Political Activities Compliance Initiative: Executive Summary

With the enactment of the Revenue Act of 1954, Congress barred section 501(c)(3) tax-exempt organizations (including churches) from political campaign intervention by adding language to the Internal Revenue Code that disqualifies them from exemption if they participate in, or intervene in (including the publicizing or distributing of statements), any political campaign on behalf of any candidate for political office. In 1987, Congress amended section 501(c)(3) to clarify that the prohibition on political campaign intervention applies to activities in opposition to, as well as on behalf of, any candidate for public office.

There has been a dramatic increase in the amount of money financing campaigns. The level of funds going into the campaign area from organizations regulated by the Federal Election Commission (FEC) has increased significantly. For the 2003-2004 election cycle, the FEC reported that over $10 billion was spent, more than double the $4 billion spent during the 1999-2000 election cycle (the last election cycle that included a presidential election).

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