Texas Politics - Nonprofits and Politics

Tax-Exempt Organizations and Permissible Political Activities*

		501(c)(3) Public Charities	501(c)(4) Social Welfare Organizations	527 Political Organizations
Tax Treatment	Organization pays federal income tax	No	No	No
	Donor can deduct contributions	Yes	No	No
	Organization access to foundation grants	Open	Restricted	Forbidden
	Donor pays federal gift tax	No	Yes	No
	Donor pays capital gains tax on gifts of appreciated stock	No	No	Yes
Lobbying Activities		Permitted but limited	Unlimited	Permitted but taxed unless to support or oppose a candidate
Election-Related Activities	Activities in support of or opposition to candidates	No	Yes, as secondary activity	Yes
Election-Related Activities	Partisan activities	Non-partisan only (e.g., voter education and registration)	Partisan activities allowed but taxable	Partisan activities limited only by federal and state election law
Examples		• Churches • Texas Public Policy Foundation • Center for Public Policy Priorities • Texas Democracy Foundation • American Values • The American Cause	• League of Women Voters • Recreational Fishing Alliance, Texas • Texas Home School Coalition Association • Texas Christian Coalition • Downwinders at Risk • MoveOn.org	• Political Parties • Political Campaigns • PACs • Club for Growth Inc. • MoveOn.org Voter Fund

Source: IRS; Organizing for Social Change; Center for Public Integrity. (full source, footnote)

Full Source: Internal Revenue Service (http://www.irs.gov/charities); Bobo, Kim, Jackie Kendall, and Steve Max. Organizing for Social Change. 3rd ed. Santa Ana, CA: Seven Locks Press, 2001; The Center for Public Integrity (http://www.publicintegrity.org).

Footnote: Numbers refer to the section of the Federal tax code describing each type of organization. Other types of non-profits include Business Leagues (501(c)(6)), Employee Associations (501(c)(9) and 501(c)(17)), Fraternal Societies (501(c)(8) and 501(c)(10)), Labor and Agricultural Organizations (501(c)(5)), Social Clubs (501(c)(7)), and Veterans' Organizations (501(c)(19) and 501(c)(23)). Though federal and state election laws regulate most 527 organizations, a growing number of 527s in recent years have been designed to evade disclosure requirements, contribution limits, and other elements of campaign finance laws. Visit the IRS (http://www.irs.gov), the Federal Election Commission (http://www.fec.gov), and the Center for Public Integrity (http://www.publicintegrity.org) for current information.

The Texas Politics Project

Non-profit organizations and politics