The Politicization of Nonprofits

Published September 6, 2022

Since 1954, all 501(c)(3) organizations have been prohibited from supporting, opposing, or contributing to a political candidate's campaign for public office. 501(c)(3) organizations are the most prevalent type of nonprofit, with 1.6 million tax-exempt organizations scattered across the United States. Various types of organizations can fall under section 501(c)(3) of the Internal Revenue Code (IRC). Churches, universities, charities, and hospitals are among the most common since they provide a public benefit and serve a social purpose. The Johnson Amendment is one of the provisions within section 501(c)(3). It establishes that any organization under this title 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."

Senator Lyndon B. Johnson proposed the Johnson Amendment, intending for it to maintain the integrity and prevent corruption in the nonprofit sector. When the amendment first passed, it met little resistance, although there has been a revocation of tax status in violation of the law. For example, in Branch Ministries Inc. v. Rossotti, the Internal Revenue Service (IRS) revoked a bona fide church's tax-exempt status because of its political advertisement. In this decision, the court upheld the constitutionality of the ban rejecting the plaintiff church's allegations that it was being selectively prosecuted because of its conservative views and that its First Amendment right to free speech was being infringed.

During Donald Trump's presidential campaign, he expressed his opposition to the Johnson Amendment. Trump advocated for its repeal because it restricts religious liberty and freedom of speech. Trump's assertion sparked opinions from varying nonprofit organizations. Trump's viewpoint is mainly shared by religious groups who support political endorsements within a church setting. The Alliance Defending Freedom is a conservative organization with a history of challenging the amendment. The group argues that the amendment protects censorship and threatens both the Free Speech and Establishment Clauses. Other nonprofits suggest that the amendment protects 501(c)(3) organizations from losing public trust in their efforts and work. The National Council of Nonprofits, a nonprofit network, published an official position on the issue. The council shared that without the amendment, nonprofits would endure increased political pressure from politicians and a reduction in donations that would be redirected towards partisan churches. A repeal would also introduce issues among nonprofits and the public in how campaign finance, tax-deductible donations, and dark money are handled.

While there have been futile efforts to repeal the amendment, Congress has not followed through with any action. In 2017, former President Trump signed the "Presidential Executive Order Promoting Free Speech and Religious Liberty." Rather than eliminating the amendment, the executive order prevented the Internal Revenue Service (IRS) from removing 501(c)(3) status from any nonprofits that violated the amendment.

The Johnson Amendment, however, does not discourage nonprofits from engaging in politics from a nonpartisan standpoint. Religious organizations can continue to promote voter education, voter registration, and voting drives and address social and political topics in sermons.

Currently, there are no significant efforts to repeal the Johnson Amendment. However, proponents of its removal encourage churches to protest the amendment by directly violating it. With over a million 501(c)(3) organizations throughout the country, the IRS is not actively enforcing the Johnson Amendment. According to The Washington Post, over 2,000 churches have intentionally broken the statute since 2018, yet none have lost their tax-exempt status. 

To learn more about the qualifications of a 501(c)(3) organization, refer to the Independent Sector's article on the Johnson Amendment. To read section 501(c)(3) of the IRC, check out the full text from Cornell Law School.