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What’s this about? This page introduces advocacy and lobbying as concepts, and how your IRS category may limit your activities in these domains.

What do I need to do? Review this page if you intend to engage in advocacy or lobbying through your nonprofit.

Contents

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Regulator guidance

• IRS: Lobbying </aside>

Advocacy vs. lobbying

Advocacy attempts to affect some aspect of society, typically by raising awareness about specific issues; Lobbying is a type of advocacy that aims to influence specific legislation at the local, state, or federal level.

Advocacy

Advocacy is educating and creating awareness among legislators and the general public on issues facing the community and the importance of aligning public policy to address the need. Advocacy does not endorse or oppose specific legislation, but rather informs the community at large how public policy decisions impact service provision.

The following activities are considered advocacy (not lobbying):

• Providing technical assistance or advice to a legislative body or committee in response to a written request
• Making available nonpartisan analysis, study or research
• Providing examinations/discussions of broad, social, economic, and similar issues
• Communicating with a legislative body regarding matters that 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-defence" exception)
• Updating the members of your own organization on the status of legislation, without a call to action

Lobbying

Lobbying is attempting to influence legislators to support or oppose a particular issue or piece of legislation and is allowed for nonprofits only within certain parameters.

• Direct lobbying is communication with a legislator, legislative staff or legislative body, or any covered executive branch or other government employee who may participate in the formulation of legislation. The communication refers to a specific piece of legislation and expresses a view on that legislation. This might include helping to write a piece of legislation, doing research at the request of a policymaker, or meetings and discussions with government representatives.
• Grassroots lobbying is an attempt to influence specific legislation by encouraging the public to contact legislators about that legislation. A communication constitutes grassroots lobbying if it refers to specific legislation, reflects a view on that specific legislation and encourages the recipient of the communication to take lobbying action. This type of communication is known as a “Call to action.” This might include posting social media posts that support or oppose a policy if it’s meant to influence the public.

501(c)(3) vs. 501(c)(4)

501(c)(3) nonprofits — the most common, tax-exempt nonprofit category — are allowed to engage in some lobbying activities provided that they don’t engage in excessive lobbying or spend a certain percentage of their budget on lobbying.

501(c)(3)s can coordinate nonpartisan get-out-the-vote, voter registration, and education drives, as well as nonpartisan voter protection activities. But they may not promote or oppose political candidates or parties in any way — or risk losing their tax exemption.

501(c)(4) nonprofits, on the other hand, are unlimited in their abilities to lobby for and against the legislation, as well as support and oppose ballot measures.

Guidance for 501(c)(3)s

• If you’re setting up, or have already set up, a 501(c)(3) nonprofit, you should understand the risks associated with lobbying. A nonprofit organization is not allowed to influence legislation or policymakers, but may engage in some lobbying (making sure not to use >10% of its resources on lobbying activities).
• Per IRS regulations, a nonprofit organization is not allowed to influence legislation or policymakers.
• Lobbying includes both federal and state legislation. Use of funds includes the same limitations on foreign policymakers; for example, the use of US 501(c)(3) funds to influence UK policy.
• We suggest that 501(c)(3) nonprofits adopt the following rules of thumb:
  • Ensure your organization doesn’t use more than 10% of its resources on lobbying activities.
  • Ensure the organization’s annual lobbying activities expenditure doesn’t exceed $1,000,000.
  • Ensure any group or individual that the organization funds follows the same rules.
  • Avoid engaging in any activities that are actively or directly trying to influence legislation.
  • If your organization receives a mix of 501(c)(3) and non-501(c)(3) funding, keep all 501(c)(3) funds in a separate bank account. Expenditures from this account are then only used following non-lobbying rules.

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