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Welcome to Frequently Asked Questions about federal lobbying.
What is lobbying?
Answer:
The attempt to influence the passage, defeat, introduction or amendment of legislation, including bills introduced by a federal, state or local legislative body, bond issues, referenda, constitutional amendments, and Senate confirmation votes on Executive branch nominees.
For more information, see: Reg. 1.501(c)(3)-1(c)(3)(ii).
See https://www.irs.gov/charities-non-profits/lobbying
Why would a nonprofit organization choose to lobby?
Answer:
Most nonprofits exist to make the world better and fairer, for a particular constituency group or community, or for the planet as a whole. Legislative bodies often consider passing bills that will affect the group, community, or cause your nonprofit exists to support. Lobbying for or against a particular piece of legislation or vote provides nonprofits with an outlet to advance its mission.
See https://bolderadvocacy.org/2014/04/08/yes-nonprofits-you-can-lobby/
What is the difference between lobbying and advocacy?
Answer:
Advocacy includes a range of activities that seek to bring about systemic social change. Advocacy often seeks to address the root causes and symptoms of social and economic problems. Examples include community organizing and nonpartisan voter engagement. Advocacy can occur without being considered lobbying but lobbying cannot occur without advocacy. Advocacy does not encourage readers to take action with respect to any legislative materials.
See https://lobbyit.com/advocacy-vs-lobbying-understanding-difference/
Can a non-profit organization support a specific political candidate and retain their non-profit status?
Answer:
There is an absolute prohibition on engaging in partisan political activities. No 501(c)(3) may support or oppose any candidate for public office. This prohibits direct endorsements or contributions by the organization as well as even the use of 501(c)(3) resources to support or oppose a particular candidate or party. For more information, see the section electioneering.
See https://www.councilofnonprofits.org/tools-resources/political-campaign-activities-risks-tax-exempt-status
What is the 501(h) election?
Answer:
Please note that this is covered in more detail below in the Introduction to the 501H election section. In general, the 501(h) election allows 501(c)(3) non-profit organizations to have their limited lobbying measured by the “expenditure test.” Taking the 501(h) election streamlines the process and creates clear cut lines to determine how much lobbying nonprofits can pursue. This allows nonprofits to avoid the comparatively subjective “substantial part” test.
See https://www.councilofnonprofits.org/taking-the-501h-election
What are employees allowed to do before a non-profit organization takes the 501(h) election?
Answer:
Importantly, the substantial part test does not permit certain types of lobbying activities and forbids other types of lobbying activities. The question that matters is not what can members of nonprofits do, but how much. Nonprofit employees are free to influence legislation so long as the nonprofit’s activities, in the aggregate, amount to only an insubstantial amount of the organization’s activities. This means that employees can engage in both lobbying and grassroots lobbying. However, the IRS has not published a definition of “substantial” for the purposes of the substantial part test.
See https://www.councilofnonprofits.org/taking-the-501h-election
Are there penalties for lobbying when you haven’t taken the 501(h) election?
Answer:
If the IRS determines that a nonprofit that has not taken the 501(h) election is devoting a substantial amount of its activities to lobbying, the nonprofit will lose its tax-exempt status. Further, 501(c)(3) organizations that violate the substantial part test are subject to an excise tax equal to five percent of their lobbying expenditures for the year in which they cease to qualify for exemption. Beyond that, a tax equal to five percent of the lobbying expenditures for the year may be imposed against organization managers, jointly and severally, who agree to the making of such expenditures knowing that the expenditures would likely result in the loss of tax-exempt status.
See https://www.irs.gov/charities-non-profits/measuring-lobbying-substantial-part-test
What is the “substantial part” test?
Answer:
The “substantial part” test is used to determine whether a substantial part of a nonprofit’s activities constitute lobbying. The IRS has not provided a concrete definition of “substantial” or “insubstantial” for the purposes of the substantial part test. The IRS judges each case by its own merits, focusing on the facts and circumstances unique to that case. Consequently, organizations should consult case law to gain a more complete understanding of the substantial part test.
See https://www.irs.gov/charities-non-profits/measuring-lobbying-substantial-part-test
See https://bolderadvocacy.org/wp-content/uploads/2012/11/Lobbying_under_the_insubstantial_part_test.pdf
Are there any special lobbying rules?
Answer:
The regulations provide special rules for four specific kinds of communications; (1) membership communications; (2) referenda and initiatives; (3) paid mass media advertisements; (4) and subsequent use in lobbying.
Membership communications
are treated differently from communications with nonmembers in specific, limited circumstances.
An individual is considered to be a member of an organization if he or she contributes more than a nominal amount of
time or money to that organization. The lobbying regulations address membership communications in the following situations:
• Communications made to members (recipients must be more than 50% members) which refer to and reflect a view on specific
legislation but do not directly encourage members to engage in lobbying do not create lobbying expenditures
• Communications made primarily to members which refer to and reflect a view on specific legislation
and do not encourage members to engage in grass roots lobbying but do encourage members to engage in direct
lobbying create direct lobbying expenditures.
• Communications made primarily to members which refer to and reflect a view on specific
legislation and encourage members to engage in grass roots lobbying create grass roots lobbying expenditures.
See 26 CFR § 56.4911-5. https://www.law.cornell.edu/cfr/text/26/56.4911-5
Referenda and Initiatives. When a communication refers to a matter that it is the subject of a referendum or similar procedure, the general public where the election will occur becomes the relevant legislative body. As such, attempts to influence public opinion on referenda and ballot initiatives are considered direct lobbying.
See 26 CFR 56.4911-2(1)(iii) at https://www.law.cornell.edu/cfr/text/26/56.4911-2
A 501(c)(3) charity’s paid mass media advertisement about legislation, which does not otherwise constitute grass roots lobbying, is a grass roots lobbying communication when the advertisement:
• appears within two weeks of a vote on the legislation by either a legislative body or a committee, but not a sub-committee;
• reflects a view on the general subject of the legislation; and
• either: (1) refers to the highly publicized legislation, or
(2) encourages members of the general public to contact members of the legislature about the general subject of the legislation.
See 26 CFR Regs. 56.4911-2 at https://www.law.cornell.edu/cfr/text/26/56.4911-2
Are there any exceptions to the definition of lobbying?
Answer:
Even where each element required to be considered lobbying is present, there are some communications that are not considered lobbying.
• Nonpartisan Analysis. Research reports that provide a sufficiently full and fair exposition of the facts on both sides of the issue to allow a reader to make up his/her own mind, may express a view on legislation without being considered lobbying. Such nonpartisan reports must be distributed to the general public, a segment of the general public or to governmental bodies or employees, and not just to people interested in one side of an issue.
53.4945-2(d)(1)(ii) at https://www.law.cornell.edu/cfr/text/26/53.4945-2
• Examinations of Broad Social, Economic Issues. Communications that examine general topics that are also the subject of current legislation will not be considered direct or grassroots lobbying if they do not refer to specific legislation or directly encourage recipients to take action.
See Reg. 53.4945-2(d)(4) at https://www.law.cornell.edu/cfr/text/26/53.4945-2
• Requests for Technical Advice. A communication in response to a written request by a legislative body or committee, which is made available to all members of such body or committee will not be considered lobbying.
Regs. 53.4945-2(d)(1)-(4) at https://www.law.cornell.edu/cfr/text/26/53.4945-2
• Self-Defense Communications. If a legislative body is proposing to make a change that could affect a charity’s existence, exempt status, deductibility of contributions made to it, or its powers and duties, the charity may communicate with that legislative body and/or individual legislators or staff members regarding such changes and such communication will not be considered lobbying.