[gdani]

They would be prohibited from not just ENDORSING a candidate or party or piece of legislation, they would also be prohibited from engaging in ANY advocacy for/against a candidate, party, or piece of pending legislation.

Untrue. A 501(c)(3) can advocate against a party & can certainly advocate for or against legislation, although there are limits.

[a fool in paradise]

http://www.irs.gov/charities/charitable/article/0,,id=96099,00.html

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

[a fool in paradise]

IRS pdf on election year issues

http://www.irs.gov/pub/irs-tege/eotopici02.pdf