This Wednesday, October 28th, Foundation Center-Atlanta and Pro Bono Partnership of Atlanta will host a panel of nonprofit leaders to share their experiences about their lobbying efforts and compliance with the law including tips on what it really takes to get started lobbying, how to make sure you stay out of trouble with the IRS, and how to craft a compelling message that inspires your supporters to take action. Register for this free program here.
Since the IRS prohibits 501(c)(3) nonprofits from engaging in political activities and places some limits on lobbying, it's important to first understand how the IRS defines lobbying and advocacy and what the rules are for nonprofits that engage in these activities. For that, we'll turn to our event co-hosts at Pro Bono Partnership of Atlanta.
[Editor's note: The following post is an abridged version of an article originally published at the Pro Bono Partnership of Atlanta web site. View the full article here.]
Advocacy is a broad term covering a range of activities that seek to influence policies or bring about systemic social change. Advocacy often “seeks to address the root causes, as well as the symptoms, of social and economic problems” (Source: Center for Lobbying in the Public Interest). Advocacy can include voter registration drives, filing amicus briefs and public education about social issues. While the two activities are similar, the Internal Revenue Service (“IRS”) distinguishes between advocacy and lobbying. Lobbying is any activity that seeks to impact policies by influencing specific legislation. The IRS restricts lobbying by tax-exempt organizations but permits them to engage in advocacy efforts without limitation. Some examples of common types of advocacy that are not restricted by the IRS are:
- Educating the public (without encouraging them to contact their legislators) on current issues by:
- Publicizing results of nonpartisan analysis and studies,
- Discussing broad social issues (without mentioning or referring to specific legislation), and
- Providing a point of view on an issue (without mentioning or referring to specific legislation);
- Encouraging the public to vote (voter registration drives or voter education in a nonpartisan way);
- Communicating with the judiciary about a pending case, such as in amicus briefs; and
- Communicating with a government official or employee other than for the purpose of influencing legislation.
What is Lobbying? The IRS defines lobbying as “an attempt to influence specific legislation.” Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure. It does not include actions by executive, judicial, or administrative bodies. Lobbying activities include contacting, or urging the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or advocating the adoption or rejection of legislation.
There are two different types of lobbying: direct and grassroots. The IRS treats each one quite differently.
Any attempt to influence legislation by communicating with a legislator, an employee of a legislative body or other government officials is considered direct lobbying. The communication must:
- Refer to specific legislation AND
- Reflect a view on such legislation.
The communication can be made directly by the tax-exempt organization or through its members. A member is an individual that contributes more than a nominal amount of time or money to the tax-exempt organization. To be considered direct lobbying, the tax-exempt organization must have encouraged its members to lobby for the specific legislation. A general statement about specific legislation and the organization’s position on it is not enough to constitute lobbying, even if the organization’s members contact legislators directly.
Any attempt to influence legislation by attempting to affect the opinion of the general public through a specific communication is considered grassroots lobbying. To constitute a grassroots lobbying communication, the communication must:
- Refer to specific legislation AND
- Reflect a view on such legislation AND
- Encourage the recipient to take action by:
- Directly urging the recipient to contact legislators or government officials in order to influence legislation;
- Including the name, address, phone number, or similar information about a legislator or government official in the communication;
- Providing a petition, postcard, or other prepared message for the recipient to send to the legislator in order to influence legislation;
- Identifying any legislators who will vote on the legislation and are either voting on the opposing side of the organization’s viewpoint or are undecided; OR
- Identifying any legislators who are the representative of the recipient or are on the committee that will consider the specific legislation addressed by the communication. This is also known as “indirect encouragement.” (Note that identifying the main sponsor for the bill will not be considered encouragement to take action.)
While an exempt organization can engage in both lobbying and advocacy to some degree, it's important to understand the distinction. For those organizations, that do engage in lobbying, it's crucial to follow certain steps to comply with IRS regulations, including filing the 501(h) election. For more on this, see the rest of this article here at the Pro Bono Partnership of Atlanta web site.