Yes You Can: Ground Rules for Nonprofit Lobbying and Advocacy

If you are a 501(c)3, there are two key measurements used to gauge whether your organization is lobbying within bounds:

Option 1 - The "Insubstantial Part" Test

It is important to note that this category is the default for all 501(c)3s. Basically, the Internal Revenue Code states that "no substantial part of a charity's activities" can be carried out to influence legislation. So how exactly does the IRS determine whether the lobbying being done is in fact "substantial"? Well, that's where things get a bit hairy.

 There are no firm numbers for the test, rather the IRS looks at a series of facts and circumstances regarding your organization's direct expenditures, volunteer time, staff time, publicity and continuous/intermittent nature of activities to determine if your primary focus is on lobbying. The law is vague at best so as a rule of thumb you should tread carefully.

Option 2 - 501(h) Election

For organizations that prefer the added protection of having clearer definitions and more generous limits applied to their lobbying, they can elect to take this additional step. A 501(h) election means your nonprofit meets all the elements of either direct or grassroots lobbying. Direct lobbying is focused on a specific target that can affect legislation and specifically reflects your viewpoint. Grassroots lobbying is communication to the general public about a specific piece of legislation, reflecting your view and offering a call to action.

The 501(h) option provides clear lobbying expenditure limits based on the size of your organization:

* More information can be found at IRS.gov

If you choose a 501(h) election, you must fill out the appropriate form (Form 5768). Your status will automatically be retained until you fill out the form again to revoke it.

Own Your Seat at the Table

Clearly there are a lot of rules and regulations that surround lobbying as a 501(c) organization. But if followed properly, your seat at the table will ensure that your nonprofit's priorities are heard, the communities you serve are represented, good ideas are funded and questionable policies are scrutinized. Your public policy campaigns, when fully developed and executed, can make an impact and set the stage for real and lasting success.