HARMON CURRAN NONPROFIT LAW BLOG

The fight erupting over the Supreme Court vacancy created by the passing of Justice Ruth Bader Ginsburg understandably has many tax-exempt organizations wondering how they can lawfully get involved.  This post offers a general overview of the federal tax and campaign finance law implications for 501(c)(3) and 501(c)(4) organizations planning to engage in advocacy related to the Supreme Court vacancy.

Advocacy For or Against Confirmation of a Nominee is Often Lobbying for Tax Purposes

Advocacy for or against Senate confirmation of a Supreme Court nominee will often be treated as lobbying for purposes of the limitations on lobbying by 501(c)(3) organizations.  For a private foundation or 501(h)-electing public charity, direct communications to a senator or Senate staff encouraging them to (or not to) take action on a nominee would be treated as “direct lobbying,” whereas communications encouraging members of the public to contact their senators and ask them to (or not to) take action on the nominee would be treated as “grassroots lobbying.”.  For a public charity operating under the alternative “no substantial part” test, any costs incurred to advocate for or against the confirmation of a nominee would likely be considered lobbying.

501(c)(4) organizations are lawfully permitted to spend unlimited amounts on lobbying in furtherance of their “social welfare purposes,” so in general 501(c)(4) organizations are free to advocate for or against a nominee’s confirmation as an activity that helps fulfill the annual requirement that such social welfare efforts be their “primary purpose.”

Distinguishing 501(c)(3)-Permissible Advocacy from Political Campaign Activity

Given the close proximity to Election Day, questions may arise about what kinds of public advocacy around the Supreme Court vacancy would risk violating the prohibition on participation or intervention in a campaign for elective public office if conducted by a 501(c)(3) organization — or that would be an activity a 501(c)(4) organization would need to treat as non-“primary purpose” political activity.

As discussed above, the tax law treats the nomination and confirmation of a Supreme Court justice as a legislative matter, and therefore the IRS generally will not consider advocacy for or against a nominee’s confirmation to be political campaign activity.  For example, it may be permissible for a 501(c)(3) — or a 501(c)(4) as part of its “primary purpose” activity — to:

• Call on the Senate not to rush through a nomination and confirmation before there has been time for proper vetting and consideration of the nominee;
• Call on the Senate to act consistently with recent precedent and let the people have a voice in who makes the appointment;
• Call on the Senate to reject any nominee not nominated by the President elected by voters in the upcoming election (without indicating a preference for any particular candidate);
• Call on the Senate to reject a specific nominee on issue grounds; or
• Target advocacy on such messages to a particular senator (based on non-electoral criteria such as that they have not yet committed their vote).

But 501(c)(3)s should not make arguments that are (facially or implicitly) electoral in nature.  Thus, for example, it would likely be impermissible for a 501(c)(3) to:

• Publicly call on the Senate to reject anybody nominated by President Trump;
• Employ language disparaging or otherwise reflecting a view on any candidate for the upcoming election as part of the advocacy; or
• Target advocacy critical of the nomination to likely voters who are registered Democrats.

Remember that the IRS will always evaluate whether a 501(c)(3) engaged in political campaign activity based on “all of the facts of circumstances.”  Messaging that might otherwise be considered permissible for a 501(c)(3) could still constitute campaign intervention if there is other evidence available to the IRS (such as a planning memo) indicating that it was motivated by a desire to influence the election.  Also, public communications that invite a comparison of an organization’s position on a nominee with the position of Trump, Biden or another candidate are more likely to cross the line than communications made privately to senators or Senate staff.

Of course, the types of advocacy that are permissible for a 501(c)(3) can be conducted as part of a 501(c)(4)’s social welfare “primary purpose” activity, and a 501(c)(4) is free to go further and engage in advocacy that would be 501(c)(3)-prohibited political activity so long as the 501(c)(4) is operated primarily to further its social welfare purposes.

Campaign Finance Implications for TV and Radio Advertisements

Organizations considering running television and/or radio advertisements advocating around the Supreme Court vacancy should also be aware of the Federal Election Communication (FEC) rules regarding “electioneering communications.”

An electioneering communication is a paid television or radio advertisement that that refers to a clearly identified federal candidate and is targeted to the relevant electorate within 60 days before a general election or 30 days before a primary election in which that candidate appears on the ballot.  Since we are within that 60-day window now, a television or radio advertisement that refers to a particular senator who is up for re-election and that runs in that senator’s state between now and Election Day would be an electioneering communication, as would a television or radio advertisement that refers to President Trump and runs anywhere in the United States between now and Election Day.

Organizations making electioneering communications must include a special disclaimer notice on those communications and will be required to file time-sensitive reports with the FEC each time their spending on such communications totals more than $10,000. It is also important that for organizations not to coordinate their electioneering communications or any other public communications with any federal candidates or political party.

Note: The fact that a particular advertisement is an “electioneering communication” for FEC purposes does not necessarily mean it is a 501(c)(3)-prohibited political message, nor one that a 501(c)(4) must treat as non-“primary purpose.”