Political Advocacy and the 501(c)(6) nonprofit
Political Advocacy and the 501(c)(6) nonprofit
On Friday, March 25, a member of one of our industry councils sent a message to that industry group of members endorsing candidates for Town Trustee. When a nonprofit member alerted the Chamber that we might be in violation of IRS code, we prematurely issued a retraction. Here is the truth concerning nonprofits and political advocacy.
IRS.gov states: "Section 501(c)(6) of the Internal Revenue Code provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual. An organization that otherwise qualifies for exemption under Internal Revenue Code section 501(c)(6) will not be disqualified merely because it engages in some political activity. In addition, the organization may engage in lobbying that is germane to accomplishing its exempt purpose without jeopardizing its exemption."
Any political activity that protects the voice of business is germane to the charter of a Chamber of Commerce, which is founded to represent and protect business interests.
While it's true that "in return for its favored tax-status, a charitable nonprofit [501(c)(3)] promises the federal government that it will not engage in “political campaign activity” and if it does, IRS regulations mandate that the charitable nonprofit will lose its tax-exempt status," according to the National Council of Nonprofits, "charitable nonprofits MAY engage in voter registration and voter engagement activities." There is nothing stating that a 501(c)(3) is in violation of its nonprofit status by holding membership in a 501(c)(6).
Further evidence can be found in this document from the IRSstating, "IRS 501(c)(4), (c)(5), and (c)(6) organizations may engage in political campaigns, lobbying, influencing on behalf of or in opposition to candidates and ballot measures for public office provided that such intervention does not constitute the organization's primary activity."
The Estes Chamber is primarily concerned that we maintain our independence as a member-funded, member-led organization. The Board unanimously agreed to urge the business community to vote yes on the Tabor ballot issue principally in protection of our nonprofit members. We are not as an organization endorsing any of the Candidates for Trustee because three of them (Benes, Hazelton and Webermeier) are members of the Chamber and at contributors to our mission to create a strong voice for business in Estes Park. To that end, the Executive Director clarifies,
"We did not make a mistake in sharing the voice of one of our industry councils with its members, but I personally take responsibility for not running this endorsement through our governance process and for not immediately correcting misinformation about our nonprofit status," said Executive Director Donna Carlson. "We are strong as a new chamber, but still in growth stages concerning governance and executive function. All the more reason why the Executive Director who assumes the seat that I will vacate in May will have substantial proficiency in political advocacy."
Anyone who has specific questions for the Chamber Board of Directors may submit them to info@esteschamber.org.
