Friday, November 24, 2017

The Effects of Citizens United on Nonprofit Organizations

    The Supreme Court decision in Citizens United removed the restrictions on independent spending in elections by corporations. Now, a great deal of the money contributed to political candidate’s campaigns comes from corporations. Some corporations are nonprofit entities, like 501(c)(3)s, which tax-exempt status forbids them from getting involved in political activity. There has been public controversy over 501(c)(4) organizations and whether they must disclose their donors to the public. Although, the case says that constitutionally nonprofits can contribute to candidate’s campaigns the tax code still forbids 501(c)(3) organizations from endorsing candidates, or make independent expenditures suggesting who the better candidate is. Also, if political activity is deemed to be the primary purpose of 501(c)(4) organizations the IRS can potentially tax these organizations. Finally, for 527 organizations, corporations can make unlimited expenditures to political organizations (super PACs). For more information on the effects of Citizens United on nonprofit organizations click here: or here:



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