Tax-Exempt Organizations and Permissible Political Activities

Social Welfare Organizations*
Political Organizations*
Tax Treatment Organization pays federal income tax No No No
Donor can deduct contributions Yes No No
Organization access to foundation grants Open Restricted Forbidden
Donor pays federal gift tax No Yes No
Donor pays capital gains tax on gifts of appreciated stock No No Yes
Lobbying Activities   Permitted but limited Unlimited Permitted but taxed unless to support or oppose a candidate
Election-Related Activities Activities in support of or opposition to candidates No Yes, as secondary activity Yes
Partisan activities Non-partisan only (e.g., voter education and registration) Partisan activities allowed but taxable Partisan activities limited only by federal and state election law
Examples   • Churches
• American Red Cross
• The Brookings Institution
• Center for American Progress
• Citizens United
• Natural Resources Defense Council
• American Civic Coalition
• American Family Voices
• Americans for Responsible Government
• Progress for America
• Progressive Donor Network
• Political Parties and Campaigns
• America Votes
• Americans for a Better Country
• Americans for Jobs, Health Care, & Progressive Values
• Billionaires for Bush

View Source
Internal Revenue Service (; Bobo, Kim, Jackie Kendall, and Steve Max. Organizing for Social Change. 3rd ed. Santa Ana, CA: Seven Locks Press, 2001; The Center for Public Integrity (; the Center for Responsive Politics (; organizational Web sites.

Footnote: Numbers refer to the section of the Federal tax code describing each type of organization. Many groups maintain status under two or three of these sections. Though federal and state election laws regulate most 527 organizations, a growing number of 527s in recent years have been designed to evade disclosure requirements, contribution limits, and other elements of campaign finance laws.