Social Media and Nonprofit Status
Andrew Mirsky at K Street Cafe raises an important and excellent question regarding non-profits, social networks and third party content:
Question: Can a 501c3 private foundation or public charity put its tax-exempt status at risk by hosting a social media platform? Specifically, could the advocacy and electioneering activities of individuals and groups using that social media platform be treated as the direct action – or facilitation of direct action – by that foundation of activities inconsistent with its tax exempt 501(c)(3) status?
The key to this question is the IRS’ “Exception Requirements” which say a non-profit “may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.” So, to what degree would the action conducted by visitors and commenters to a non-profit site hinder that organization’s independent and non-action status?
Mirksy points out that while the IRS began inquiry into this question, action has not particularly moved forward, so we are left with a basic best practices guide using the sites own Terms of Use. He comes to four basic conclusions:
(1) Generally, hosting – in and of itself – should not be deemed equivalent to direct action by the hosting website.
(2) Terms of Use should clearly state limitations and restrictions on activities in using the site that would not be permitted by the hosting organization if performed directly, such as electioneering and advocacy.
(3) A hosting organization’s role should be limited only to periodic monitoring and not active editing, auditing or supervision, and definitely not screening submissions – unless intending to directly edit submissions prior to posting, which for various reasons may not desirable or practical.
(4) A hosting organization need be responsive to alerting to complaints about violations of Terms of Use and enforcement of policies, including enforcing “take down” policies similar to the same kinds of rules under the Digital Millennial Copyright Act.
So, as far as a best practice guide can go, this is satisfactory. But it seems this shouldn’t be enough. I saw a conference about a year ago in which a lawyer described to what degree organizations were responsible for third party content in the comment sections of articles and postings … unfortunately I can’t locate it now. But, to give just a bit of insight, a search of the terms “responsible for third party content” brings up nothing but “Terms of Use” for a number of different organizations. Which is both amusing and insightful into how this problem is currently being addressed.
I’m not a lawyer, and haven’t had any particular experience with this issue. But I do have some thoughts, in that it seems kind of silly to hold the organization responsible for third party content (unless of course the stated purpose of the platform is to encourage this type of action … that’s a different issue entirely). Let’s look at a parallel. During a fundraiser, the guests at one table begin a discussion about either a political candidate or a specific piece of legislation. Should the organization be responsible for the content of this conversation? Does the organization implicitly provide consent for this discussion simply due to the fact that it is hosting the event? What’s the legal precedent here, and why wouldn’t it carry over to the website. We need to move beyond that idea that the permanence of the web is any different from any other type of communication.
Anyway, Mirsky’s post is as good as anything I could find on this issue. So it’s worth referencing if this topic comes up with an organization. Personally, I’d like to see some finality here in regards to how the IRS is going to approach this issue. As more and more non-profits move to the web, engaging their publics is going to be an important part of how they operate, so it would be useful to have a finite determination on how to conduct this engagement.
