Most advocacy groups know the headline difference between a 501(c)(3) and a 501(c)(4). The problems show up in the details: a text that drifts into candidate territory, a donation page with the wrong tax language, a supporter list that moves between affiliated entities with no paperwork. This guide covers what each status means for your digital ads and texts, and how to run both when you have one of each.
The legal differences that shape the program
A 501(c)(3) is a charity. Gifts to it are generally tax-deductible for donors who itemize. In exchange, it may not support or oppose any candidate for public office. That ban is absolute. No amount of candidate activity is allowed. A (c)(3) can lobby, but its lobbying has to stay limited: an insubstantial part of its activities, or within the dollar limits that apply if the organization has made the 501(h) election. It can also run nonpartisan voter registration, voter education and get-out-the-vote work.
A 501(c)(4) is a social welfare organization. Gifts to it are not tax-deductible as charitable contributions. It can lobby without limit as long as the lobbying serves its social welfare purpose. It can also engage in some political activity, including supporting or opposing candidates, as long as political activity is not its primary purpose. The IRS has never set a bright-line percentage for that test. You will hear people cite a "50% rule." That is a rule of thumb, not law, and most counsel will want you well below it. Political spending by a (c)(4) can also be taxable.
Donors to a (c)(4) are generally not publicly disclosed. That can change when the (c)(4) spends on elections. Independent expenditures in federal races are reported to the FEC, and contributions given for that kind of spending can become reportable. State disclosure rules vary, and some reach much further than federal law.
What each entity can say in ads and texts
The (c)(3) can talk about a bill, a policy, an agency or an elected official in connection with an issue. It cannot tell anyone to vote for or against a candidate, and it should treat anything that reads as commentary on a candidate during an election with real caution. A sound (c)(3) text looks like this:
"The state house votes on HB 214 Tuesday. It would cap what families pay for insulin. Call your rep and ask for a yes vote: [link]"
That is lobbying, so its cost counts toward the (c)(3)'s lobbying limit. Track it.
Compare: "Rep. Smith voted against cheaper insulin. Remember that in November." For a (c)(3), that crosses the line. Pairing an official's record with the election is the kind of framing the IRS treats as campaign intervention.
The (c)(4) can send the second text, provided its political activity stays secondary to its social welfare work and it meets any disclaimer and reporting rules that apply.
Nonpartisan get-out-the-vote work from a (c)(3) has to be nonpartisan in fact. "Election Day is Tuesday. Find your polling place: [link]" is fine. Choosing who receives that text based on how you expect them to vote is a problem. So is pairing turnout reminders with issue messages that line up neatly with one candidate.
Disclaimers, platform rules and texting compliance
Most major ad platforms require advertisers running ads about social issues, elections or politics to verify their identity and carry a "paid for by" label. That covers many (c)(3) issue ads. Each entity should complete that authorization in its own name so the label matches the entity actually paying. A (c)(4) ad that expressly advocates for or against a federal candidate also needs the disclaimer federal election law requires, and state races carry their own disclaimer rules.
For texts, identify the sender at the start of a conversation, include opt-out language ("Reply STOP to opt out"), and respect quiet hours. The common standard is 8 a.m. to 9 p.m. in the recipient's local time, which comes from federal telemarketing rules. Some states set narrower windows. Consent rules differ between broadcast texting, which requires opt-in, and peer-to-peer texting, and they apply to each entity separately.
We write every text and the client approves each send in our approval portal. Before a send can be approved, the portal checks for a working link, a refcode, opt-out language and quiet hours. For organizations with two entities, that review is also the moment to confirm the text is going out under the right name.
Tax language on donation asks
Only the (c)(3) can say "tax-deductible," and it should. "Your gift is tax-deductible to the extent allowed by law" belongs on the (c)(3) donation page and can appear in ad copy and texts.
The (c)(4) has the opposite obligation. Federal law requires most non-charitable organizations that solicit contributions, which includes most fundraising (c)(4)s, to state conspicuously that gifts are not tax-deductible as charitable contributions. Put that line on every (c)(4) form and solicitation. The mistake to watch for is ordinary: a donor-acquisition ad written for the (c)(3) gets duplicated for the (c)(4) with the deductibility line still in it.
Each entity needs its own donation pages, its own payment account and its own codes. Every ad and text gets a refcode on ActBlue, or a source code on EveryAction, so each gift is matched to the entity and the message that raised it.
Monthly giving programs
Recurring gifts work differently for each entity. A (c)(3) monthly donor gets the deduction and should get a year-end summary of gifts. A donor needs a written acknowledgment for any single gift of $250 or more to claim the deduction, so set up receipts before the program launches.
A (c)(4) monthly program sells the work itself. The case is the lobbying and campaigning it can do without the limits a charity faces, so the ask should say that plainly: "Your monthly gift pays for the pressure campaign on HB 214, including the lobbying our charity can't fund at this scale."
When you ask for a monthly gift by text or ad, state the amount and frequency in the message. If the donation page preselects the recurring option, make it obvious and easy to change. Donors who did not realize they signed up for a monthly gift tend to dispute the charges.
Running both entities without mixing them
Many organizations operate a (c)(3) with an affiliated (c)(4). That structure holds up when the separation is real in the books and in daily practice. A working checklist:
- Separate bank accounts, donation forms, payment accounts and ad accounts, each verified in its own entity's name.
- A written cost-sharing agreement covering staff time, office space, software and shared vendors, with time records that support the split.
- The (c)(3) never pays for (c)(4) ads, texts or creative, even temporarily with a plan to reimburse.
- Vendors invoice each entity for its own work.
- Distinct refcode or source-code naming so reports never blend the two entities' money.
Lists need the most care. A (c)(3) handing its supporter list to the (c)(4) for free is a subsidy from the charity. The usual approach is a rental or a list exchange at fair market value, with a written agreement. Even then, be careful. A charity's list used for the (c)(4)'s electoral work draws scrutiny. Texting consent is a separate problem: someone who opted in to texts from the charity has not necessarily opted in to texts from the (c)(4). Have counsel review any list movement between entities, and plan to collect fresh consent.
Choosing which entity runs a campaign
Start from the ask. If the goal is a tax-deductible gift or nonpartisan civic participation, the (c)(3) runs it. If the message needs to name a candidate or push lobbying past what the charity can carry, the (c)(4) runs it. If a campaign needs both, build two versions with separate creative, separate pages and separate codes, and approve them separately.
This is general information, not legal advice. Check specifics with your compliance counsel.
If you run a (c)(3) and a (c)(4) and want ads and texts built and coded separately for each, talk to us.