Lobbying is any attempt to influence legislation by:

  1. expressing a position on specific legislation to a legislator or their staff, or
  2. encouraging members of the general public to contact their legislators with a position on a specific legislation (like a “call to action”). Contrary to what many people think, tax-exempt organizations may engage in lobbying if the lobbying is not a substantial part of the organization’s activities. All tax-exempt organizations may engage in education.

Topics covered:

Lobbying limits

  • The “substantial part” test: Known as the “substantial part test,” these rules require that “no substantial part of a charity’s activities consist of carrying on propaganda or otherwise attempting to influence legislation.” “Substantial” has never been clearly defined. However, it is clear that the definition of lobbying under the “substantial part test” is not related to an expenditure of money alone. For example, activities conducted by volunteers to influence legislation may be considered lobbying. Organizations that choose not to elect into Section 501(h) of the tax code (see next bullet point) are still subject to section 501(c)(3) and the rules developed in common law.
  • 501(h) expenditure test: Under this standard, the amount of lobbying is measured as an expenditure of money. It sets forth specific dollar limits, calculated as a percentage of the organization’s total exempt purpose expenditures. Those 501(c)(3) organizations that choose the Section 501(h) election must apply an “expenditure test.” Section 501(h) and its related regulations also provide helpful definitions of lobbying and several exemptions.

Education

To be clear, 501(c)(3) organizations may engage in education without limitation. A nonprofit may educate anyone anytime about the people the organization serves, the impact of policies on these people, and what ideas the organization has to help their community. An organization may tell the stories of clients or speak up when a better solution is possible. An organization may invite a policymaker into their facility to see their work in action. Nonprofits play an important role in the education of their community, including policymakers, about their work and the issues related to their success.

Skip to content