Can a section 501(c)(3) organization conduct business activities with a candidate for public office

Yes, a section 501(c)(3) organization can conduct business activities with a candidate for public office, but it must do so under strict conditions to avoid engaging in prohibited political campaign activity. The key factors to consider include:

1. Equal Access: The good, service, or facility must be available to all candidates in the same election on an equal basis. This means that the organization cannot show favoritism by providing access to one candidate while denying it to others.
2. General Public Access: The good, service, or facility should be available to the general public and not exclusively to candidates. This helps ensure that the organization is not seen as supporting a particular candidate.
3. Customary Rates: The fees charged to candidates must be at the organization’s customary and usual rates. Charging a candidate a reduced rate or providing services for free could be construed as a contribution to the candidate’s campaign.
4. Ongoing Activity: The activity should be an ongoing activity of the organization and not something that is conducted only for a particular candidate. This helps demonstrate that the organization is not engaging in political campaign intervention.

For example, if a 501(c)(3) organization rents out a hall for events, it can rent the hall to a candidate for a campaign event as long as it charges the standard rental fee, makes the hall available to all candidates on the same terms, and the hall is generally available to the public for rental.

Additionally, the organization must ensure that no political fundraising occurs on its premises and that it does not indicate any support for or opposition to the candidate in any communications or introductions related to the candidate’s use of the facility.

Failure to adhere to these guidelines could result in the organization being deemed to have engaged in prohibited political campaign activity, which could jeopardize its tax-exempt status under section 501(c)(3).

Sources:
Rev. Rul. 2007-41
Publication 1828 (8/2015)
§ 501. Exemption from tax on corporations, certain trusts, etc.
Rev. Rul. 86-95
PLR 200151060