Cracks in the Wall of Separation

In this political season, pastors and leaders on nonprofit organizations are constantly reminded to refrain from engaging in political activities or endorsing political candidates. This reminder is given with the threat of losing tax exempt status. Have you ever wondered how it came to be that churches in the United States of America have been prohibited from engaging in political activities? After all, in a nation founded on the principle of religious liberty, doesn’t the idea of separation of church and state protect the church from control or intrusion by the government?
The current level of prohibition goes back to 1954 when Senator Lyndon Johnson proposed an amendment to Section 501(c)(3) of the Internal Revenue Code (IRC) that would prohibit nonprofit organizations from endorsing or opposing political candidates. Why did he do this? Because a nonprofit organization (not a church) had opposed his 1948 candidacy to the Senate.

Prior to 1954, the IRC only restricted nonprofit organizations from devoting more than a ‘substantial part’ (interpreted to be 5%-15%) of their activities to political lobbying. This restriction was enacted in 1934. Prior to that time, there were no restrictions on the lobbying efforts of nonprofit organizations.

Since 1934, only one church in U.S. history has lost its tax exempt status due to engaging in political activities. In May 2000, the D.C. circuit of the U.S. Court of Appeals upheld the IRS decision to revoke the tax exempt determination letter of the Branch Ministries, Inc. known as the Church at Pierce Creek, located in Binghamton, NY as a result of ads the church had placed opposing the 1992 presidential candidacy of Gov. Bill Clinton.

What happens to a church that loses tax exempt status? In its opinion, the court addressed the consequences to the Church at Pierce Creek of losing its IRS determination letter. We can discuss these in a future post.