Federal law prohibits religious organizations that have 501(c)(3) tax-exempt status from making financial contributions to a candidate or a particular political campaign. Churches are also prohibited from organizing or making contributions to political action committees (PACs).
However, this prohibition does not apply to pastors when they are acting on their own rather than as an official church representative. In fact, as long as a pastor is not acting on behalf of the church, he or she can engage in a number of political activities that are off-limits to churches, including:
- Endorsing or opposing individual candidates
- Making financial and/or in-kind contributions to candidates
- Making contributions to a PAC
- Distributing a candidate’s campaign literature
It is important to note that the prohibition for churches against supporting or opposing any individual candidate does not apply to sitting government officials (unless they are a candidate at the time). The candidate prohibition also does not apply to speech on public, social, and moral issues or the actions of any government official in office (as long as they are not a candidate).
What about lobbying?
Section 501(c)(3) of the Tax Code outlines two specific types of lobbying that are permitted for religious organizations:
- Direct lobbying — communicating with government officials directly regarding legislative issues.
- Grassroots lobbying — communicating with organization membership or the general public to persuade them to contact their government representatives about specific legislative issues.
Both forms of lobbying are only permissible as long as the lobbying activity constitutes an “insubstantial part” of the organization’s overall budget and activities. Although the term “insubstantial part” is not defined in the law, it is generally considered to be no more than 15% of a church’s annual revenue and activities.
Churches may also support or oppose legislative initiatives in Congress or the state legislature so long as their activities in support of or in opposition to the initiatives meet the “insubstantial part” requirement as noted above.
We know this area of the law can sometimes be confusing. Provident Law’s church and nonprofit attorneys are here to help answer questions and with establishing and crafting policies governing political activities. We recognize how essential tax-exempt status is for the maintenance and safeguarding of a church’s ongoing mission, and we stand ready to counsel and serve the churches of Arizona. Contact us to learn more.