Act Indiana is a 501c4 non-partisan social welfare organization established by Faith in Indiana to extend the capacities available to people of faith and marginalized people in Indiana to act for racial and economic justice.
A 501(c)(3) may, however, conduct various nonpartisan election-related activities. It may:
engage in limited lobbying, including ballot-measure advocacy;
conduct public education and training sessions about participation in the political process;
educate candidates on public issues;
canvass the public on issues;
sponsor candidate debates (with certain restrictions);
conduct nonpartisan get-out-the-vote activities, voter registration, and education drives; and
establish a 501(c)(4).
Contributions to a 501(c)(3) are deductible from a donor’s federal income tax and are not subject to federal gift tax.
Act Indiana is a 501(c)(4) social welfare organization that is allowed to pursue educational, lobbying, and some limited political activities (“social welfare” is defined as promoting social improvement and civic betterment). Education and lobbying on social and economic issues qualify as social welfare activities, but participation in partisan political campaigns does not.
No limit exists on the amount of lobbying a 501(c)(4) may conduct, including working for the passage or defeat of ballot measures.
Unlike Faith in Indiana, Act Indiana may carry out political activities without jeopardizing its tax-exempt status as long as it is engaged primarily in non-electoral activities that promote social welfare. It may:
engage in all of the lobbying and advocacy activities permitted for a 501(c)(3), but without limit;
endorse candidates and publicize its endorsements;
publicly distribute voter guides and other communications that may support or oppose candidates (with certain restrictions);
Contributions to any 501(c)(4) are not tax-deductible.
By law, Act Indiana and Faith in Indiana MUST be separate organizations.
Faith in Indiana is a 501(c)(3) public charity nonprofit (as are the congregations that make up Faith in Indiana’s membership). Under current IRS rules, that means that contributions to Faith in Indiana can be claimed as deductions on federal taxes. In exchange, 501c3 organizations cannot act in any way that appears to endorse one candidate or political party.
A 501(c)(4) social welfare organization like Act Indiana is also a nonprofit organization. However, unlike a 501(c)(3) organization, contributions to 501(c)(4)s are not tax deductible. 501(c)(4) organizations may conduct unlimited lobbying. In addition, they may engage in electoral political campaign work, but only as a secondary activity.
Faith in Indiana’s governing members are 501(c)(3) religious and community organizations.
Congregations are not being asked to join Act Indiana
How is Act Indiana Funded?
Act Indiana will be funded by its individual members and by foundations and other entities that have the latitude to contribute to 501(c)(4) organizations.
No churches will be asked to fund Act Indiana. 501(c)(3) funds cannot be used to pay for 501(c)(4) activities.
No contribution to Faith in Indiana(from either donors or foundations) can be used to pay for Act Indiana.
Who leads Act Indiana?
Act Indiana has its own Board of Directors and its own Bylaws. A majority of the board members are appointed by the Faith in Indiana Board of Directors. And the Faith in Indiana Board of Directors has the power to disband the Act Indiana board at any time.
Act Indiana will employ its own staff members. In addition, Act Indiana has established a resource sharing agreement by which it reimburses Faith in Indiana for staff time.
Is there a separate office? What about other resources?
As with staff, there is no separate Act Indiana office or infrastructure.
Instead, Act Indiana must lease office space, materials, equipment and infrastructure from Faith in Indiana at the fair market rate.
This sounds really complicated!
It’s true. It is really complicated. However, the IRS makes provisions for a 501(c)(3) and 501(c)(4) organizations to coexist in the manner outlined above, and many other organizations have multiple entities operating under the same umbrella.
In addition, we are working with the one of Indiana’s top legal firms and a top Certified Public Accounting firm locally to ensure that both Act Indiana, Faith in Indiana, and any of our affiliated partners are fully compliant with the law.
Why am I being asked to opt in to receive communications?
As a separate organization, Act Indiana must cultivate its own database of members and contacts.
It cannot use Faith in Indiana’s list of members without paying the fair market rate for that information.
Act Indiana rented Faith in Indiana’s lists for the purpose of an initial outreach to its leaders because we believe that many individuals involved with Faith in Indiana will want to hear more about how Act Indiana will expand our capacity to build power in the state.
If you do not opt in, you will continue to hear from Faith in Indiana but you will not receive communications from Act Indiana
Is Act Indiana Partisan?
Act Indiana is NOT a partisan organization. The expanded capacities will be used to hold decision makers accountable and to support decision makers from any major political party, as long as those decision makers share our values and our policy priorities.
Act Indiana is not related to the work of any political party at the state or federal level. In fact, Act Indiana was created because people of faith and our partners feel, increasingly, that neither the Democratic nor the Republican party serve our interests adequately.
Act Indiana does not plan to endorse candidates running for office. Act Indiana does plan to educate the public on the candidate position on our issue agenda.