Released in September 2012, the third edition of The Connection: Strategies for Creating and Operating 501(c)(3)s, 501(c)(4)s, and Political Organizations explains the different roles and functions of charities, social welfare organizations, PACs and other types of nonprofits. We clarify the federal rules and illuminate the ways these organizations can work together to accomplish common goals.

The third edition reflects the fundamental changes that have occurred in the wake of the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, allowing corporations and labor unions to make independent expenditures, and the decision by the U.S. Court of Appeals in Speech/Now v.Federal Election Commission permitting a new generation of independent expenditure PACs.

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UPDATES: Click here to find out about updates based on changes in the law.

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The Connection: Chapters and Charts

Download individual chapters or the popular charts comparing tax-exempt organizations. 

Introduction: Types of Exempt Organizations and What They May Do
The Introduction describes the purpose of this guide and gives an overview of the different types of organizations and what kinds of activities each may conduct and highlights some that they may not conduct.

Chapter I: Lobbying and Political Activities by 501(c)(4)s
Chapter I discusses the rules governing lobbying and political activities conducted by 501(c)(4)s. It includes a section that describes the rules on 501(c)(4) participation in federal elections after Citizens United v. FEC.

Chapter II: Establishing and Operating Affiliated 501(c)(3) and 501(c)(4) Organizations
Chapter II discusses the steps for establishing a 501(c)(4) and the specific requirements to protect and preserve the public charity status of the 501(c)(3) once a related 501(c)(4) is established. It summarizes the types of advocacy activities that each organization may conduct and discusses the practical considerations and requirements for structuring and managing the relationships between 501(c)(3)s, 501(c)(4)s, and political organizations.

Chapter III: Rules Governing Activities of Political Organizations
Chapter III sets out the types of political organizations – Traditional Federal PACs, State PACs, Super PACs, and 527s– and the rules governing their activities, including disclaimers required for public communications.

Chapter IV: Establishing and Operating a Separate Segregated Fund
Chapter IV discusses how to organize a Separate Segregated Fund (SSF)—often referred to as a connected PAC–and the rules governing these entities.

Chapter V: Special Rules for Establishing and Operating a Super PAC that is a Nonconnected Committee
Chapter V discusses the special rules for establishing and operating an Independent Expenditure-Only PAC –commonly referred to as “Super PACs”—those PACs that can make independent expenditures but not contributions.

Chapter VI: Operating a Nonconnected Federal PAC that is Not a Super PAC
Chapter VI discusses the rules governing Nonconnected Federal PACs that are not Super PACs–those PACs established by an independent group of individuals, not by a corporation.

Conclusion and Appendices
The appendices include a description of the Lobbying Disclosure Act and its reporting requirements, a sample cost-sharing agreement between a 501(c)(3) and a 501(c)(4), and a model grant agreement between a 501(c)(3) and a 501(c)(4).

Chart A: Comparison of 501(c)(3)s, 501(c)(4)s, and Political 527 Organizations

Chart B: Types of Political Organizations – Federal PACs, 527s, and State PACs