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May 501(c)(3) nonprofit rent facility for political rally?

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May 501(c)(3) nonprofit rent facility for political rally?

May a 501(c)(3) nonprofit that rents space to the public rent to a political party or candidate for a rally? Can it give the politicians a special rate?

If your charity rents space to the public generally, it can rent the space to a political party or candidate if it rents the space at the customary and usual rates, the IRS has said it is most recent pronunciation on the issue.  (See Ready Reference Page:  “IRS Guidance Has Not Changed on Electioneering”). It would be permissible, and not a violation on the prohibition against a 501(c)(3) charity “intervening” in an election at any level of government, so long as the space is available to any party or candidate and you don’t refuse to rent to a particular candidate.

I wouldn’t recommend a “special rate” that is lower than the usual rate because that is not specifically condoned by the IRS and could easily be considered a special subsidy if only one candidate utilized the facility.  I also wouldn’t recommend a higher rate since that could be considered a special penalty.  As a practical matter, it is not likely that all candidates in a general election would want to use the same facility today, especially if the charity has a mission more aligned with one party than another.  Therefore, even though the IRS very seldom enforces the electioneering rules these days, I wouldn’t deviate from what is expressly permitted so that I had a clear justification if the IRS — or anyone else — were to raise a question.

Tuesday, October 8, 2024

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