"... 501(c)(3) groups are 'absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.'"

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COMMENT:  "If you want tax-exempt status, live by the rules. That seems to be fairly simple. If you don't want to live by those rules, give up your status. ..."
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Charities risked tax-exempt status with political ads
By Rachel Baye, December 15, 2014

The Internal Revenue Service prohibits charities from getting mixed up in politics, and those that do risk losing their tax exemption. Despite the threat, a handful of groups in the 2014 midterm elections paid for ads that appeared to be campaign-related.

The Natural Resources Defense Council, for example, is known as a 501(c)(3) organization, meaning it pays no income taxes and donations to the group are tax deductible. It is organized the same way as a charity, a hospital or university.

Despite the risk, the NRDC lambasted North Carolina Republican state Sen. Bill Cook in a $700,000 ad campaign this spring. The nonprofit paid for eight different ads that aired more than 2,600 times from mid-April through mid-July, according to a Center for Public Integrity analysis of data from media tracking firm Kantar Media/CMAG.

One ad opens with video of trash being emptied into a landfill, then turns to a shot of Cook.

“State Sen. Bill Cook voted for a bill that would encourage New York, New Jersey and other states to dump their trash in North Carolina,” the voiceover says. “Tell Bill Cook attracting New York trash doesn’t pass the smell test.”

The NRDC, whose mission is to promote environmentally friendly policies, said the ads had nothing to do with the Cook's re-election campaign. If the ads had been, the organization could face a fine or lose its tax-exempt status as a charity.

Politics ‘absolutely prohibited’

The IRS says 501(c)(3) groups are “absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.”

Despite the restrictions, the NRDC and a few other charities chose to navigate the complicated web of IRS rules to air ads that criticized or supported politicians running for election in November.

In addition to the ads targeting Cook, the NRDC partnered with the Southern Environmental Law Center and seven other charities under the name North Carolina Environmental Partnership to air ads criticizing four other state senators and four state representatives. All told, the partnership's 20 ads — the majority of which were about the lawmakers’ support of fracking — ran more than 5,100 times from late March through mid-July and cost the groups an estimated $1.7 million to air, according to Kantar Media/CMAG.

There’s more to this story. Click here to read the rest at the Center for Public Integrity.

This story is part of Who’s Calling the Shots in State Politics?. The Center exposes the powerful special interests that drive elections and policy in the states. Click here to read more stories in this blog.
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