Nonprofit Lobbying and Advocacy 101, Alliance for Justice

Nonprofit Lobbying and Advocacy 101: You Can Do It! Nona Randois California Director Alliance for Justice August 24, 2017

For free coaching about laws impacting nonprofit advocacy:

advocacy@afj.org 866.675.6229

For free tools, fact sheets, and publications

www.bolderadvocacy.org

@AFJBeBold @NonaAFJ BolderAdvocacy

If there were no budget limits‌ No rules or laws holding you back‌

What would you do to strengthen your community?

And how would you do it?

Brainstorm

1. Understand 501(c)(3) lobbying limits 2. Learn a simple step a 501(c)(3) can take to maximize the amount of lobbying it can do 3. Recognize when an activity might constitute lobbying under IRS rules

4. Understand how to track lobbying

Objectives

What is ADVOCACY?

Nonprofits can and should advocate for policy change!

TAX-EXEMPT STATUS of NONPROFITS

501(c)(3) Public Charity

501(c)(4) 501(c)(5) 501(c)(6)

Examples

Tax Treatment

Lobbying Activities

Electoral Activities

Tax-Exempt Contributions Tax-Deductible

Tax-Exempt

Limited

Unlimited

Cannot support or oppose a candidate for office

Secondary activity Must follow election laws

Organize Communities

Educate Legislators

Educate Public

Nonpartisan Voter Ed.

PARTISAN POLITICAL

IRS Lobbying Exceptions

Educational Conferences

LOBBYING

Encourage Voting

Change Corporate Behavior

Influence Regulations

Litigation Research

Leadership Training

Avenues for ADVOCACY

Unofficial Working Definition of LOBBYING

Trying to influence legislation

Public Charities can and should • Must stay within IRS limits ▪ Insubstantial part test OR ▪ 501(h) expenditure test

• Must have unrestricted funds • Must track and report

LOBBY

How much LOBBYING?

Insubstantial Part Test (Required for Houses of Worship) 1.

Default test for all 501(c)(3)s

2.

Lobbying is “insubstantial part” of organization’s activities, but what is “insubstantial”?

3.

No clear definition of lobbying or lobbying exceptions

4.

Based on paid and unpaid activities

OR 501(h) Expenditure Test 1.

One-time election – IRS Form 5768

2.

Clear definition of lobbying

3.

Dollar-based formula to calculate lobbying limits

4.

Only spending counts, not volunteer time

LOBBYING LIMITS under 501(h)

“Exempt Purpose Annual Expenditures 1. Calculate organization’s (for most organizations) Expenditures ” 2. Overall lobbying limit ANNUAL EXPENDITURES

OVERALL LOBBYING LIMIT

$500,000 or less

20%

$500,000 to $1 million

$100,000 +15% of excess over $500,000

Use our online calculator at www.bolderadvocacy.org $1 million to $1.5 million

$175,000 +10% of excess over $1 million

$1.5 million to $17 million

$225,000 + 5% of excess over $1.5 million

Over $17 million

$1,000,000

3. Grassroots lobbying limit is 25% of overall limit

TOTAL LOBBYING LIMITS for 501(c)(3)s making the 501(h) election with annual expenditures of $1,000,000 Direct

Direct lobbying + Grassroots lobbying= Overall lobbying limit

Grassroots

Community services, training, public education, non-lobbying advocacy

Overall Lobbying Limit $175,000

Grassroots Lobbying Limit

$43,750

LOBBYING Definitions

Contacting legislators to propose, support, or oppose legislation or budget Urging the public to contact legislators to propose, support, or oppose legislation or budget Advocating the adoption or rejection of legislation

What is LOBBYING under the Insubstantial Part Test?

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

LOBBYING

for organizations using 501(h)

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

DIRECT

U.S. Legislators

Communication Legislator Expresses a view about specific legislation

State Legislators

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

County Board of Supervisors, City Council

And‌

DIRECT

And their staff…

Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

And…

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication

Ballot Measures ▪

Constitutional amendments

▪

Bond measures

General public Expresses a view about specific legislation Call to action

The general public are “lawmakers” when voting on ballot measures, so ballot measure advocacy counts as direct lobbying.

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

President, governor, mayor or other government official who participates in the formulation of legislation

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

When is Honolulu Mayor Kirk Caldwell a “legislator”?

DIRECT

NOT “LEGISLATORS”

Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

▪ ▪ ▪ ▪ ▪ ▪

School boards Planning commissions Zoning commissions Housing authorities Water districts Other “special purpose bodies”

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

Preparation for lobbying counts as lobbying

NOT LEGISLATION Regulations

Executive Orders

Enforcement of Existing Laws

Litigation

IRS Lobbying or not?

▪ Asking the City Council to implement rent control: LOBBYING, under IRS rules ▪ Meeting with the local school board to ask them adopt healthier school lunches: NOT LOBBYING under IRS rules ▪ Urging your city’s police chief to 1) sign a letter to the County Board of Supervisors supporting increased funding for your after school program and 2) stop reporting undocumented immigrants to ICE: Partially LOBBYING and Partially NOT LOBBYING under IRS rules

▪ Educating legislators about public opinion on climate change and the need for government to act (with no pending or proposed legislation): NOT LOBBYING under IRS Rules

Grassroots Lobbying

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

Call to Action

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

TELLING TO CONTACT legislator(s) or PROVIDING CONTACT INFO, like phone number, e-mail address, mailing address, and/or other contact info of legislator(s) or PROVIDING MECHANISM to enable communication with legislator(s) or IDENTIFYING legislator(s)

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

ACTION ALERT: SUPPORT GOODWIN LIU’S NOMINATION We expect the Senate to vote on whether Goodwin Liu's nomination to the 9th Circuit will move forward by 2 PM EST TOMORROW. Senators who are undecided on Liu’s nomination include: Scott Brown Tom Coburn Tim Coburn Susan Collins Mary Landrieu Olympia Snowe

Bill Nelson Lisa Murkowski Claire McCaskill Joe Manchi Manchin

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Communication

Under 501(h), If a communication does NOT have one of the four kinds of Calls to Action, it’s

General public Expresses a view about specific legislation Call to action

Not Lobbying

TOTAL LOBBYING LIMITS for 501(c)(3)s making the 501(h) election with annual expenditures of $1,000,000 Direct

Direct lobbying + Grassroots lobbying= Overall lobbying limit

Grassroots

Community services, training, public education, non-lobbying advocacy

Overall Lobbying Limit $175,000

Grassroots Lobbying Limit

$43,750

DIRECT Communication With a legislator Expressing a view about specific legislation

GRASSROOTS

Communication General public Expresses a view about specific legislation Call to action

Lobbying

DIRECT Communication Legislator Expresses a view about specific legislation

GRASSROOTS

Take Action!

Communication General public Expresses a view about specific legislation Call to action

Not Lobbying

Nonpartisan analysis, study, or research Request for technical assistance Self defense

Examinations and discussions of broad social, economic, and similar problems

Lobbying EXCEPTIONS

MUST Full and Fair Discussion Broadly Disseminated

MAY

Express a View Indirect Call to Action Subsequent Grassroots Lobbying limited

Nonpartisan ANALYSIS

MUST Invitation in Writing on Behalf of a Committee Available to All Members of Committee

MAY Express a View on Specific Legislation

Technical ASSISTANCE

Annual lobbying caps for 501(c)(3)s

Disclose statelevel lobbying

Disclose local lobbying

Disclose federal lobbying

Lobbying LIMITS vs. DISCLOSURE

IRS Lobbying KEY POINTS: ▪

Public charities can and should lobby; they just have to stay within their annual lobbying limits.

▪

Most public charities will benefit from using the “501(h) expenditure test” to determine their lobbying limits.

▪

Many activities that influence policy will not even meet the definition of “lobbying.”

▪

Contact Alliance for Justice for help!

For more information:

QUESTIONS?

For free coaching about laws impacting nonprofit advocacy:

advocacy@afj.org 866.675.6229

For free tools, fact sheets, and publications

www.bolderadvocacy.org

@AFJBeBold @NonaAFJ BolderAdvocacy