501(c)(4) Organizations and Nonprofit Political Activity

The Issue

501(c)(4) social welfare organizations are tax-exempt nonprofits that operate primarily to promote the common good and general welfare of their communities. Unlike 501(c)(3) charitable organizations, 501(c)(4)s may engage in unlimited lobbying related to their missions and may participate in limited political campaign activity, on the condition that campaign activity is not their primary activity. Also unlike 501(c)(3)s, 501(c)(4) organizations are not required to disclose their substantial donors to the IRS.

Political campaign activity does not qualify as promoting social welfare. This includes directly or indirectly supporting or opposing a candidate for public office. In addition, contributions to 501(c)(4) organizations are generally not tax-deductible.

Current law does not set a percentage threshold for determining when political campaign activity becomes an organization’s primary activity. Instead, the IRS considers all relevant facts and circumstances.

Since fiscal year 2016, Congress has included language in annual appropriations laws preventing the Treasury Department and IRS from “issuing, revising, or finalizing any regulation, revenue ruling, or other guidance” used to determine whether a 501(c)(4) organization primarily promotes social welfare. 

Impact on Philanthropy

In addition to engaging in political campaign work, 501(c)(4) social welfare organizations can pursue advocacy and lobbying beyond the limits that apply to 501(c)(3) charities. Clear guidelines help these organizations participate in the democratic process while maintaining their social welfare missions.

The Council supports clarification of guidelines for political activity by 501(c)(4) social welfare organizations but strongly opposes any new rules that would dampen nonpartisan activities and civic engagement efforts of nonprofit organizations—including 501(c)(3) charities.

Recent Developments

Regulatory Activity

• In November 2013, the Department of Treasury (Treasury Department) and Internal Revenue Service (IRS) issued proposed guidance regarding tax-exempt, social welfare organizations on candidate-related political activities. These regulations created a more bright-line rule about what type of political activities do not qualify as promoting social welfare for 501(c)(4). The Council submitted comments warning that the proposal could chill civic engagement by 501(c)(3) organizations, conflict with tax laws allowing foundations to fund certain nonpartisan voter education and registration activities, and exceed Treasury’s rulemaking authority
  • The Treasury Department withdrew the rules and promised to publish a revised version in the summer of 2015. Those revised rules have not yet been released.

Legislative Activity (119th Congress)

• The Stopping Foreign Influence in Elections Act (H.R.9771): Introduced in the 119th Congress by Rep. Nicole Malliotakis (R-NY), this bill would prohibit any 501(c) from making contributions to a “political entity” in the two years after it receives any contribution or gift from a foreign national. The bill defines “political entity” to include political committees and 501(c)(4) organizations. The Council opposes this bill.
• End Dark Money Act (H.R.2498): Introduced by Reps. Jason Crow (D-CO) and Nikema Williams (D-GA), this bill permits the Internal Revenue Service to issue new guidelines addressing 501(c)(4) political engagement that would require them to adhere to their social welfare mission or be required to register as a political action committee, disclose their donors, and risk losing their tax-exempt status.

Legal Activity

• Freedom Path v. IRS: In September 2025, a federal district court found that the IRS standards for determining how much political campaign activity a 501(c)(4) may conduct and what qualifies as political activity were unconstitutionally vague. 
  • Although the decision applies only to the organization involved, it could support future legal challenges. It may also create additional uncertainty due to Congress’ restrictions on the IRS from issuing clearer guidance.