Legal Question in Banking Law in California

Hello,

I was wondering if a non-profit organization is legally allowed to contribute to a Presidential Candidate. And if it is allowed, is there a limit on how much they are allowed to contribute.

Additionally, are non profit organizations allowed to endorse political candidates even if it not a public national endorsement?


Asked on 10/03/11, 4:11 pm

2 Answers from Attorneys

Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

A tax-exempt organization is not allowed to contribute to political candidates or to endorse political candidates. Non-tax-exempt organizations such as Super PACs are able to contribute to, and to endorse, political candidates, and to solicit non-tax-exempt contributions. The laws are complicated, but recent Supreme Court decisions such as "Citizens United" should enable you to do what it is you wish to do. You might want to contact the campaign committee for your preferred candidate(s) for further assistance. I don't know what a "public national" endorsement is. Best guess is that all endorsements by tax-exempt entities are illegal and would jeopardize the tax-exempt status of the entity.

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Answered on 10/03/11, 4:29 pm

Mr. Stone is VERY wrong. First off, there are many different forms of non-profit organizations that have varying degrees and types of tax exemptions. The majority of the categories of non-profit organizations ARE allowed to make political donations and are allowed to endorse candidates and support or oppose initiatives and legislation. In fact there is a specific category of non-profit for trade associations and similar organizations that are formed in large part for the purpose of promoting an industry or other special interest, and they often make political donations. Even PAC's are non-profit organizations under the tax code. The key type of non-profit that CANNOT EVER make a donation or endorsement or promote or oppose legislation, however, is the 501c(3) charitable non-profit. The key tax benefit that charities get that other non-profits do not is that donations to them are tax deductible to the donor. In order to preserve that benefit, charitable non-profits must be strictly non-political. Citizens United did not change that in any way shape or form.

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Answered on 10/03/11, 4:50 pm


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