What Does Citizens United Ruling Mean for Nonprofits?

The U.S. Supreme Court issued a ruling yesterday in Citizens United v. Federal Election Commission that overturned previous precedent about corporations making expenditures on behalf of candidates for elected office. The Court’s opinion reversed the 1990 ruling in Michigan’s Austin v. Chamber of Commerce case, which prohibited corporate direct expenditures in candidate elections.

Attorneys and legal professionals are still analyzing the full implications of this ruling on all corporations. At this time we understand the ruling to mean the following:

The ruling has an impact on 501(c)(4) and 501(c)(6) noncharitable nonprofit organizations in the state of Michigan, who had previously been able to make endorsements of candidates but been prohibited from making contributions to those candidates. Under this ruling, (c)(4) and (c)(6) noncharitable nonprofits in Michigan would now be able to make independent expenditures in support or opposition to candidates for elected office.

What does this mean for 501(c)(3) charitable nonprofits?
It’s important that charitable nonprofits understand that the Supreme Court’s ruling does not have an impact on 501(c)(3) charitable nonprofit organizations, who are still subject to the rulings of section 501(c)(3) of the IRS code. All 501(c)(3) nonprofit organizations are prohibited from endorsing or opposing candidates for elected office and from making contributions to or expenditures on behalf of a candidate.

While 501(c)(3) charitable nonprofits cannot endorse or oppose candidates or make expenditures on their behalf, they are absolutely allowed to be actively involved in nonpartisan election activity such as voter registration, voter education, candidate education and get-out-the-vote efforts. These activities will be more important than ever in ensuring an active and well informed citizenry within our state and communities, given the increased number of dollars that will become available to individual candidates as a result of this ruling.

Still unsure what this means for your organization?
The Alliance for Justice is hosting a conference call on Monday, January 25 at 3:00 pm EST to discuss the meaning and impact of the Citizens United decision. The call will explain what effect Citizens United will have, discuss potential implications of the case, and answer questions. RSVP to KeiAnna@afj.org. Call-in information will be sent out to confirmed registrants.

Michigan Nonprofit Association, through our Michigan Participation Project, will continue to provide tips and resources to help 501(c)(3) nonprofits incorporate these critically important civic engagement activities into the work that they’re already doing. To learn more, visit www.mnaonline.org/public_policy_resources.asp or contact me at taurora@mnaonline.org.

*Please note that Michigan Nonprofit Association does not provide legal advice. If you are in need of legal advice regarding this ruling, contact your attorney.

Tiffany AuroraSubmitted by Tiffany Aurora, Public Policy Manager for Michigan Nonprofit Association.

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3 Responses

  1. [...] What Does Citizens United Ruling Mean for Nonprofits? [...]

  2. [...] our friends at the Hawaii Alliance of Nonprofit Organizations. We can also turn to the recent Citizens United v. FEC ruling that overturned previous precedent about corporations making expenditures on behalf of candidates [...]

  3. I DO NOT UNDER A COMPANY THAT NON-PROFIT, DOES NOT PAY STATE,
    FEDERAL TAXES, IF THEY MAKE A PROFIT WHO GETS IT.

    I BELIEVE A NON-PROFIT BUSINESS, SHOULD CLAIM THE SAME A PRIVATE
    BUSINESS

    IF NON-PROFIT BUSINESS, THEN THERE SHOULD BE NO TAXES, IT’S
    NON-PROFIT.

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