Does the IRS Want to Restrict Nonprofits Use of Social Media?

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Social media provides the perfect platform for nonprofits to engage with the public and raise awareness for their cause. There are many successful case studies of nonprofits utilizing social media to help raise public awareness, and in doing so successfully fundraising without the large advertising budget that might be necessary in traditional marketing. I am one of the founding members of a social media group here in Orange County, California, #ConnectOC, that hosts events for the dual purpose of connecting professionals and raising awareness (combined with fundraising) for nonprofits.

Is there anything in this picture that the IRS might object to?

Today’s post is inspired by another person I met Windmill Networking, Shirley Ayres. Shirley does consulting for social workers and social care in the United Kingdom, and we immediately started a conversation about the need to convince public organizations about the potential good for social media. Shirley contacted me again yesterday with a surprising issue that she felt, and I agree, we need to raise public awareness on: the potential that the IRS will not allow nonprofits to freely participate in social media.

Let me explain further. Shirley started a discussion on a LinkedIn Group asking those in the group to respond to a poll about whether or not nonprofits have a social media usage policy. To her surprise, there was a gentleman from the U.S. who posted the following comment:

My organization recently went through an IRS audit and was heavily scrutinized for having web linkages to various social media outlets (facebook, twitter, youtube, etc), despite them being dedicated to the non-profits purpose. The IRS agent’s position was that these social media tools distract from the non-profit purpose and create two issues…first is that these media outlets may fall within the scope of advocacy, and second is possible inurement from whomever is responsible for keeping the media outlets up to date with information. We got through the audit ok, but with the condition that we no longer use social media as a primary source for communication and dissemination of our work.

You can imagine how shocked both Shirley, and subsequently myself, were after reading this. As this comment was in a LinkedIn Group with a real professional profile attached to it, it begs to say that this story is probably not a lie.

Apparently the above organization got through the audit OK, but the condition was that they could no longer use social media as their primary source for communication. If the ideal place for nonprofits to freely and deeply engage with the public cannot be used as their primary source for communication, what could take its place?

I have never worked at a nonprofit so I do not understand the potential intricacies regarding nonprofit status and the tax code, but my knee-jerk reaction is that there is something terribly wrong here.

What do you think about this? Does your nonprofit organization have similar experiences with the IRS? Any authorities on taxes and nonprofits want to weigh in on the issue? Please help contribute to our understanding of this issue! Thanks!

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