Safely stay within legal limits
for your 501(c)(3)
April Ingle
Executive Director
Georgia River Network
Alliance for Justice
Provides one-on-one technical assistance to
nonprofits via phone and letters.
Call anytime, M-F 9:00 a.m. - 5:30 a.m. EST
Ask for Nonprofit Advocacy technical
assistance.
866-NPLOBBY, (866-675-6229)
advocacy@afj.org
www.afj.org
Election Activities
Strictly forbidden from engaging in any political
activity in support of or in opposition to any
candidate for public office.
The IRS will consider all of the facts and
circumstances surrounding an activity to
determine whether the activity violates this
prohibition.
501(c)(3) public charity organizations can engage
in nonpartisan voter education activity.
Election Activities - What You Can Do
Work on ballot measures (considered lobbying)
Conduct nonpartisan public education and training
sessions about participation in the political
process
Educate ALL of the candidates on public interest
issues
Publish legislative scorecards - RESTRICTIONS
Prepare candidate questionnaires and create
voter guides - RESTRICTIONS
Election Activities – What You Can Do
Canvass the public on issues
Sponsor candidate debates - RESTRICTIONS
Rent at fair market value mailing lists and facilities
to other organizations, legislators, and Candidates
- RESTRICTIONS
Conduct nonpartisan get-out-the-vote and voter
registration drives
Establish a controlled 501(c)(4) organization
Work with all political parties to get its positions
included on the party’s platform - RESTRICTIONS
Election Activities – What You Can’t Do
Endorse candidates for public office
Make any campaign contributions
Make expenditures on behalf of candidates
Restrict rental of your mailing lists and facilities to
certain candidates
Ask candidates to sign pledges on any issue (tacit
endorsement)
Increase the volume or amount criticism of
incumbents as election time approaches
Publish or communicate anything that explicitly or
implicitly favors or opposes a candidate
Election Activities - Individuals
Does not apply to the activities of officers,
directors, or employees acting in their individual
capacity.
Staff may work on political campaigns outside
work hours, or using their available leave time.
No one may use the organization’s facilities,
equipment, personnel, or other resources to
provide support or oppose a candidate or
campaign.
Lobbying Is Allowed by the IRS
Lobbying is limited
Organizations must choose one of two
standards:
– Insubstantial Part Test
– Expenditure Test – 501 (h)
Limits are far more generous under the
501(h) election
Insubstantial Part Test
“No substantial part of a charity’s
activities… be carrying on propaganda or
otherwise attempting to influence
legislation.”
“Substantial” is not further defined
Since charities which exceeded this vague
standard risked losing their exemptions,
many arbitrarily limited themselves to a
tiny amount of lobbying.
Expenditure Test-501 (h)
Sets specific dollar limits
The amount spent to influence legislation
without losing its exempt status or incurring
penalty taxes is calculated as a percentage
of a charity’s total exempt purpose
expenditures
Exempt purpose expenditures are typically
the organization’s budget minus some
fundraising and capital costs.
Expenditure limits under 501(h)
20% of the first $500,000 of exempt
purpose expenditures, plus
15% of the next $500,000 of exempt
purpose expenditures, plus
10% of the next $500,000 of exempt
purpose expenditures, plus
5% of the remaining exempt purpose
expenditures up to a total cap of $1
million
Lobbying Defined and Described
Communications that are intended to influence
specific legislation.
Legislation is action by a legislative body including
“introduction, amendment, enactment, defeat or
repeal of Acts, bills, resolutions, or similar items.”
Legislative bodies are Congress, state and local
legislatures, and the general public (referenda,
initiatives, or constitutional amendments).
Typically, they are not judicial, executive and
administrative bodies (school and zoning boards).
501(h): Two kinds of lobbying:
Direct and Grass Roots
Direct Lobbying
Generally:
– Legislator
– An employee of a legislative body
– Any other government employee who may
participate in the formulation of the legislation
It must refer to a specific piece of
legislation and express a view on it.
Direct Lobbying Exceptions
Nonpartisan analysis, study or research that
presents all sides of an issue
Responses to written requests for assistance
from committees or other legislative bodies
Challenges to or support for legislative
proposals that would change the organization’s
rights or its right to exist
Examinations and discussions of broad social,
economic, and similar problems.
Grass Roots Lobbying
Generally: An attempt to influence specific
legislation by encouraging the public, other than
the organization’s members, to contact
legislators about that legislation
Must refer to specific legislation, reflect a view
on it and encourage the recipient to take
lobbying action on it.
Grass roots lobbying expenditures are limited to
25% of the organization’s total lobbying limit.