Close scrutiny of 501(c)(3) political activities in an election year

An election year frequently inspires clients' passion for social issues, making philanthropy an especially important topic for your conversations. You may also experience an uptick in questions about giving vehicles such as donor- advised funds and foundations.


It's critical to stay current on the IRS's interpretation of the statutes and regulations prohibiting charitable organizations from engaging in certain types of political activity.

For example, in early 2020, the IRS issued Private Letter Ruling 202005020 ruling that a for-profit subsidiary's political activities would be attributed to its nonprofit parent and therefore constitute impermissible political campaign participation. In addition, a shared services agreement between the two entities constituted operation for private interests, thereby flying in the face of Section 501(c)(3).
If you'd like to go deeper into the connection between charitable giving and politics, GuideStar offers insight into how the 2016 presidential election impacted charitable giving.