A grant agreement that bars all “political activities” can unnecessarily limit nonprofits. The Internal Revenue Code only prohibits “partisan political activities” that support or oppose candidates. It does not prohibit election activities conducted on a nonpartisan basis. Not specifying “partisan” creates confusion among nonprofits as to whether or not they can carry out even fully allowable nonpartisan voter activities such as voter education or candidate forums commonly undertaken as part of the sector’s longstanding commitment to active civic engagement.
Further, the IRS does not require either private or public foundations to include a statement related to partisan political activities at all. It’s sufficient to state funds should be used solely for charitable and educational purposes as outlined in the Internal Revenue Code.
Grant Agreement Templates for Private Foundations: The following grant agreement templates were developed by the Council on Foundations and Center for Lobbying in the Public Interest, a program of the National Council of Nonprofits, with the assistance of Marcus Owens, director of the IRS Exempt Organizations Division (1990–2000):
- Grant Template with language prohibiting partisan political activity
- Key language in template: “No funds may be used for partisan political activities, which are prohibited under Section 501(c)(3). However, the grantee may engage in any voter education and voter engagement activities conducted on a nonpartisan basis.”
- Grant Template without a specific partisan political prohibition
- Key language in template: “Grant funds will be used solely for charitable, religious, scientific or educational purposes as described in Section 1 70(c)(2)(B) of the Internal Revenue Code.”
