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Lobbying for 501(c)(3) Organizations

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Lobbying for 501(c)(3) Organizations

Many state association leaders have questions around the topic of legislative advocacy and what the organization, as a nonprofit 501(c)(3), is permitted, or not permitted to do.

Typically, lobbying includes efforts to shape specific pieces of legislative by influencing the opinion of legislators, legislative staff, and government administrators directly involved in drafting legislative proposals.  The Internal Revenue Code sets limits on lobbying expenditures by organizations that are exempt from tax under Section 501(c)(3).

Non-profit organizations may lobby elected officials.  Any limitations are related to the amount of money spent to lobby.  There are two sets of rules governing expenditures, and, with the exception of churches, non-profits may choose which rule to follow.  The first rule, known as the "substantial part" test, states that "no substantial part" of the organization's activities can be lobbying.  The second rule, which an organization must elect to use (and is known as an "h" classification), provides for sliding scales that can be spent on lobbying (up to $1 million on total lobbying, and up to $250,000 on grassroots lobbying).

Private foundations generally may not lobby except in limited circumstances, such as on issues affecting their tax status or the tax deductibility of gifts to them.  Conducting nonpartisan analysis and research and then disseminating the results to the public generally is not considered lobbying under these restrictions.

What is Lobbying?

In general, lobbying is any activity that attempts to influence legislation or advocates the adoption or rejection of legislation.  Lobbying may be done in-person, through email, through newsletters, or through websites.

Direct lobbying is contacting members of a legislative body for the purpose of proposing, supporting, or opposing specific legislation.

Grassroots lobbying is urging the general public (a call to action) to contact members of a legislative body for the purpose of proposing, supporting, or opposing legislation.  Urging members to contact legislators is direct lobbying, urging members to urge others to lobby is grassroots lobbying.

What is not Lobbying?

  • Communication to members discussing legislation, but not urging action by membership (e.g., a "legislative update" informing members of all education legislation introduced last week)
  • Making available the results of an independent and objective nonpartisan analysis, study, or research on a legislative issue
  • Responding to written requests from a legislative body, committee, or subcommittee for technical advice on pending legislation
  • Discussion of policy issues, where the resolution would require legislation, as long as the discussion does not address the merits of specific legislative measures.

A Communication is Lobbying if it does both of the following:

  • Refers to specific legislation, or legislation that has not been introduced but is more than a general concept and
  • Reflects a view on the merits of the legislation

Grassroots Lobbying Occurs if the Material or Message does one of the following:

  • Directly tells its audience to contact their legislators,
  • Provides a legislator's address, phone number, or similar information,
  • Provides a prepared message to be sent to legislators, or
  • Identifies specific legislators' positions on legislation, or as a member of the committee that will consider legislation

Political Activity Limitations

Non-profit organizations are prohibited from participating or intervening in any political campaign on behalf of or in opposition to any candidate for public office.  Prohibited activities include contributions to a candidate's campaign, endorsement (or implied endorsement) of a candidate, or participating (e.g., phone banks) in campaign activity.

Final Note

Your state may have additional restrictions or reporting requirements for lobbying expenditures.  Be sure to check with the state agency that regulates non-profit organizations (typically the Secretary of State) to ensure that you are gathering and recording the information required in your state.


For more information:

The IRS website describes the "substantial" test and the alternate test for non-profits that "elect" an "(h)" classification for lobbying, which subjects them to specific spending limits for lobbying expenditures.

IRS publication #557.  Lobbying expenditures information begins on page 43.


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