Johnson Amendment Under Review: What a Texas Case Could Mean for 501(c)(3) Nonprofits

Johnson Amendment Under Review: What a Texas Case Could Mean for 501(c)(3) Nonprofits

For 70 years, the Johnson Amendment has quietly shaped the boundaries of nonprofit activity, promising tax-exempt status in exchange for staying out of electoral politics. Now, in a twist that few could have imagined when it was passed in 1954, the law's enforcement — especially for houses of worship — is under judicial review. The outcome could reverberate far beyond the faith community, touching every corner of the nonprofit sector.

The nonprofit sector in the United States rests on a delicate balance: public trust, tax-exempt status, and a shared understanding that our organizations serve missions, not political parties. The Johnson Amendment — still in effect today — is a cornerstone of that balance. That's why a recent IRS settlement in Texas, which could alter how the law applies to houses of worship, deserves the attention of everyone who cares about the sector's health, regardless of where they stand politically.

A Law That's Still on the Books

Adopted in 1954, the Johnson Amendment is part of Section 501(c)(3) of the Internal Revenue Code. It prohibits all tax-exempt charitable organizations — including churches, hospitals, and universities — from endorsing or opposing candidates for public office. In exchange for the privilege of tax exemption and the ability to receive tax-deductible donations, nonprofits agree to remain outside the electoral fray.

Contrary to common perception, this has never barred nonprofits from engaging with civic life. Voter registration drives, nonpartisan issue forums, and advocacy on legislation are all permitted. What's restricted is using the organization's resources or platform to promote or oppose a candidate.

What Changed — and Why Now

In July 2025, the IRS proposed a consent judgment in a lawsuit brought by two Texas churches and the National Religious Broadcasters Association — part of a long-running effort by some conservative religious groups to challenge the Johnson Amendment. If approved by a federal judge, the settlement would prevent the IRS from enforcing the Johnson Amendment against those churches for statements made during religious services to their congregations on "matters of faith" — even when those statements include candidate endorsements.

Legally, this settlement applies only to the plaintiffs. Practically, it sends a signal that could influence enforcement far beyond them.

Enforcement Was Already Rare — and That's the Point

As NPR reported in 2017, the IRS has rarely enforced the Johnson Amendment against churches. Even organized mass challenges, such as "Pulpit Freedom Sunday," saw thousands of pastors endorse candidates from the pulpit without losing tax-exempt status. Since 2008, only one church in these coordinated efforts was audited, and none lost its exemption.

This history of uneven enforcement is central to the current legal challenge. Opponents of the Johnson Amendment argue that if the IRS is unwilling to apply the law consistently, it unfairly chills free speech while leaving nonprofits uncertain about the boundaries.

Why the Sector Should Pay Attention

While this settlement is narrowly focused, its potential ripple effects are what truly matter for the entire nonprofit community:

1. Equity and Consistency: If houses of worship have greater political latitude than secular 501(c)(3)s, will this create pressure — and legal challenges — to extend the same exemption to all nonprofits?
2. Defining the Boundaries: What counts as a "congregation" or "customary channel" communication in the digital age? Does a livestream sermon to thousands online qualify? How will the IRS draw the line?
3. Public Trust: The nonprofit sector enjoys credibility partly because it is viewed as mission-driven rather than partisan. If the perception shifts — even for a portion of the sector — trust can erode for all.

A Moment for Sector-Wide Reflection — and Action

This is not a call to decide whether the Johnson Amendment itself is right or wrong. It is a call to recognize that when the rules for one category of nonprofits change, the ripple effects are felt everywhere. Advocacy groups, foundations, universities, and service providers all share an interest in maintaining the integrity and independence that underpin the sector's role in civic life.

The Texas case remains before the court, and opposing groups have asked to intervene. The legal outcome is uncertain. What is certain is that nonprofit leaders — religious and secular alike — should watch closely, consult legal counsel on political activity policies, and stay informed as the case progresses. Even without changes in the law, changes in enforcement patterns can redefine our sector's relationship to politics in ways that are hard to reverse.

The nonprofit sector's strength is trust — built over decades and shared across diverse missions. Preserving that trust requires fair rules, applied consistently, and anchored in the public benefit that earned these organizations their tax-exempt status in the first place.