Nonprofit email journeys in Washington, DC: FEC and IRS rules to respect

What to take away

Why Washington, DC nonprofits meet both regimes

Washington is home to advocacy groups, trade associations, foundations and PACs that sit close to federal policy. A single list can feed a donation appeal, an action alert and a candidate-related message, and each is governed by a different body. The Internal Revenue Service decides what a tax-exempt nonprofit may say and how it must receipt gifts. The Federal Election Commission (FEC) regulates committees that raise and spend money in federal elections and the use of donor data that appears in their reports.

This article covers federal rules only. It does not review District of Columbia campaign finance or charitable solicitation law, which a DC-based organization should check separately.

IRS limits on campaign activity in email journeys

All section 501(c)(3) organizations are prohibited from participating in any political campaign on behalf of or in opposition to any candidate for elective public office. The IRS states that the prohibition applies at the federal, state and local level, and that a violation may lead to denial or revocation of tax-exempt status and certain excise taxes.

The ban reaches beyond endorsements. According to the IRS, it covers contributions to political campaign funds, public statements of support or opposition made by or on behalf of the organization, and the distribution of materials prepared by others that support or oppose any candidate. For an email program, that includes forwarding a candidate's message to your list.

The IRS lists factors that decide whether a communication is campaign intervention:

The IRS gives the example of a university president whose personally paid column in an official alumni newsletter backs a candidate: because the publication is official, the endorsement is campaign intervention. A signed note from your executive director in a nurture email works the same way.

Nonpartisan activity is treated differently. The IRS says presenting public forums and publishing voter education guides is generally not prohibited, and nor are voter registration and get-out-the-vote drives conducted in a non-partisan manner. Voter education that shows bias in favor of or against a candidate is prohibited.

Lobbying is a separate category. A 501(c)(3) cannot qualify if a substantial part of its activities is attempting to influence legislation, and the IRS describes legislation as action by Congress, state legislatures, local councils or similar bodies, plus public referenda and ballot initiatives. Contacting legislators or urging the public to contact them to support or oppose a bill counts. Educational materials about public policy do not. Tag each advocacy message as lobbying, education or campaign-related.

Donation journeys and IRS acknowledgment rules

The donation stage is where a nonprofit email journey carries the most tax paperwork. IRS Publication 1771 explains two duties.

First, a donor cannot claim a federal deduction for any single contribution of $250 or more without a contemporaneous written acknowledgment from the charity. The charity incurs no penalty for failing to give one, but the donor loses the deduction, and the organization must assist by providing a written statement. That statement contains the organization's name, the amount of any cash gift, a description of any property gift, and either a statement that no goods or services were provided or a description and good-faith estimate of their value.

The publication says the acknowledgment can be a paper copy or can be sent electronically, such as an email addressed to the donor. It must reach the donor on or before the earlier of the date the donor files the return or the return's due date, including extensions. The IRS notes that charities typically send acknowledgments no later than January 31 of the following year. An automated receipt email that fires on every gift is a clean way to meet this, as long as the template carries the required statements.

Second, when a donor makes a payment of more than $75 that is partly a contribution and partly for goods or services, the charity must give a written disclosure statement. It must tell the donor that the deductible amount is limited to the excess over the value of what they received, and give a good-faith estimate of that value. Small print within a larger document might not meet the requirement. The penalty is $10 per contribution, up to $5,000 per fundraising event or mailing, unless reasonable cause is shown. Gala invitations and ticketed events are the usual trigger.

Build both into the journey: a gift of $250 or more fires the acknowledgment template, and a ticket or premium fires the disclosure template. The welcome sequence should set expectations about how and when receipts are sent.

When FEC rules apply to an email

The FEC regulates political committees, not nonprofits as such. If your organization operates a PAC, or a committee sends email through the same platform, the FEC rules attach to the PAC's messages.

The FEC states that a political committee's bulk email of more than 500 substantially similar messages is not a "public communication," but it still needs a disclaimer. Where a nonconnected PAC pays for a communication that no candidate authorized, the disclaimer must give the payer's full name, a permanent street address, phone number or website, and state that no candidate or candidate's committee authorized it. Disclaimers must be clear and conspicuous. For communications paid for by a group, corporation or labor organization and not authorized by a candidate, the FEC lists independent expenditures and electioneering communications as categories that carry that unauthorized-communication disclaimer.

Solicitations by a nonconnected PAC have extra notices. The FEC says they must identify who paid for them, must tell donors that undesignated contributions will be used in connection with a federal election or are subject to the Federal Election Campaign Act, and, for committees whose gross annual receipts normally exceed $100,000, must carry a special notice that contributions are not tax deductible. Keep the PAC footer separate from the charity footer. A single combined footer on a mixed list is a common mistake.

Donor data and list-use limits

Washington organizations often work with FEC data when building prospect lists. The FEC states that information about individual contributors taken from FEC reports cannot be sold or used to solicit contributions or for any commercial purpose, and that its regulations also bar using the information to solicit charitable donations. The citations are 52 U.S.C. 30111(a)(4) and 11 CFR 104.15.

The exceptions are narrow. Committees may compile, sell, rent or trade their own contributor lists, and newspapers, magazines and books may use contributor information if their principal purpose is not soliciting contributions or commercial activity. Anyone can compile the names of political committees themselves, because the restriction covers individual contributor information only.

Committees may seed their reports with up to ten fictitious names to catch misuse, so a nonprofit that appends FEC donor names to its prospect list is easy to detect.

Tag every record with its source and exclude FEC-sourced names from solicitation segments. The segmentation checklist is the place to add that field, and your automation checklist should log what ran and to whom.

Common questions

Official sources