These days lobbying can seem like a dirty word, something that shady special interest groups with bottomless pockets do – and certainly something that non-profit organizations should not get involved in. But that is simply not true. Lobbying involves trying to persuade a legislative body (from your local City Council on up to the U.S. Senate) to take a specific course of action. When you consider that non-profits are basically organizations with special interests (whether that be education, homelessness, the arts, neighborhood revitalization, or what have you) lobbying for certain public policy may take on an important role.
Important does not mean unrestrained, and non-profit organizations must abide by specific rules in order to maintain their tax-exempt status. 501(c)3s are the most common non-profits, and their restrictions are addressed first. Guidelines for other 501c nonprofits are discussed afterward.
Under the provisions of the Internal Revenue Code (IRC) 501h, most 501c3 nonprofit organizations (with the exception of churches and church-affiliated organizations):
- Can appeal directly to state legislatures regarding public policy they’d like to see happen or legislation they’d like to see defeated or repealed. The organization can write letters, make phone calls, or meet face-to-face with the legislator.
- Can lobby for issues-based initiatives. For instance, half of the states in the U.S. allow citizens to take ballot initiatives directly to the voters, and 501c3 nonprofits can campaign in those instances.
- Cannot support specific candidates or parties in races for elected office, known in IRS-speak as “political campaign activity”. More specifically, the organization cannot endorse a candidate or contribute to a campaign with money or time. (Employees can, of course, donate or volunteer on their own time).
- Can sponsor an educational event such as candidate’s forum, so long as all candidates running for the same office have a chance to participate.
- Must notify the IRS of the intent to lobby by filing Form 5768.
- Must abide by any additional state laws regarding lobbying.
- May have an affiliated 501c4 organization to carry out unrestricted lobbying.
501(c)3 non-profits must keep the amount of time or money spent on lobbying activities below a certain amount. Limits exist for both direct lobbying and grassroots lobbying (influencing the public on an issue), though the thresholds are different. The details regarding time, money, and activities are complicated, and 501c3s are urged to err on the side of caution.
Most other 501c non-profits are allowed unlimited lobbying without jeopardizing their tax-exempt status, so long as they:
- Restrict lobbying to issues related to the organization’s purpose
- Do not use government grants to lobby
