Facebook's "Political" Advertisements and Nonprofits

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Amid revelations of Russian-backed Facebook ad campaigns and troublesome data leaks, Facebook has recently implemented new mandatory disclaimer labels and related requirements for advertisements deemed to be “political.” Given applicable political restrictions for Section 501(c)(3) organizations, does Facebook’s new political ad policy mean that public charities may no longer advertise on Facebook?  Or could Facebook’s new ad policy lead to legal trouble for Section 501(c)(3) organizations, if the IRS should question their self-declared “political” involvement? The answer to both questions should be “No,” but the taint of identifying activities as “political” may well create some legitimate consternation among nonprofits.

Facebook’s New “Political” Requirements

Facebook allows individuals and organizations to pay for the ability to distribute advertisements that target specific audiences by particular characteristics, such as gender, race, or age. The key element of Facebook’s new advertising policy is that all ads deemed by Facebook to be “political” or “issue-related” must now include information about who paid for the ads, with a clickable link to further information about the advertiser. Facebook’s categorization of what counts as “political” is extremely broad, listing 20 national issues of public importance, like the “economy,” “abortion,” the “environment,” “energy,” “education,” “poverty,” “health,” and “values,” with no other qualifiers. Such a kitchen-sink approach goes far beyond quintessential and well-established political categories like political campaign involvement and lobbying for legislative changes.  

Additionally, advertisers planning on running ads that include such “political” content will need to go through an authorization process, which includes proof of identity. The stated aim is to discourage foreign agents interfering with elections. Once Facebook has confirmed the poster’s identity, advertisements will have a small disclaimer along with a label indicating the content refers to a political candidate or issue. Note that this disclaimer is editable, though the ad will be reviewed again if this happens. From the user's perspective, not only will users see the new disclaimers and labels, users will also be able to report an ad that doesn't have a label and needs one. Once an ad is reported, Facebook will review the ad and determine if it has “political” issues or content. If it does, it will be taken down until compliant.

Added to all of this is a newly released archive of political advertisements, accessible by anyone with a Facebook account. This searchable archive will contain all Facebook and Instagram advertisements labeled as "political," including advertisements launched before these labeling policies went into effect. Curious searchers can find user information, including the age, location, and gender of the audience that viewed the ads. These ads will be housed for seven years from the day they go live.

According to Facebook, releasing the archive and new ad disclaimer policy is part of Facebook's belief in ad transparency. In their brief Q&A about the new requirements, Stephen Satterfield, Director of Facebook's policy team, said, "Simply put, we think ads should be transparent...You should be able to understand who’s showing you ads and you should see what other ads that advertiser is running."

What’s “Political”?

We live in a highly politicized era, where most people make a default assumption that solutions to social, economic, medical, or humanitarian issues must necessarily be political, or even partisan, and which must be effectuated and enforced by the government. Against this backdrop, Section 501(c)(3) organizations are legally restricted to only “insubstantial” lobbying for legislative change. (See related blog article here.) In addition, they are also absolutely prohibited from engaging in political campaign activity, defined as seeking to influence an election or defeat of a candidate for public office.

On the other hand, and pursuant to applicable IRS regulations, Section 501(c)(3) organizations enjoy First Amendment free speech rights to freely engage in educational issue advocacy – that is, dissemination of information intended to educate people about a wide variety of public policy issues, in order to promote their tax-exempt purposes. Such permissible issue advocacy may include abortion (e.g., “Abortion kills a beating heart”), health (e.g., a skull and crossbones graphic over and image of cigarettes), energy (e.g., “Drive electric!”), and the environment (e.g., “Fracking is bad.”), all without transgressing permissible political restrictions for such tax-exempt organizations – and even though such issues may admittedly be politically tinged.

Such distinctions between political campaign activity, lobbying, and educational issue advocacy thus may become of critical importance for Section 501(c)(3) organizations, as they seek to discern what communications they may or may not make. Enter Facebook, which muddies the waters significantly. According to Facebook’s FAQs, ads that include “political content” include ads about political campaign candidates, proposed legislation, as well as “get out the vote” initiatives (which may be entirely appropriate for a Section 501(c)(3) organization) and information about “any national legislative issue of public importance.” But when Facebook further addresses such legislative issue of public importance with its expansive list of twenty broad categories, it drops the word “legislative” and instead broadly identifies “national issues of public importance.” Somewhat ominously, Facebook further warns that this “initial list of top-level issues that will be considered to require advertiser authorization and labelling” is expected to “evolve over time.”

What Should a Responsible Section 501(c)(3) Organization Do?

Section 501(c)(3) organizations include churches, other houses of worship, schools, social service providers, advocacy groups, and many other nonprofits seeking to improve the world in meaningful ways outside the sphere and scope of politics, even if some issues of mutual concern may also be addressed in some way by the political process. Given the IRS’s far more restrictive use of the term “political” for purposes of tax-exempt organizations, Facebook’s “political” policy thus could be quite misleading - for the general public as well as for government regulation.   In addition, this new requirement will enable heretofore unseen access to personal data by the government and the general public, which in turn could lead to all sorts of targeting, censorship, and government scrutiny issues.

What should responsible nonprofit leaders do, in seeking to comply with both applicable legal restrictions and Facebook’s new advertising requirements? First, they may decide that it is best overall to refrain from any Facebook ads. No Facebook ads; no potential for mischaracterized “political” engagement or related data breach issues.  Second, a nonprofit could refuse to label content as “political” until forced to do so.  In that case, ads may be taken down by Facebook, but they may be posted again upon compliance. Third, a nonprofit could include the required disclaimers but join the chorus of collective objections to the political labels, and see if Facebook will back down on this inappropriate “political” mislabeling. Fourth, those seeking to pursue a more aggressive counter-attack may wish to strategize about how to attack Facebook’s new political requirement. For example, it may be helpful for a nonprofit to be “rejected” for advertisements and then claim injury, rather than to go along with the tide and concede the labeling requirement.

No doubt - Facebook’s “political” labelling requirement is extremely misleading.  Such misbranding, resulting misperception, and potentially greater scrutiny through accessible data searches should not put a nonprofit’s tax-exempt qualification at risk. But such potential results surely will give some nonprofits significant pause when deciding whether to share their advocacy messages through Facebook ads, not least because of the high degree of uncertainty paired with the IRS’s high amount of disproportionate control, discretion, and power in this context. Correspondingly, Facebook’s new advertising requirements likely may chill Section 501(c)(3) organizations’ free speech rights, if the IRS relies on such characterizations to any degree in conducting their own analysis, causing these 501(c)(3) organizations to refrain from otherwise very beneficial tax-exempt activity. Such consequences should be deeply disturbing for our American society, with Facebook’s dark shadow over Section 501(c)(3) advocacy rights that should not be impaired.