At this moment, I would like to thank the evangelical community because, I will tell you what, the support they have given me—and I’m not sure I totally deserve it—has been so amazing. And has been such a big reason I’m here tonight. They have much to contribute to our policies. Yet our laws prevent you from speaking your mind from your own pulpits. An amendment, pushed by Lyndon Johnson, many years ago, threatens religious institutes with a loss of their tax-exempt status if they openly advocate their political views. Their voice has been taken away. I will work hard to repeal that language and to protect free speech for all American.
—Donald Trump, Republican National Convention speech, July 21, 2016
We value the right of America’s churches, pastors, and religious leaders to preach and speak freely according to their faith. Republicans believe the federal government, specifically the IRS, is constitutionally prohibited from policing or censoring the speech of America’s churches, pastors, and religious leaders. We support repeal of the Johnson Amendment, which restricted First Amendment freedoms of all nonprofit organizations by prohibiting political speech.
In 1954, largely due to the efforts of then-Senator Lyndon Johnson, Congress enacted what is referred to as the Johnson Amendment to Section 501(c)(3) of the Internal Revenue Code. The amendment added the language currently contained in Section 501(c)(3) that refers to an organization exempt under that Section as one “which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” The prohibition on political campaign intervention has been broadly interpreted by the Internal Revenue Service and applies to all organizations exempt under Section 501(c)(3), including churches and other religious institutions.
Although Donald Trump has recently brought fresh attention to the matter, the call to repeal the Johnson Amendment is not a new one. Since 2008, the conservative Christian group Alliance Defending Freedom has organized the annual “Pulpit Freedom Sunday” event to encourage pastors to give election-themed sermons and proudly claims on its website that “2,032 pastors have violated the Johnson Amendment since 2008.” Alliance Defending Freedom has made clear that the event is intended to provoke the IRS into revoking the tax-exempt status of a church that is actively violating the prohibition so that the revocation, and the Johnson Amendment itself, can be challenged in court.
The argument often presented for repeal of the Johnson Amendment asserts that it prohibits religious institutions and their leaders from speaking freely on political candidates and elections in violation of the First Amendment. However, this isn’t entirely accurate. The more accurate statement is that religious institutions that wish to retain their tax-exempt status under Section 501(c)(3) are prohibited from speaking freely with respect to political candidates and elections if such speech constitutes intervention in a political campaign. Religious institutions (or other exempt entities) that are willing to cede their tax-exempt status under Section 501(c)(3) are free to engage in as much political speech and campaign intervention as they would like (subject, of course, to any other applicable election laws).
Of course, the prohibition on campaign intervention is not the only requirement for exemption under Section 501(c)(3). Section 501(c)(3) organizations of all types, including religious institutions, are required to be “organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purpose, or to foster national or international amateur sports competition…or for the prevention of cruelty to children or animals.” They are also prohibited from allowing their earnings to inure to the benefit of any individual or from engaging in more than an insubstantial amount of lobbying activities.
In short, a number of restrictions are placed on organizations seeking tax exemption under Section 501(c)(3). Complying with these limitations is the tradeoff that is mandated in exchange for such exemption. These restrictions are in place to ensure that all 501(c)(3) organizations, including religious institutions, operate for the social and public benefit purposes for which they were created and not for partisan interests or private benefit. It also should be noted that the prohibition on political campaign intervention applicable to 501(c)(3) organizations does not generally extend to the acts or speech of individuals associated with a 501(c)(3) organization when acting in their individual capacity without use of any organizational assets—although this can admittedly be tricky (and the lines rather blurry) in the context of public figures who are strongly identified with a 501(c)(3) organization, such as religious leaders.
Moreover, if the Johnson Amendment were to be repealed in its entirety, it would presumably enable all organizations exempt under Section 501(c)(3), and not just churches, to engage in campaign intervention activities without jeopardizing their exempt status. The consequences of such a shift would be widespread, with potentially large amounts of election money flowing through tax-exempt nonprofits and the possibility of charitable assets being diverted to campaign activities. It could also make obtaining exemption under Section 501(c)(3) (which has recently been made easier for certain small organizations by the introduction of the Form 1023-EZ) an attractive option for individuals seeking to circumnavigate applicable rules. Churches may be particularly susceptible to such abuse due to the fact that they are not required to file an annual informational return with the IRS, as most other organizations exempt under Section 501(c)(3) are, and therefore do not necessarily receive the same level of oversight