[AAACE-NLA] Lobbying Definition & Restrictions?

[Laurie Sheridan]

I've seen good, recent up-to-date info at "Independent Sector" about
restrictions to lobbying by non-profits.  You can see it at
http://www.independentsector.org/programs/gr/advocacy_fact_sheet.htm


It includes the following (but there is more detail on the web page and
its links, especially the guidance from the IRS).

Laurie

Advocacy Rules for Nonprofits

In general, nonprofit organizations described under Section 501(c)(3)
of the tax code may engage in lobbying and other advocacy activities
within certain limits. Specifically, the code provides that “no
substantial part” of the activities of such organizations can involve
“carrying on propaganda, or otherwise attempting, to influence
legislation,” and that such organizations cannot “participate in, or
intervene in (including the publishing or distributing of statements),
any political campaign on behalf (or in opposition to) any candidate for
public office.” Outlined below are key lobbying rules that apply to
public charities and private foundations.

In addition, in June 2007, the IRS released guidance (PDF) in Revenue
Ruling 2007-41 on facts and circumstances it considers when determining
whether a charitable organization has engaged in prohibited political
activities. 
More 

Lobbying Rules for Public Charities

Public charities may engage in a limited amount of legislative
lobbying, direct and/or grassroots, under either the vaguely defined
“no substantial part of its activities” test or, except for
churches, by electing to operate such activities under the Section
501(h) of the tax code.

The IRS measures compliance with the “no substantial part” test on
the basis of “all the pertinent facts and circumstances of each
case,” determined under a variety of factors such as the time
devoted (by both paid and volunteer workers) and the expenditures
devoted to the activity by the organization. Courts have interpreted
this test in a variety of ways, from a 5% safe harbor (1955) to a ruling
that percentages test are inappropriate (1972). 

Under 501(h) expenditure test public charities may spend:

on Direct Lobbying:
20% of the first $500,000 of its exempt purpose expenditures; 
15% of the next $500,000, and so on, up to one million dollars a year.


on Grassroots Lobbying:
5% of the first $500,000 of its exempt purpose expenditures;
3.75% of the next $500,000, and so on, up to $250,000 a year. 
Direct lobbying is defined as an attempt to influence legislation by
stating a position on specific legislation to legislators or other
government employees who participate in the formulation of legislation,
or urging your members to do so. 

Grassroots lobbying is defined as an attempt to influence legislation
by stating a position on specific legislation to the general public and
asking the general public to contact legislators or other government
employees who participate in the formulation of legislation. 

The term "lobbying" does not include the following activities: 

providing technical assistance or advice to legislative body or
committee in response to a written request; 
making available nonpartisan analysis, study or research; 
providing examinations and discussions of broad, social, economic and
similar problems; 
communicating with a legislative body regarding matters which might
affect the existence of the organization, its powers and duties, its
tax-exempt status, or the deduction of contributions to the organization
(the "self-defense" exception); and, 
updating the members of your own organization on the status of
legislation, without a call to action. 
Reporting Lobbying Expenditures
Public charities must report their federal, state and local lobbying
expenditures on their Form 990. In addition, the Lobbying Disclosure Act
(LDA), as amended in 2007, requires organizations that employ lobbyists
and spend in excess of $10,000 in federal lobbying-related expenses
during any three-month reporting period to register with Congress and to
file electronic disclosure reports on a quarterly basis. The reports
must include the name of the organization; a list of the specific issues
lobbied on during the filing period, including bill numbers and
references to specific executive branch actions; and a good faith
estimate of the total expenses the organization incurred in connection
with lobbying activities. Additional semiannual reports will be required
for certain political contributions beginning in January 2008.
Organizations that have made the 501(h) election may opt to use the Form
990 definitions of lobbying to estimate their lobbying expenditures for
the LDA report. 


Election-Related Activities for Public Charities

Under current law, 501(c)(3) organizations may engage in the
following:

Conduct voter registration and nonpartisan get-out-the-vote efforts. 
Educate the public on issues and encourage participation in the
political process. 
Educate all candidates and political parties on your issues. 
Conduct or participate in a nonpartisan candidate forum. 
Make presentations on your organization’s issue to platform
committees, campaign staff, candidates, media, and the general public. 
Work on behalf of a ballot measure. 
Continue normal lobbying on issues. 
Rent or sell mailing lists to candidates at fair market value, if made
available to all candidates. 
501(c)(3) organizations cannot engage in the following:

Endorse or oppose a candidate-implicit or explicit. 
Coordinate activities with a candidate. 
Contribute money, time, or facilities to a candidate. 
Set up, fund, or manage a PAC. 

Read more about permissible election-related activities of 501(c)(3)
organizations and guidance from the IRS on political activity.


Lobbying Rules for Foundations

In general, foundations may not express views on specific legislation
in communications with legislators, or with the general public if the
communication includes a “call to action.” 

However, private foundations (as well as public charities) may:

provide technical assistance or advice to legislative body or committee
in response to a written request; 
make available nonpartisan analysis, study or research; and, 
under the so-called “self-defense” exception, communicate with a
legislative body regarding matters which might affect the existence of
the foundation, its powers and duties, its tax-exempt status, or the
deduction of contributions to the foundation. 
Restrictions on Grants 
In general, private foundations may not earmark a grant to a nonprofit
for lobbying. 

However, lobbying is permitted under foundation grants in two
circumstances: 

1) Under general support grants, nonprofits may pay for lobbying
expenses; and,
2) Under grants for specific projects with a lobbying component,
nonprofits may pay for lobbying expenses under the project but not with
the foundation’s grant funds. 

Election-Related Activities for Private Foundations

Private foundations may support nonpartisan election-related activities
such as candidate forums, voter education projects, nonpartisan get-out
the vote drives, and public surveys on issues. 

However, with respect to voter registration drives, foundations are
subject to specific restrictions which in effect inhibit such
activities. Specifically, such drives must be carried out in at least
five states, and the foundation may not exert any control over the
project. 



Laurie Sheridan, Workforce Development Coordinator
World Education/SABES Central Resource Center
44 Farnsworth St.
Boston, MA 02210
(617) 482-9485 
lsheridan at worlded.org
 
SABES:  Training Leaders in Adult Basic Education 


>>> "David Collings" <david at collings.com> 11/28/2007 4:22 PM >>>
As adult learners and adult educators respond to the VALUE online
petition and
contact politicians in other ways, nervous bosses warn of the dangers
of
lobbying.  I'm sure that someone on this discussion list can provide a
concise
legal reference for what an employee of various agencies
(federally-funded,
state/local government, etc.) can and can't say to politicians.  If you
have
such knowledge, please share with all of us.

Thanks!

David Collings
Literacy Advocate

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