure. And this one particularly because it’s our uh what this be our quadrennial every fourth year. Uh And you’ve been on the show for many, many years, we’ve done this several times in our presidential election cycle. It’s time to talk about uh what’s permissible and what’s not permissible around political activity. So let’s start with the upside that. I think a lot of folks may not be aware of even though we’ve, we’ve said it before, but it’s been four years to be fair. It’s been four years since we’ve talked about this um that uh nonprofits can do lobbying and uh and a decent amount of it too. Yeah, it’s, it’s so under recognized. I’m glad you’re bringing it up. There’s a study that came out um recently, but it was about the 2017 and 2018 years, about how many charities out of the more than million charities that registered with the IRS and report to the IRS, how many actually report doing lobbying and it’s fewer than 10,000. So that’s less than 1% have reported lobbying uh, as any part of their activities. And I think part of it stems from, you know, 501 c three kind of says in, in more legalese kind of uh verbiage. Hey, you can engage in substantial lobbying. Yeah. You know, that terrifies, you know, a lot of charities go, oh my God, we can engage in substantial lobbying. What does that mean? What, what, what does substantial mean? And so we better not do any of it and it keeps everybody away from it completely. It just, and then they just default to nonprofits can’t do lobbying. Yeah, exactly. And, you know, lawyers are, are not, you know, are, are, are a little bit complicit in this as well because, you know, when they’re not sure about this thing and if you don’t practice exclusively in the areas that, like, I practice it, why would, you know that, well, you know, substantial can mean a lot of different things depending upon the test you elect to, to fall under. So you’d probably say, well, you know, just to be on the safe side, better not lobbying, but that’s actually terrible advice for public charities. So let, let’s, uh, let’s debunk this insidious myth. Yeah. And, and let’s raise up, there is great reasons for charities to lobby, especially right now. I mean, we’re at a pivotal time when a lot of rights are up at issue and charities may have like very strong views about those rights, whether it be women’s rights or whether it be first amendment rights or whether it be environmental rights. I mean, there’s just a lot up in the air right now where charities and, you know, charity beneficiaries and charity supporters really have a strong point of view and they’re afraid to share it through the charity. So let’s add in LGBT Q and trans rights. Yeah, absolutely. And, you know, we can create a whole, a whole list of other rights as well. Charities, you know, span span the spectrum of, of all sorts of things. And so, um yeah, you know, when you have something to say, being chilled and in fear of saying it because you don’t know whether the law allows you to or not is, is terrible. So glad you’ve provided kind of the, the, the place where we can talk about it and say, hey, ok, what can charities do? And so the, the first thing to know about is there’s sort of two tests and the default test is if you have done nothing except, you know, kind of reported with the IRS regularly, your nine nineties as you’re supposed to do, you haven’t made any sort of election to, to, to do lobbying or measure lobbying in a different way. It’s called the substantial part test. So what does substantial mean? And the best guidance we have on that is like a case from the fifties. So understandable why people are concerned about it. But hey, there’s been a lot, just in the past few months, there’s been a lot of talk about going all the way back to Marbury versus Madison in the 17. No, it was 17, late 17 hundreds. It’s very old. I, yeah, I didn’t look it up. But, so, you know, that like when, when the Supreme court reporter was, was cranch, cranch, remember that? All right. Now, I’m getting a little in the weeds of law school stuff but the, the before hundreds of years ago there was a, a reporter that used to do the Supreme Court opinions and the name of that reporting volume was branch. So it just sounds like, uh, you know, it just sounds like something from Pioneer Days branch anyway. So the 19 fifties, you know, it’s pretty recent consider compared to Marbury versus Madison and Ranch. It is. But then, you know, just what’s happened over the last five years has been like event. So, um, but I think we can kind of rely on it for, you know, a rule of thumb. Like if you spend more than 5% of your total budget on lobbying, you’re probably safe any more than that you might be crossing the line. This is under the substantial part test, total budget, you said total total budget or total expenditure. So let’s say you, you spend $100,000 and if you spend 5000 of that, $100,000 on lobbying, you’re probably safe. Um The better way to look at that is probably not just a percentage of your expenditures. So it’s percentage of the resources that are going into it. So if, if you know, 5% of your total resources expended, not just money, but volunteer time and everything else. Um If it’s more than 5% you might have some issues with the substantial part test. The IRS isn’t really enforcing on this very hard. I, I would say they’re actually very poorly enforcing this. They’re openly non compliant, especially churches out there that are saying go ahead, sue us or take us to court. We want to go, we want to take this to the Supreme Court anyway and see if there is a constitutional basis for, you know, this political campaign intervention, prohibition often referred to as the Johnson amendment. Um But you know, it is what the law says right now. So more than 5% maybe you have an issue there, be careful. Ok. And again, it’s 5% of total resources expended. I would say that’s your total resources, not your, not your, not just your budget. I, I would say that is the better way to look at the case in the fifties, total expenditures only. Um So now the other way to, to do, to measure lobbying and whether it’s substantial or not is the way that we recommend the vast majority of charities to choose. Um And it’s something called the 501 H election. And I know we’ve talked about this before as well. So by electing the 501 H expenditure test, um it means that lobbying isn’t measured on all the facts and circumstances. So it’s not like a complete resource test of like how much of your total resources which involves a lot of thinking, right, volunteer time and like your office space. And like, so the expenditures test says, well, it’s too hard to do all of that. So if you elect this and it’s a very, very simple form, it’s about half a page long. Um and it’s basically name and check the box and address. So it’s super simple. If you elect it, then you have strict sort of requirements of what is substantial and what is not substantial. And so it’s very clear and it’s just based on expenditures. And in this test, you’re allowed to expend up to 20% of your 1st $500,000 in expenditures um on lobbying and it’s not considered substantial. So not 5%. Now, we’re talking about 20% of your 1st $500,000 and this is on your exempt purpose expenditures or your mission related expenditure. So it doesn’t include things like investments and stuff. So, on your mission related expenditures, you’re allowed to spend 20% of your 1st 500,000 15% of your next 500,000 10% of your next 5% of the remaining up to a total cap of $1 million in lobbying, which you’ll hit at about the 17 to $18 million range of mission related expenditures. You’re gonna, you’re gonna hit the limit, um, based on those formulas at about uh 1 million, the $1 million cap at about 17 to $18 million of mission related expenditures that is not substantial. So that’s a pretty generous amount of lobbying that’s allowed. This is right. Right. This is a, this is a good bit. Now, we, we didn’t say the name of the form. It’s the, it’s IRS form 5768 and 55 768. And it is, uh, it’s, you left out one little item. You have to put the end of the tax year that you want the election to choose to be for. But it’s so simple. It is like, it’s, it’s like a third or a half. It’s, I think two thirds of the page is the instructions and one third is the election. It’s just, it’s, it’s a name, address, end of the tax year and your signature. And it’s, and what’s great about it too is you can elect on December 31st for it to apply retroactively for that whole year. So you can make your decision last moment and say, hey, we want to fall under this expenditure test. We don’t like to think about all the facts and circumstances. We’re a charity that has less than a 17 or $18 million annual budget. Most of the listeners here probably fall into that category. Um So the 501 H election just makes things simpler and it allows you to lobby safely within the tax law limits that you’re allowed to without jeopardizing your 501 C three status. And now you can go ahead and fight including lobbying, which doesn’t mean paying a lobbyist, right? It means stating your position on your website on a particular bill saying, hey, this law should change or we need this new law or we need a budget increase that requires our city council to prove this like budget, that’s legislation as well. So if you have a position on it, it’s lobbying, charities should not be afraid to lobby like you can lobby and the limits are fairly generous, especially if you take that 501 H expenditure test. The form is available online 5768 as you said, super simple. And if you don’t like it, let’s say you grew to, to become a $50 million charity next year and you don’t like that $1 million cap anymore. You can elect out of it. Just the same, it’s elected in. So it’s super simple. Same form, yes, same form to elect out if you, if you bust the uh bust that, that limit uh or that, you know, that rough, rough uh expenditure number. Um The other thing you mentioned casually, I want to emphasize, this includes local lobbying, local local issues. This is not only our biggest national issues like first amendment and, and uh reproductive rights. This could be a local council thing like a, like a budget or uh or um now, now uh lobbying can be now, uh I’m spilling over now. Can that be there’s not candidate advocacy, right? Like not, not getting into supporting candidates or denouncing candidates. This is all about issues. This is issue lobbying. So we’re gonna get the candidates, we’re gonna come to candidate, mostly prohibitions, but some things as long as they’re anyway, I don’t want to spoil the, I don’t want to take away your, your info, but we’re gonna get the candidates very shortly. But this is, this could be very local issues like you said, like a budget or a zoning, a zoning thing. Yeah. Anything that’s gonna appear by a legislative body that appears, you know, in the law, you can comment on existing law, you can ask for a change on that. You can propose a new law or back a new law that’s coming out. You don’t have to hire a lobbyist. It might just be a communication, uh, that you put on your website that’s lobbying. It’s probably really low cost if you’re gonna like, tweet it, uh, or email, email campaign, print mail campaign if you want to go to that extent. Yeah, this is all, this is all well, within your, uh, what’s allowed, well, within your purview and just take the 501 H, now, do we have to know what 501 H says, does that matter? Do, do we have to go into what 501 H says, or just, just fill out the form? Yeah. So you just know that you’re electing to measure your lobbying under the 501 H expenditure test. That’s basically what it says. So you’re electing to measure lobbying, not on all the facts and circumstances test that the IRS and then the court would have to apply if you ever, you like argued about it. Uh just strict numbers and you know what the numbers are, you fill them out. So you’ll know exactly what happens and even better if you don’t make the election and you, you use the substantial part test, the 5% rule of thumb uh test. If you are ever examined by the IRS and you cross that threshold, they can revoke your 501 C three status for crossing that threshold in one year under the 501 H election that doesn’t happen. There may be a penalty tax applied to you in, in any given year, but you actually have to, to, to exceed that cap over four years. Um, and that’s significant. Ok. Ok. Well, you did say the IRS is not in actively enforcing this. Um, not that they’re never going to, but they’re not being very proactive about it. But still you get, you get a four year window under the 501 H test versus just a one year window in the facts and circumstances which is limited to only 5% too. There is an added wrinkle though to the 501 H test. Oh, here it comes now. All right. Read the foot. You gotta always read the footnotes. All right. Now what? It’s time for a break. Open up new cashless in person donation opportunities with donor box live kiosk. The smart way to accept cashless donations anywhere. Anytime picture this a cash free on site giving solution that effortlessly collects donations from credit cards, debit cards and digital wallets. No team member required. Plus your donation data is automatically synced with your donor box account. No manual data, entry or errors, make giving a breeze and focus on what matters your cause. Try donor box life kiosk and revolutionize the way you collect donations in 2024. Visit donor box.org to learn more. Now, back to election year activities. Gene and I just had uh technical difficulties which means uh since he lives in a big city and I live in a suburban beach town. Uh, my wi fi just cut out. So our sound is not gonna be as good as it was because now we’re recording on my phone. But as, you know, nonprofit radio perseveres through these minor technological let downs we, the, these things, these things don’t trouble nonprofit radio at all. So we’re still gonna, we’re gonna continue. Gene was, uh, Gene. I’m just gonna let you pick up, go ahead. Terrific. And we know charities have resilience as well. Um So under the 501 and under the 501 H expenditure test that we’re recommending to most charities. Um uh there are a couple of wrinkles. So one of the wrinkles is, is that there’s two types of lobbying, direct lobbying where you’re contacting uh uh a legislative body directly and asking for a change in the law or introduction of a new law. Um and grassroots lobbying when you’re telling your public to contact a legislator or legislative body to change the law. And so in grassroots lobbying, there’s going to be some sort of call to action. It’s going to be the charity expressing a particular view on a specific piece of legislation with a call to action to the public without that call to action. It’s not even lobbying. So you can do all of that. You want, you can actually express a view on a particular piece of legislation and not give any sort of message to the, to the public about who to contact or, you know, provide the information, the contact information of the legislature, um which is sort of implied called the action. You can include none of that, but just say, hey, this is the way our charity feels about this piece of legislation period, that’s not even lobbying uh for purposes of the expenditure test. So another good thing to note of, of advocating your point of view. But if you do decide on the 501 H expenditure test note that the grass roots lobbying limit is 25% of your total amount of lobbying. So if we said 20% is your cap on your 1st $500,000 on exempt purpose or mission related expenditures. So 100,000 of that $500,000 is safe, well, then $50,000 would be the amount that you could do of grassroots lobbying of that $200,000 limit that you have. So 25% cap on the grassroots lobbying expenditure. And as I said before, under the substantial part test, if you don’t make this election, if you exceed the amount in one year, you can lose your 501 C three exemption. Although that’s very, very unlikely based on sort of very poor irs enforcement on this issue right now. But under the 501 H expenditure test your measurement, you, you can get hit with a penalty tax of 25% of the excessive amount of lobbying if you lobby excessively. Um, but you will not get your tax exempt status, your 501 C three status revoked unless you exceeded the lobbying limit for a four year period. And you have to have exceeded it by more than 50%. So there’s a huge benefit to this 501 H expenditure test election. 5768 is the form number. We really urge most public charities to, to, to file that election. Absolutely. Yeah, I can, I can see the, the big advantages versus the cloudy, much less generous uh facts and circumstances. OK. Do the 501 H like gene just uh urged you beneath, you even do the 501 H All right. Um So what, where should, so where do you wanna go from from now? The uh the, the, the lobbying uh from, from lobbying? Where should we go? So let’s talk about what’s sort of maybe at the outset say, well, what you can’t do which you alluded to in the beginning. Tony is um you can’t endorse or support a candidate for a public office so you can’t engage in electioneering or public campaign uh political intervention. So none of that is permissible. But what is neither lobbying nor this um political campaign intervention is stuff like making available nonpartisan analysis study or research or examining broad social economic and similar problems if you do it in a nonpartisan manner, but really focusing on the issues. Um You know, if you don’t refer to specific legislation and you want to state your views on whether it be climate change or women’s rights or LGBT Q plus rights or anything, you don’t mention legislation, it’s not lobbying. And if there’s no call to action, it’s not grassroots lobbying. So there’s a lot of things that you can do. And maybe the last exception that I’ll mention and there are many others. But the last one I’ll say is if you’re communicating to a non legislative body, like an executive branch of the president, the mayor, the governor, that is generally not lobbying when it’s, you know, regarding implementation of regulations or policies because those are not done by a legislative body. Those are done by an administrative agency and lobbying has to do with legislation or if you’re sending this information to your constituents. Yeah. Uh a lot of times that may not be lobbying as well when it’s to, to your membership. It’s when you, when we talk about constituents and it gets a little bit iffy about whether that might be grassroots lobbying under the 50 mh expenditure test or just lobbying period. The, the substantial part test, the default test. Oh, so the, so the distinction is whether you have a call to action or, or whether you’re just sending something neutral, like you said, you know, just a report about a subject is that the difference? There is a call to action. Yeah, that’s probably the primary difference. There’s a little bit of differences between when we talk about sending communications to members versus to the general public. But in either case, yeah, if you don’t include a call to action, you’re probably safe and not engaged in lobbying. It’s time for Tony’s take two. Thank you very much, Kate 24 NTC. It’s the 2024 nonprofit technology conference hosted by N 10 and it is next week. I’m very grateful to Heller consulting for sponsoring us at 24 NTC. We’re gonna be sharing a double wide booth with Heller. I’ll be there capturing lots of interviews, but already more than 20 already scheduled. All these smart tech folks but not technical tech folks, right? We all we know this is the conference and certainly the interviews that I capture for us. Not, not over the top tech, not even, not even, not even top tech, just user, user friendly tech. That’s what we talk about. So uh we’ll have all these interviews playing over the coming months from the conference. Uh If you’re gonna be there, I hope you will come see us on the exhibit floor, which they’re calling the archive. No, not the archive. It’s the arcade, not the archive. The archive is in the past. So the arcade forward looking. Uh there’s gonna be, I know there’s ping pong. There’s ski ball. I know I specifically asked about ski ball. You gotta love skee ball. I used to play ski ball with my grandfather, Kate’s great grandfather, uh in Asbury Park, New Jersey, which he used to call Raspberry Park. Lots of stories about Raspberry Park. Anyway, there’s gonna be ski ball, uh in the arcade, um, and others, other games as well. We are gonna be in booths 607 and 609, nonprofit Radio and Heller consulting side by side. All the smart folks at Heller, you know, with their outstanding, um sales force, blackboard Microsoft consulting, they find you the right tech solution because they’re broad in lots of different platforms and then they do the implementation for you. Uh That’s Heller consulting again. Thankful to them for sponsoring us at the conference. Please come by, see us if you’re gonna, if you’re there in Portland, I neglected to say this is all happening next week in Portland, Oregon. Very nice city. I’m gonna spend a couple of extra nights because great, great food scene there with their food trucks. That’s 24 NTC and that is Tony’s take two. Hey, my dad loves ski ball. Every time we go to an arcade it’s always ski ball and like he’ll use my tickets because him and I go off together, he’ll use my tickets to just play ski ball. That’s it. Well, I, I have the origin story for that. I, I assure you, it goes back to our grandfather, grandpa Martinetti, taking us to ski ball back when the balls were made of wood. Yes. And a play was a dime. You put your little dime in dime for, like, I think it was a dime for nine balls. Oh, I wish it was still that. It’s like a dollar now. Oh, my God. Wooden balls. I guess they were not, uh, hypoallergenic like the plastic balls are anyway. But wood balls, I’m sure of it. It was nine plays for a dollar. No, nine plays for a dime. You pull that metal handle back and those wooden balls will come crashing down in a row and then you, then you do your play, try to get, try to get the ball in the center for the maximum points. So that’s why, that’s the story. Why your dad loves ski ball. Well, let’s carry on. What do you say we’ve got vu but loads more time. So let’s return to election year activities with gene decoy. It, it, it’s, it’s a question of doing it also aside from the call to action, doing it in a nonpartisan way, like you said, you know, objective research on an issue, right? Yeah. So, I mean, we can always do this in a partisan way that can now mean that it’s may not be lobbying, but it could be political campaign intervention that 501 CS are not allowed to engage in. So if we like, say, focused on a wedge issue like abortion, let’s say, and we didn’t talk about it, you know, for, for most of the, the, the period of time in question until just before an election. And then we started to talk heavily about that and tell people to, to really, you know, vote with their conscience lies without saying a particular candidate but mentioning abortion rights. Uh uh you know, if, if that was kind of the wedge issue between, you know, candidates and that’s the only time that we brought it up that might be seen as prohibited, you know, political campaign intervention or electioneering. Ok. So now we’re going broader, you know, what’s, what’s your typical communications about this issue? And like you said, if this is your first time and we’re in an election season, it’s, it’s, uh, it’s gonna, that’s gonna weigh against you versus something that you discussed routinely with your constituents. Yeah. And that’s gonna sort of apply to a number of different activities that might ordinarily be done, you know, regularly by an organization. But if it’s not done regularly and it’s only timed with an election, and it’s really the intent was to influence that election by picking a particular wedge issue or highlighting a particular issue just before the election that can get organizations into trouble. Although, again, the IRS enforcement on the whole electioneering issue has been pretty weak. Ok. All valuable. All right. Um You can even host a debate. Right. Yeah, there are definitely charities, 501 c three public charities that are not allowed to engage in electioneering that host candidate debates. Now, they’ve got to organize that in a neutral nonpartisan manner, including inviting all of the viable candidates. Now, not everybody might accept that invitation. And that doesn’t necessarily mean that you can’t hold the debate. But, um, yes, if you do it in a neutral nonpartisan manner, it can be done. And I think, you know, many of us are probably familiar with like the league of women voters. Um and, and others that, that uh organize some of the presidential debate. So it, it is something to, to be aware of that. It, it is a possible thing to do on a local level as well. Ok. Yeah. Right. This all applies locally too. So, I mean, we’re in a presidential year but uh think think broader than just 2024. Ok. OK. Um What, what about uh the, there’s the, there’s an issue around if you criticize the actions of an incumbent that’s running like Joe Biden. Yeah. So, you know, it’s always a little bit tricky when we talk about an incumbent when they’re also running for office. Right. So again, the timing may matter. Um but if we’re criticizing the incumbent based on their actions taken in that capacity, so if we criticize Joe Biden uh on actions he’s taken as president, that’s different from criticizing his stance in areas um which he’s campaigning on or which the other party may be campaigning on in terms of opposing his candidacy. So, yes, you can continue to criticize an incumbent’s action. If you’ve been doing that all along, that really helps if you only time it before the election and it looks like the reason for doing it was to influence that election, then maybe that could cross the line. So you have to think about it in those terms. It becomes a little bit weird too when you have the other candidate who was formerly the president of the United States as well. Right. So are we criticizing him for his actions taken when he was president or has that been so long ago? That that’s not really anything we’re doing other than to influence the coming election. So it gets a little bit dicey when, when, when, when we um look at that um in, in c through a certain lens, but you know, let’s talk not about the Biden Trump um candidacies, but let’s just talk about some local mayor uh or, or, or go, I, I’m sure all of us can criticize the actions of our executive branch officials from time to time um of, of our elected officials in the state. So um yes, um you can continue to criticize them probably again, you, you know, if that criticism was really just part of what is connected with your charity and not just for, for, for, you know, purposes of influencing their candidacy in a, in a later election. And let’s go to the next step. What about somebody who’s the candidate? But you’re hosting them for non candidate nonelection, uh type issues, a conversation, a debate, a panel, let’s say panel is probably more likely. Uh but it doesn’t have to do with their election. They happen to be a candidate. Yeah. So, you know, let’s say it, it was a um I, I’ll just pull out an example. I’m not sure that if I can come up with an actual name here, but let’s say it’s a rocket scientist, right, who happens to be running for office. Um But the charity wants to invite them because they’re a science museum and he has sort of a background in a particular initiative that the science museum has taken. And he is, you know, a very highly recognized person in the public. So that would be a great draw and he can talk intelligently about subject matter at hand, might be every right of that charity, that museum to invite that candidate, not as a candidate, but in, in his rocket scientists capacity to speak to the public and if he’s not talking about the election, um And you’ve got to sort of sometimes when you invite them, you have to talk to them about it because they may not know the 501 C three charity rules and this prohibition against electioneering. So you’ve got to make sure that they don’t speak about their candidacy or the election. Uh And the charity might even want to put a disclaimer up there, you know, when inviting him or, or when introducing him to the, to the uh audience that, hey, we’ve invited this person. Um We are not stating any position on the upcoming election, but we’ve invited him because he’s this, you know, famed rocket scientist and we’d love for him to speak with you about the science on our initiative. So that, that is ok. Ok. Ok. Uh We should probably move to what’s, what’s uh not, not allowed in. Uh Because we, we talked about what, what you can, what you can do as long as you do this on a nonpartisan basis. What, what are some things that are not allowed around the political campaign intervention? Yeah. So here’s um and I’ll speak of it in two ways. So what, what’s allowed and then what makes it wrong? So a voter registration drive or get out the vote drive. Those are really common for charities to do and they a RK unless you’re doing it in a partisan manner, right? So you’re only going out to do the voter registration drive if the voters are, you know, siding with your preferred candidate and if that’s the way you conduct the voter registration drive, then it is partisan political campaign intervention and could cost you your 501 C three status. So that would be prohibited. Same thing with like a candidate questionnaire or voter guide if you designed it or distributed it in a manner that was partisan. So you’re getting the answers that you want and using it as election materials, then that would be prohibited. Political campaign intervention if you had kind of um uh a candidate and you said, you know, we’re going to score you on all of the issues that matter to us. Then that could also be political campaign intervention when you’re just score carding a candidate just timed with the election. Now, that’s different from scorecard, an incumbent, um if it’s not timed with an election, but when you’re scorecard candidates um timed with an election really difficult if you ask a candidate to take a pledge. So you say, hey, pledge to support our environmental platform, even though you’re not saying we’ll support you. If you do that, even without that, that might be enough to say, hey, that’s still electioneering if, even if you, even if you offer that pledge to all the candidates, yeah, even if you offer it to all the candidates because if, if some pledge to back your platform and some pledges will not pledge that, then that’s seen as a message that you’re given to, to people who are looking at that uh that communication that you, you highlight after about who has backed your platform and who hasn’t. It’s kind of seeing as tacitly um uh influencing that election either by, you know, promoting or opposing a particular candidate. I see. Ok. Ok. What else? Uh, what else should we be aware of? So, avoid a big one is for me anyway, is the selective use of space or resources? So, in one sense, you know, a lot of charities will go, well, we don’t allow any of our political candidates or any political candidates to use like our space. So, you know, um, we’re not going to, you know, worry about that. But what if you invited somebody to speak to your, you know, to, to your audience about kind of the issues? And I said it would be ok if they, if they’re not doing it in their other, you know, capacity as a, as an expert in some other area. But what if they were doing it kind of as a candidate? Um, and you allowed them to, you know, to speak on the issues but you didn’t invite others to, to speak on it. That would be problem. And maybe even more of a common problem is one of the assets of a charity are its emails, right? So, if you have, uh, you know, Gene at charity.org, that’s the charity’s email address. You know, it’s my professional email, but it wouldn’t be my email in terms of, I wouldn’t own it if I, you know, if I wasn’t, you know, together with the charity anymore, if individuals who are certainly allowed to engage in, in, you know, supporting endorsing or opposing candidates for political office in their individual capacities. But if they’re using staff email to do it, um that becomes a problem if they’re using staff time or staff events, uh which they use as a platform to engage in their individual sort of first amendment rights to engage in political activity. That’s a problem because they’re using organizational resources, they can do it on their own time. Um And you might see sometimes in newspapers, people will put the name of the organization they’re with, they might even say like their position president of charity X endorsing this candidate. You’ll see there’s going to be an asterisk there that says that the titles and affiliations of the individuals are provided for identification purposes only. So it’s not an endorsement by the organization. So that’s really important to, to make sure that individual staff members or board members are not using organizational resources, including emails uh to engage in political activities that are, that are otherwise prohibited to the charity. How would you judge this one? Let me give you a hypothetical uh uh an employee drives uh a nonprofit vehicle to a rally or a anything where they’re gonna be expressing their political opinion, but use a rally so they drive it, they park it and then they walk a few blocks to the rally. What do you think about that? Can’t do it? I mean, it would be, it would be, again, the IRS rarely enforces this anyway. Um, but it is the law but it would be, it would, you know, it would probably not come to the, the, the charity’s, um, attention. But if it did, they would have to hold the employee accountable for that. So it’s not, you got to terminate somebody but you probably should have a policy that says something like you cannot use organizational resources, including our vehicles, including your email address to support or oppose any candidates for public office. You’ve got to use your own resources in your own time for that. Ok. It’s a resource. I agree. All right. If an email is a resource, then certainly a vehicle would be all right. I just wanted to just, I thought, I thought maybe she parked it a few blocks away. Uh Oh, I thought maybe it might make a difference. It’s time for a break. Virtuous is a software company committed to helping nonprofits grow generosity, virtuous beliefs that generosity has the power to create profound change in the world and in the heart of the giver, it’s their mission to move the needle on global generosity by helping nonprofits better connect with and inspire their givers responsive. Fundraising puts the donor at the center of fundraising and grows giving through personalized donor journeys that respond to the needs of each individual. Virtuous is the only response of nonprofit CRM designed to help you build deeper relationships with every donor at scale. Virtuous, gives you the nonprofit CRM fundraising, volunteer marketing and automation tools. You need to create responsive experiences that build trust and grow, impact virtuous.org. Now back to election year activities, you got some other things that we need to, we need to avoid around the political campaign intervention. Yes, I, you know, I would say another common thing is websites and social media, right? So social media on an organizational sort of account got to be careful, no electioneering on those accounts. So whether it be Twitter or X whatever you want to call it, Facebook, um tiktok, whatever, if it’s the organizational sort of account. Um And you’re promoting the charity uh on it, it’s not your individual account. Um You have to make sure that your individual sort of political endorsements or oppositions are not on that account, are not used on that social media account. On the charity website. There’s kind of this one link rule, meaning that if the charity links to another website, the charity is actually responsible for the content on that other website, not in terms of whether it contains an electioneering message or not. 00, that’s, that’s harsh. So you have to pay attention. So the general idea behind the rule is that, you know, I think any regulator would see past the the the rule of, of saying, hey, we don’t endorse political candidates but link here and this will take you to, you know, one of the political party platforms, right? And not the other. Um So, and they wouldn’t want you to say, oh, you know, that’s just a link that’s not on our page. We just included the link which has no, you know, electioneering message on it. Well, the one link rule would say no, you’re responsible for the content on that other page, but you’re right, it could be harsh because sometimes that link is to a 501 C four organization. Um And that 501 C four organization is allowed to engage in some political campaign activity so long as it’s not their primary activity. But if it goes to the page of the 501 C four that has the political campaign sort of intervention message on it, then the charity could be held responsible for it. And again, that would be a violation of the political campaign intervention rule. All right, now you’re responsible, um You’re responsible for other people’s content when you link to it in this, in this, in this arena, I I would be careful. I would say that there’s probably less likelihood of any enforcement if it’s something that is uh not intended to be an evergreen thing. So if it’s like is like a tweet and that link changes over time, I don’t think anybody is going to go back and say two years ago, you linked to this and now this link contains this electioneering message. I don’t think that’s the way it would be force, but if it’s on your, your sort of active website, uh and the link at the time that you created, you know, that website and, and published it, uh had electioneering messages on it, then I would be a little bit concerned that that would be a violation of the rules. You mentioned, uh you’re explaining about uh employees, you know, and not allowed to use any of the organizational resources. Um What about employees um wearing a hat or a button during, I don’t know, during staff time during an event, staff time, meaning working hours, you know, and they’re in their office doing that, not working, not working hours and they’re, they’re at home but working hours and they’re in their office or it’s an event. Uh and, you know, they’ve got their, they’ve got their election year on. Yes, I think that’s a really sensitive area, right? Because we each have our First Amendment rights and we’re ab absolutely wanna say individually as individuals in our individual capacity, we have every right to endorse or oppose a candidate for public office, every right to do so. Um But I said we shouldn’t use organizational resources to do so. So what happens if you show up? Um And you’re wearing a vote blue or vote red or Mega or whatever hat or t-shirt on and you go to go to work. Um Well, I think to the extent that you are representing the organization at work, especially if you have uh any interface with the public, that would be a reason for a charity employer to say no, that’s in violation of the rules. This isn’t, you know, a violation of your first amendment rights. We’re just saying as an organizational representative to the public or to the public that we’re serving, you cannot send that political message out because that looks like it’s a political message being sent by our charity. So I think that is where you would enforce it and say you can’t do it. Now if they’re at home um on a zoom meeting with other employees, I have a good one. That’s a good one. Yeah, I haven’t seen any guidance on this. I would still feel slightly uncomfortable about it, but I wouldn’t want to have to go to court to fight about that either and I’m not sure that anybody would really care. Um But yeah, what another employee said, no, that, you know, II I didn’t want to see that and that has, you know, traumatized me. Um We’re not, you know, we’re not thinking about election related materials and, you know, does that, you know, give them the same authority to say, you know, everybody of this, you know, particular viewpoint should die on their T shirt. Like that’s a first amendment right to wear, like you could walk out to an amusement park to wear it, I suppose, but Disneyland would probably throw you out and maybe a charity employer would have the right to say no, you can’t wear that on the zoom meeting either. Ok. Ok. Anything else we, we haven’t covered or you wanna cover in more detail, the quadrennial chance? Sure. So, um you know, maybe talking about what is educational like we’re allowed to educate the public if we wanted to educate the public on climate change. Is that ok? Um Yeah, you mentioned, for instance, you mentioned voter guides. Yeah, so you know, we, we could have a voter guide or maybe we’re just having educational materials, just articles um on our website or on our blog. And we, we have promotional activities about that. We hold conferences about it. We do you know seminars or trainings about it. Um Can we do all those things? Um And of course, I think we know the answer is yes, there are a lot of organizations that are, are holding conferences and seminars on climate change. Um But when is it wrong to do that? Um And it’s interesting, I, I think with climate change and the overwhelming scientific opinion that climate change and human uh cause of climate change is, is a real thing. Um that, that’s not an issue, but it once was I once got um asked by the IRS agent who reviewed uh uh an application uh for 501 C three status about an organization sort of uh educational material about climate change. And they said, well, is this a full and fair exposition of all of the facts? Are you considering both sides? Um because that’s what educational means under 501 C three. And I, I didn’t think that was appropriate of that particular IRS agent even back then, but maybe 50 years ago, maybe that would have been a legitimate question when the scientific community wasn’t as aware of those things. And maybe it could be seen as more of a wedge issue between candidates and a reason to promote one candidate over the other based on, you know, opinion rather than supported facts. Um, and so educational activities, um, of course, charities should be, you know, supporting their mission with educational communications out there. If, if it’s going to help them advance their mission, that’s what they should do. And if they aim it at candidates, if they’re aiming it at all candidates, I think that that’s a fair thing to do as well. Now, if you’re aiming certain educational communications only at the candidates that the charity leaders prefer in, in one way or the other, now you may be engaged in sort of, again, this partisan viewpoint. You’re, you’re um providing resources to one candidate and not to others, even though you might think that, well, they’re not going to read it, they’re not going to agree with it anyway, the fact that you’re not giving them the chance to, to use those resources even if to attack them, um, might be seen as preferential and partisan and therefore a violation of 501. C three. Ok. Yep. There again. You, you’re, you’re being biased, you said, you know, partisan, you’re not, you’re not doing it, um, you’re not doing it objectively. You’re not doing it across the board. You’re, you’re being selective. Yeah. I think, you know, 11 other thing I wanted to, to sort of, um, let the audience know about it is that there are other laws besides the 501 c three, sort of tax exemption laws that can apply to lobbying or political activities. Um, and so it may be a matter of taking a look at some of your state or local law resources on lobbying or political activities as well as knowing the tax laws. And there’s one great source right now, um, that was just recently made available in all 50 states and DC. It’s called State Law Resources, nonprofit lobbying. And it’s from the Alliance for Justice Boulder advocacy. So, um, uh, the Alliance for Justice has a 501 C three. They also have a 501 C four organization which we didn’t really talk about too much other than to say that they are allowed to engage in some political campaign intervention activities as long as it’s not their primary activity. Well, there are organizations that have both the 501 C three and a 501 C four organization. They are at arm’s length, but they are affiliated. Alliance for Justice is one of those organizations, but their C three has provided us some great resources, educational resources, nonpartisan that talk about state law, resources on nonprofits, lobbying and go over not only the tax laws that we talked about, but some of the political and election laws that, that apply as well on the state level. Um And again, local laws may also apply. So you just want to check out those resources if you’re going to engage in significant lobbying or political activities. J say the name of that resource again, the title of it. So it’s from the Alliance for Justice and it’s called State Law resources colon, nonprofit lobbying. State law resources, nonprofit lobbying. And there’s a different guide for each state and for, for, for the district of Columbia, you know, we love free resources. Excellent. OK. You feel like we’ve given this sufficient coverage until 2028. Yeah. Uh Other than to say, go out and advocate for your mission. Um And make sure your boards are supporting that advocacy as well. You can do a lot more than you think Gene Takagi there. You have it. You’ll find him at nonprofit law blog, which is nonprofit law blog.com and you’ll find uh him. You’ll find Gene at G Tac Gtak Jean. Thank you so much. Thanks for sharing your wisdom. Thanks, Tony. It’s always great to be on next week. The generational divide. We thought that would be this week, but things don’t always work out as planned if you missed any part of this weeks show. I beseech you find it at Tony martignetti.com. You notice how I have Kate say we thought this would be next week. So kind of kind of makes it sound like it’s her fault. Notice I, I didn’t give the explanation, it’s not her fault but uh notice how I set her up that way. We’re sponsored by donor box. Outdated donation forms blocking your support, generosity. Donor box. Fast, flexible and friendly fundraising forms for your nonprofit donor box.org and by virtuous, virtuous gives you the nonprofit CRM fundraising volunteer and marketing tools. You need to create more responsive donor experiences and grow giving, virtuous.org. Our creative producer is Claire Meyerhoff. I’m your associate producer, Kate Marinetti. The show social media is by Susan Chavez. Mark Silverman is our web guy and this music is by Scott Stein. Thank you for that affirmation. Scotty be with us next week for nonprofit radio. Big nonprofit ideas for the other 95% go out and be great
Thought leadership can be valuable to you, your nonprofit, or both. Publishing a nonfiction book is one way to become a thought leader or expand your credentials. From outlining and writing to publishing and marketing, Stephanie Chandler shares her personal experiences and professional wisdom. She’s CEO of the 
First Generation Wealth creators have different values and mindsets than those who inherited their wealth. And FGWs far outnumber the inheritors. Esther Choy’s research helps you understand these folks and how to build valuable relationships with them. She’s president of 
Jay returns to share his reflections on four decades in the nonprofit community. There are things he’d like to see us doing better, that the sector has been talking about for many years. But they haven’t changed much. Yet he remains optimistic, so he recognizes the brighter future that’s possible if we practice more of what we preach. 
We’d rather face death or the dentist. We’d rather talk about money or sex, than have to speak to an audience. Even a small one. Laurie Krauz can help you overcome your anxiety around talking in public, with her preparation strategies. She’s a presentation skills coach, who Tony worked with for years. They’ve got good stories about how difficult he was, and how she helped him. This originally aired May 24, 2021.