Introduction: §501(c)(4) and §501(c)(3) Local League Organizations
Historically, all local League organizations qualified as tax exempt under IRC §501(c)(4). However, many local League organizations have been approved by the IRS to change their tax exemption status to §501(c)(3).
For local League organizations tax exempt under §501(c)(4), donations are not tax deductible. Therefore, local League organizations, whether they are in the process of applying to change their tax status or they intend to remain qualified under §501(c)(4), should continue to use existing accounts or seek to establish a new account with the League of Women Voters of California Education Fund (LWVCEF). LWVCEF is already qualified under §501(c)(3), and donations to it are tax-deductible.
Donations and other revenues which are appropriately designated by the donor(s) may be deposited by a local League organization into an account at the LWVCEF called a "Local League Education Fund" (LLEF) account. Such an account enables the local League to use such tax deductible donations to fund educational activities. The LWVCEF provides an LLEF activity report to each local League during each fiscal year, and as requested.
How Does My League Organization Establish a LLEF Account with the LWVCEF?
To establish a LLEF account with the LWVCEF, contact the Executive Director at email@example.com or by phone at 916-442-7215. For questions about existing LLEF account activity or reports, please contact Accountant Sonia Diwa at firstname.lastname@example.org or by phone at 916-442-7215.
How Does My League Organization Use a LLEF Account?
To deposit funds into an existing LLEF account, ask donors to make their checks payable to "League of Women Voters of California Education Fund." Send the checks to the LWVC office with the LWVCEF Deposit Slip, which can be found in the Commonly Used Forms page. Retain a copy of each check and the completed deposit slip for your records, and note the date the deposit was mailed to the LWVC.
Spending the LLEF Monies
For large or unusual League projects or activities (but not regular recurring ones), your League organization should request advance approval from the LWVCEF for use of your League's LLEF account monies. You can do so by mailing or e-mailing a completed Local League Education Fund Proposal form. Be sure to provide a full description of the purpose of the project, with specific details on a separate sheet if necessary. You can find this form EF2 in the Commonly Used Forms page.
Once you have received approval from the LWVCEF, pay for the project from your local League organization's funds. If circumstances make it necessary, the LWVCEF will consider making an advance to a League organization based on an approved request, in order to enable a League organization to proceed with a project.
For previously approved and now completed projects or activities, or for recurring, regular League projects and activities, your League organization should request reimbursement from the LWVCEF out of your LLEF account monies. You can do so by mailing or e-mailing a completed Local League Education Fund Project Reimbursement form.
To pay for LWVCEF publications and services (e.g., Voter's Edge bookmarks, Easy Voter Guides, etc.) with LLEF monies, designate "To be paid by LLEF account" on the order form or invoice, have an authorized person sign the order form, and return it to the LWVCEF.
For other uses of LLEF monies, such as making a donation to the LWVCEF or paying a portion of PMP, you should communicate in writing to the LWVC office.
How May LLEF Monies Be Used?
LLEF monies may be used to undertake educational activities, including such things as voter service activities and studies. These funds may not be used for advocacy or to support activities that are of benefit to League members only, such as membership recruitment, councils/conventions, annual meetings, etc.
Here are some additional guidelines from the IRS for use of Sec. 501(c)(3) funds:
- The project must be educational. The project must be intended for the purpose of informing the public in a fair and objective manner. As part of the project your League organization cannot urge any action to affect federal, state or local legislation. And of course the project cannot involve work with political parties or candidates for office, other than nonpartisan voter service activities–it cannot seek to influence the outcome of an election for a public office.
- The project must serve the general public, not League members exclusively. Many of the basic activities performed by League organizations at the community level may be appropriate Sec. 501(c)(3) activities. For example, local League organizations may use LLEF monies to:
- Conduct nonpartisan voter registration and get-out-the-vote (GOTV) efforts
- Conduct nonpartisan candidate forums
- Promote civic education initiatives
- Fund local issue studies
- Conduct community issue forums, provided there is no advocacy for a particular bill or ballot measure
- Organize local government observer corps
- Conduct leadership training
The following is a table of some of the activities for which LLEF monies may be used, and the percentage of each activity can be covered using such funds.
|Voter Service||100%||Candidate forums, educational publications, voter registration drives,
and Mock Election
|Office expenses and
|45%**||Postage, rent, insurance, telephone, electricity, furniture, copier lease, stationery and/or supplies, etc.|
|VOTER or other newsletters||45%**||Printing and postage|
|LLEF fundraising campaigns, including special events to benefit the LLEF||100%||Room rentals, food, speaker fees, etc.|
|Purchase of Voter Service
|100%||Voter's Edge Bookmarks, Easy Voter Guides, Guide to California Government books, etc.|
|Donations to the LWVCEF
or another LLEF to support
a particular project
|100%||Voter's Edge California, Easy Voter Guide, etc.|
|Creation and maintenance
of Web sites
|45%**||My League Online (MyLO)|
|LWVC PMP obligation||25%|
|LWVUS PMP obligation||50%|
** The allowable Local League Education Fund-funded portions of administration, Web site and VOTER expenses are based on LWVUS estimates intended to represent typical local League activity. If you request a higher percentage of reimbursement, please be prepared to provide detailed supporting documentation to justify your request. For example, if the content of your Web site is 75 percent educational information, and your League would like to use Education Fund monies for 75 percent of the overall cost of the maintaining it, you must provide a word count, screen print-outs or other supporting documentation along with your request for reimbursement.