Now that November elections have passed, this period in D.C. is called the “lame duck sprint.” Congress has returned this week and has a long to-do list before leaving for the holidays. A number of important issues that directly impact nonprofits are being considered, including: 1) renewing the universal charitable (non-itemized) deduction, 2) raising the charitable mileage rate, 3) extending disaster-relief giving incentives, and 4) restoring and modifying the Employee Retention Tax Credit through 2022 to better reflect current costs. If you are interested in these issues, the National Council of Nonprofits provides more information so you can educate yourself and easily take action.
Whenever I bring up important policy issues like those above, I am always asked — can nonprofits lobby?
The idea that nonprofits can’t lobby is one of the most pervasive myths within the sector. As your resident “Social Mythbuster,” we are seizing this opportunity to set the record straight. The answer is YES, nonprofits can lobby, albeit with a string or two attached. While the Johnson Amendment does restrict nonprofits’ ability to engage in direct partisan activity, e.g., endorsing or contributing to political candidates, it does not restrict their ability to participate in public policy. Charitable organizations can and should advocate around mission-driven issues that impact our communities and our nation. First, tax-exempt public charities (not private foundations) can engage in lobbying if it is not a “substantial part” of the organization’s activities, according to federal rules. Second, these organizations can engage in unlimited advocacy efforts to educate legislators and their staff on their cause. It’s important to note the difference between lobbying and advocacy:
Lobbying is an attempt to influence a specific piece of legislation before a federal, state or local legislative body. It could include communicating about that specific piece of legislation and your viewpoint on that issue. It could also include communicating with the general public or your stakeholders about your view and requesting that they take action on said specific piece of legislation.
Advocacy, on the other hand, is much broader and includes almost anything that does not directly influence a specific piece of legislation. It includes the development of nonpartisan research reports or technical assistance given to a government body requesting input. Advocacy could include communicating your organization’s viewpoint with the general public or stakeholders, but not asking them to take action.
These guidelines only govern “lobbying” on legislative policies. In contrast, communications influencing executive, administrative or judicial policies are not deemed lobbying under federal guidelines. (Please refer to state and local laws, which may differ.)
Bottom line — Nonprofits can lobby and advocate their positions, but they must monitor their efforts and properly track time and expenditures of lobbying efforts to ensure they stay within the law. They must also file the proper reporting paperwork with the government. With advocacy now becoming a more popular tool in our social change toolkit, we must understand how to use it effectively to speak up on issues that matter to us and those we serve.
We encourage all nonprofits to expand their mission beyond their direct work in the community and start including advocacy (and even lobbying when the need arises) to policymakers about that work as subject matter experts. If you are interested in doing more in 2023, we recently published a step-by-step process on how to integrate advocacy into your nonprofit. It is likely to be a busy year for state legislatures across the country as well. We encourage you to follow issues at state and national levels by joining your state nonprofit association and through the National Council on Nonprofits newsletter.
Start speaking up today! We would love to hear what steps your organization has taken to lobby or advocate on behalf of the policies and issues affecting your clients.
This blog article is meant to inform readers and does not constitute legal or financial advice. Please consult with your attorney and/or tax advisor before making any decisions regarding your organization.