501c3s, 501c4s, PACs, and SuperPACs
Understanding the nuances of different types of non-profit and political organizations in the United States, such as 501(c)(3), 501(c)(4), Political Action Committees (PACs), and Super PACs, can be a daunting task. These designations come from the Internal Revenue Code and they refer to the sections of the tax code that govern their operations. There are other types of organizations identified within the code, and actually PACs are designated as a 527, not a non-profit but covered instead the same section as political candidates. Here, I will compare and contrast these entities in terms of purpose, taxation, fundraising, lobbying, and political involvement.
I am not a lawyer and this is not advice - it is my own interpretation of the codes for your education only.
501(c)(3) Organizations
501(c)(3) is the most common type of nonprofit organization in the United States. They include a wide range of organizations, such as schools, religious groups, scientific institutions, and charities. The primary purpose of these entities is to serve the public good in various areas, including education, religion, science, and charity.
Contributions to 501(c)(3)s are tax-deductible for the donor. However, they are strictly limited in their ability to engage in political activities. They are prohibited from directly or indirectly participating in any political campaign on behalf of or in opposition to any candidate for public office. They can engage in some lobbying, but it cannot constitute a substantial part of their activities.
501(c)(4) Organizations
501(c)(4) organizations are non-profit entities that promote social welfare. Their work often involves lobbying for legislation and advocating for social issues. They are also allowed to participate in political campaigns and elections, as long as these activities are not their primary activity.
Donations to 501(c)(4) organizations are not tax-deductible. Because of their allowance for some political activity, they have become a popular choice for organizations that want to influence policy and politics.
| Activity | 501(c)(3) Public Charity | 501(c)(4) |
| Lobby for/against legislation | Limited | Unlimited |
| Support/oppose ballot measures | Limited | Unlimited |
| Conduct public education and training sessions about participation in the political process | √ | √ |
| Educate candidates on issues within purview of the organization | √ (must offer information to all candidates) | √ |
| Sponsor a debate between candidates, where all viable candidates are invited and given equal opportunity to speak on a broad range of issues | √ | √ (c4s that spend on debates for federal candidates cannot support/oppose or endorse federal candidates – 11 CFR 110.13) |
| Distribute voter guides to the public that set out the candidates’ views on a broad range of issues | √ | √ |
| Distribute voter guides to the public that compare candidates on issues of importance to the organization | x | √ |
| Rent mailing lists and facilities at fair market value to other organizations, legislators, and candidates | √ (if rent, must allow any candidate to rent at same price) | √ |
| Conduct nonpartisan get-out- the-vote activities, voter registration, and education drives | √ | √ |
| Conduct voter registration and GOTV activities based on party affiliation or how people will vote | x | √ |
| Conduct nonpartisan voter protection activities | √ | √ |
| Establish a 501(c)(4) | √ | √ |
| Endorse candidates and publicize its endorsements | x | √ |
| Fund independent expenditures in support of or opposition to a candidate | x | √ |
| Make campaign contributions (monetary or in-kind) | x | Depends on election law (prohibited for federal candidates; permissible in some states) |
| Establish and pay for the administrative and fundraising costs of a connected political organization (separate segregated fund) | x | √ |
| Criticize sitting elected officials | √ | √ |
| Compare organization’s issue position with that of a candidate | x | √ |
| Connect organization’s criticism of public official to voting in an election | x | √ |
| Highlight the differences between candidates for public office on a high-profile issue on which the candidates have diverging views | x | √ |
| Ask candidates to sign pledges on any issue | x | √ |
| Post partisan political messages on social media | x | √ |
Credit for the chart above to Bolder Advocacy
Political Action Committees (PACs)
PACs are political entities organized for the purpose of raising and spending money to elect and defeat candidates. They can contribute to candidates' campaigns directly, but they have limits on the amount they can donate to each candidate or committee and on the amount they can receive from individuals.
PACs must register with the Federal Election Commission (FEC), disclose their donors, and report their expenditures. Contributions to PACs are not tax-deductible, and corporations or labor unions cannot contribute directly to them (although they can sponsor separate PACs).
Super PACs
Super PACs, or Independent Expenditure-Only Committees, came into existence following the 2010 Supreme Court decision in Citizens United v. Federal Election Commission. They can raise unlimited sums of money from corporations, unions, and individuals but are not permitted to make contributions directly to federal candidate campaigns.
Super PACs must also register with the FEC, disclose their donors, and report expenditures. They differ from traditional PACs in that they can only spend their funds independently, meaning they cannot coordinate with the candidates they support.