The Potential Pitfalls of Partisan Political Activity by Non-Profits

Two recent stories in New York City newspapers highlight the dangers that non-profits face when they get involved in – or get close to – partisan political activity.

The first is a New York Times story about how some trustees of the Intrepid Sea, Air and Space Museum made appeals to the colleagues (on the non-profit’s letterhead) to attend a fundraiser for Governor Cuomo being held at the Intrepid.

The second is a New York Post story about New York City Comptroller and his campaign’s plan to solicit donations at the Chinese Consolidated Benevolent Association’s annual holiday party.  (Read more about Comptroller Liu’s fundraising woes in this prior post.)

Political activity by a non-profit can jeopardize the group’s non-profit status (read more on the IRS web site here), or result in the IRS imposing an excise tax.  And as these two stories show, there is also a huge potential for adverse publicity where non-profits engage in partisan political activity.

Note that the prohibition is on partisan political activity – not lobbying activities.

If your non-profit is politically active or engages in lobbying, understand the rules to ensure that you are protecting your non-profit and its reputation.