Short Answer
Do limits on political activity of 501(c)(3) organizations apply to
their activities outside the US?
Yes. There is no exception for foreign activity.
A 501(c)(3) organization does have to be U.S. based to qualify for the charitable deduction from federal income taxes (26 U.S.C. § 170), however, while the charitable deduction from gift and estate taxes also includes foreign charities.
Analysis
The prohibition on non-profits engaging in politics in the United States is found at 26 U.S.C. § 501(c)(3) which states:
(c)(3)Corporations, and any community chest, fund, or foundation,
organized and operated exclusively for religious, charitable,
scientific, testing for public safety, literary, or educational
purposes, or to foster national or international amateur sports
competition (but only if no part of its activities involve the
provision of athletic facilities or equipment), or for the prevention
of cruelty to children or animals, no part of the net earnings of
which inures to the benefit of any private shareholder or individual,
no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation (except
as otherwise provided in subsection (h)), and 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.
and 26 U.S.C. § 501(h) which states:
(h)Expenditures by public charities to influence legislation
(1)General rule
In the case of an organization to which this subsection applies,
exemption from taxation under subsection (a) shall be denied because a
substantial part of the activities of such organization consists of
carrying on propaganda, or otherwise attempting, to influence
legislation, but only if such organization normally—
(A)makes lobbying expenditures in excess of the lobbying ceiling
amount for such organization for each taxable year, or
(B)makes grass roots expenditures in excess of the grass roots ceiling
amount for such organization for each taxable year.
(2)Definitions
For purposes of this subsection—
(A)Lobbying expenditures
The term “lobbying expenditures” means expenditures for the purpose of
influencing legislation (as defined in section 4911(d)).
(B)Lobbying ceiling amount
The lobbying ceiling amount for any organization for any taxable year
is 150 percent of the lobbying nontaxable amount for such organization
for such taxable year, determined under section 4911.
(C)Grass roots expenditures
The term “grass roots expenditures” means expenditures for the purpose
of influencing legislation (as defined in section 4911(d) without
regard to paragraph (1)(B) thereof).
(D)Grass roots ceiling amount
The grass roots ceiling amount for any organization for any taxable
year is 150 percent of the grass roots nontaxable amount for such
organization for such taxable year, determined under section 4911.
(3)Organizations to which this subsection applies
This subsection shall apply to any organization which has elected (in
such manner and at such time as the Secretary may prescribe) to have
the provisions of this subsection apply to such organization and
which, for the taxable year which includes the date the election is
made, is described in subsection (c)(3) and—
(A)is described in paragraph (4), and
(B)is not a disqualified organization under paragraph (5).
(4)Organizations permitted to elect to have this subsection apply
An organization is described in this paragraph if it is described in—
(A)section 170(b)(1)(A)(ii) (relating to educational institutions),
(B)section 170(b)(1)(A)(iii) (relating to hospitals and medical
research organizations),
(C)section 170(b)(1)(A)(iv) (relating to organizations supporting
government schools),
(D)section 170(b)(1)(A)(vi) (relating to organizations publicly
supported by charitable contributions),
(E)section 170(b)(1)(A)(ix) (relating to agricultural research
organizations),
(F)section 509(a)(2) (relating to organizations publicly supported by
admissions, sales, etc.), or
(G)section 509(a)(3) (relating to organizations supporting certain
types of public charities) except that for purposes of this
subparagraph, section 509(a)(3) shall be applied without regard to the
last sentence of section 509(a).
(5)Disqualified organizations
For purposes of paragraph (3) an organization is a disqualified
organization if it is—
(A)described in section 170(b)(1)(A)(i) (relating to churches),
(B)an integrated auxiliary of a church or of a convention or
association of churches, or
(C)a member of an affiliated group of organizations (within the
meaning of section 4911(f)(2)) if one or more members of such group is
described in subparagraph (A) or (B).
(6)Years for which election is effective
An election by an organization under this subsection shall be
effective for all taxable years of such organization which—
(A)end after the date the election is made, and
(B)begin before the date the election is revoked by such organization
(under regulations prescribed by the Secretary).
(7)No effect on certain organizations
With respect to any organization for a taxable year for which—
(A)such organization is a disqualified organization (within the
meaning of paragraph (5)), or
(B)an election under this subsection is not in effect for such
organization, nothing in this subsection or in section 4911 shall be
construed to affect the interpretation of the phrase, “no substantial
part of the activities of which is carrying on propaganda, or
otherwise attempting, to influence legislation,” under subsection
(c)(3).
(8)Affiliated organizations
For rules regarding affiliated organizations, see section 4911(f).
and 26 U.S.C. § 4911 which states in the definitional subsection:
(d)Influencing legislation
(1)General rule
Except as otherwise provided in paragraph (2), for purposes of this
section, the term “influencing legislation” means—
(A)any attempt to influence any legislation through an attempt to
affect the opinions of the general public or any segment thereof, and
(B)any attempt to influence any legislation through communication with
any member or employee of a legislative body, or with any government
official or employee who may participate in the formulation of the
legislation.
(2)Exceptions
For purposes of this section, the term “influencing legislation”, with
respect to an organization, does not include—
(A)making available the results of nonpartisan analysis, study, or
research;
(B)providing of technical advice or assistance (where such advice
would otherwise constitute the influencing of legislation) to a
governmental body or to a committee or other subdivision thereof in
response to a written request by such body or subdivision, as the case
may be;
(C)appearances before, or communications to, any legislative body with
respect to a possible decision of such body which might affect the
existence of the organization, its powers and duties, tax-exempt
status, or the deduction of contributions to the organization;
(D)communications between the organization and its bona fide members
with respect to legislation or proposed legislation of direct interest
to the organization and such members, other than communications
described in paragraph (3); and
(E)any communication with a governmental official or employee, other
than—
(i)a communication with a member or employee of a legislative body
(where such communication would otherwise constitute the influencing
of legislation), or
(ii)a communication the principal purpose of which is to influence
legislation.
(3)Communications with members
(A)A communication between an organization and any bona fide member of
such organization to directly encourage such member to communicate as
provided in paragraph (1)(B) shall be treated as a communication
described in paragraph (1)(B).
(B)A communication between an organization and any bona fide member of
such organization to directly encourage such member to urge persons
other than members to communicate as provided in either subparagraph
(A) or subparagraph (B) of paragraph (1) shall be treated as a
communication described in paragraph (1)(A).
