IRS rules prohibit 501(c)(3) organizations like the University of the Pacific from participating in political campaign activities. This memorandum has been prepared at the request of the Board of Regents to provide guidance on how to comply with the rules.
As a 501(c)(3) tax-exempt organization, the University must “not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.”  The prohibition on political campaign activity is applicable to campaigns at the federal, state, and local levels, and is an absolute prohibition, such that violating it may result in revocation of tax-exempt status and/or the imposition of certain excise taxes.
As a preliminary matter, it is important to distinguish political campaign activity from legislative activity (commonly known as lobbying). Lobbying means attempting to influence legislation. An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation. A 501(c)(3) organization may engage in some lobbying, but if a substantial part of its activities constitute lobbying, the organization risks loss of 501(c)(3) status.
To avoid jeopardizing its 501(c)(3) status, the University should:
University leaders (such as officers, Regents, and key employees) may express their political views when it is clear that they are acting in a purely personal capacity. However, University leaders cannot make partisan comments in official University publications or at official University functions. This is because comments made in the context of official publications or functions will be attributed to the University. For illustrative purposes, below are examples of permissible and impermissible personal endorsements of a candidate by a leader of a 501(c)(3) organization:
Permissible personal endorsements
With the officer’s permission, the candidate publishes an ad in the local newspaper listing the officer’s name and identifying the officer as the President/CEO of the organization. The ad states, “Titles and affiliations of each individual are provided for identification purposes only.” The ad is paid for by the candidate’s campaign committee, not by the organization.
Three weeks before the election, a leader of a church attends a press conference at the candidate’s campaign headquarters and states that the candidate should be reelected. The leader does not say that he is speaking on behalf of the church. His endorsement is reported on the front page of the local newspaper and he is identified in the article as the church’s leader. This is not considered prohibited political campaign intervention because the endorsement was not made at an official church function, in an official church publication, or otherwise made use of the church’s assets, and the leader did not state that he was speaking as a representative of the church.
Impermissible personal endorsements
As noted in Part III above, 501(c)(3) organizations may engage in issue advocacy, but must take care to ensure that any positions taken on public policy issues do not convey or imply a message favoring or opposing a candidate for public office. An issue advocacy statement can identify a candidate not only by stating the candidate’s name, but also by other means, such as showing a picture of the candidate or referring to political party affiliations or other distinctive features of a candidate’s platform or biography.
The determination of whether an issue advocacy statement or communication by a 501(c)(3) organization results in political campaign intervention is a highly facts-and-circumstances intensive inquiry. While the below general guidelines apply, we would recommend that if the University intends to engage in issue advocacy at the same time that Regent Hernandez is campaigning for office, the University consult Downey Brand on a fact-specific basis.
The organization sponsors a voter registration booth at the state fair. The signs and banners in and around the booth give only the name of the organization, the date of the upcoming election, and notice of the opportunity to register. No reference to any candidate or political party is made by the volunteers staffing the booth or in the materials available at the booth, other than the official voter registration forms which allow registrants to select a party affiliation.
The organization sets up a telephone bank to call registered voters in the district in which a particular candidate is challenging the environmental policies of the incumbent. In the phone conversations, the organization’s representative tells the voter about the importance of environmental issues and asks questions about the voter’s views on those issues. If the voter appears to agree with the incumbent’s position, the representative thanks the voter and ends the call. If the voter appears to agree with the challenger’s position, the representative reminds the voter about the upcoming election, stresses the importance of voting in the election, and offers to provide transportation to the polls.
 Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure, but does not include actions by executive, judicial, or administrative bodies.
 See Treas. Reg. § 1.501(c)(3)-1(d)(3).