Political Campaigning .... Who Can and Who Can't

Greetings,

As I have been reading the numerous comments, both for and against a new city, posted here on the Patch and at other websites over the last week, one of the things I have noticed is an occasional question about whether the UPCCA is allowed to actively participate in the political campaigning leading up the vote in November (just 112 days away).  A couple of commenters have stated that as a 501(c)(3) organization the UPCCA is not legally allowed to participate in political activities.  The UPCCA has been a major force behind the cityhood initiative so it seemed like a valid question.  From the perspective of an anti-city voter, removing the UPCCA and any support it might lend to the cityhood initiative would be a major victory. 

When researching for this article the three main questions that came to mind were 1) what is a 501(c)(3) 2) can a 501(c)(3) participate in a political campaign and 3) is the UPCCA actually a 501(c)(3) as some commenters claim or is it something else.

What is a 501(c)(3)?  Even though I follow politics fairly closely and had heard of 501(c)(3)'s all I really knew was that is was a status granted by the IRS.  So after I little research on the IRS website I found the description - "501(c)(3) - Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations".  That is a mouthful.  Basically a 501(c)(3) status (or for that matter any other 501(c) status - there are actually 28 different types of 501(c) organziations) provides an organization tax-emempt, non-profit status.  From what I can gather there are well over one milllion organizations in the US which have 501(c)(3) status many of which are churches.   

Can a 501(c)(3) participate in political campaigns?  Back to the IRS website - "Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or interviewing in, any political campaign on behalf of (or in opposition to) any candidate for elective office."  The IRS goes on in much greater detail about what you can and can't do but in general these organizations cannot participate in political campaigning beyond basic voter information (e.g. get out the vote) activities.  So, it seems pretty clear that if the UPCCA is a 501(c)(3) that it cannot really participate very vigorously in this debate. 

Is the UPCCA a 501(c)(3)?  The first place I looked for the answer to this question was the UPCCA's own website.  After spending a few minutes digging around I found that the UPCCA is actually a 501(c)(4).  Check out the link - http://www.upcca.com/item_list.asp?subcat=13&subtitle=History+of+UPCCA.

  So, we now know that 501(c)(3)'s are not allowed to campaign politically and we know that the UPCCA is a 501(c)(4) instead of 501(c)(3) but we don't really know what a 501(c)(4) is or can that type organization be active politically.  I found a really informative webpage that offered a side by side comparision of the two - http://www.afj.org/assets/resources/resource1/Comparison-of-501C3S-501C4S.pdf.  For all intents and purposes a 501(c)(4) is allowed to participate in political campaigns without much exception.  The biggest difference between the two types of organizations are (besides the ban on political activity for the 501(c)(3) ) that contributions to 501(c)(4)'s may be subject to gift taxes and in some cases disclosure of contributions may be required. 

I think there is a reason most of us don't know what a 501(c)(3) is.  It is a dry boring topic to most people except maybe lawyers and accountants who specialize in non-profits.  But to me finding out what a 501(c)(3) was and whether the UPCCA was one was a very valid question because assertions were being made that if the UPCCA was a 501(c)(3) it could not be politically active.  That would have been a major blow to the pro-city side of this debate as the UPCCA has been a major driver of the cityhood initiative.  However, based on information from the IRS and other data gathered it is clear that the 501(c)(4) non-profit status (and not 501(c)(3) status that some commenters attributed to it) the UPCCA has allows it to fully engage in the political campaign to decide whether Peachtree Corners should incorporate.