The rich guys running the non-profit Sioux Empire Betterment Foundation and its Sioux Falls July 4th parade committee appear to be reading the restriction on 501(c())3 political activity exactly backwards.
SBEF’s parade committee is providing a forum for political candidates and parties in their July 4th celebration, but they are banning “non-party groups that were set up specifically to advocate for policy positions” like Indivisible 605 and South Dakota backers of a Constitutional Convention of States.
SBEF places further restrictions on the political activities of recipients of its grants:
No portion of the grant can be used to fund lobbying, participate in any political campaign, attempt to influence legislation or the outcome of any public election, or to carry on, directly or indirectly, any voter registration drive [Sioux Empire Betterment Foundation, grant application form, retrieved 2026.06.22].
SBEF received tax-exempt 501(c)(3) non-profit status in August 2024. The one form of political activity in which the law forbids 501(c)(3) organizations from engaging is support for political candidates:
Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of or in opposition to any candidate for public office clearly violate the prohibition against political campaign activity. Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes [Internal Revenue Service, “Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations,” last reviewed/updated 2026.05.31, retrieved 2026.06.22].
501(c)(3) non-profits can support and campaign for ballot questions. They can support and conduct voter registration and get-out-the-vote drives. They can take positions on public policy issues. They can even engage in some lobbying. And they can spend their money, either directly or indirectly through grants to other groups, to support those political activities without endangering their tax-exempt status.
But the Sioux Empire Betterment Foundation acts as if tax law says the opposite: Candidates for public office, come promote yourselves on our dime! But public policy? Voter registration? Protest against autocracy? Calls for Constitutional change? Back, devils, back!
The foundation probably isn’t even in trouble letting candidates and parties march under their sponsorship, as long as they are remaining neutral and giving all candidates equal access to the parade route.
But SBEF is not obliged by its tax-exempt status to exclude policy-focused advocacy groups. SBEF directors Terry Veldhaus, David Roetman, John Small, and Aaron Levisay are simply banning political speech that they personally find bothersome.