Limitations On Lobbying Activities The Rules For 501 C 3

Leo Migdal

-Dec 14, 2025, 4:40 AM

limitations on lobbying activities the rules for 501 c 3

by Jeffrey S. Tenenbaum, Esq. Managing Partner Tenenbaum Law Group PLLC Nonprofit organizations that qualify for federal income tax exemption under Section 501(c)(3) of the Internal Revenue Code (the "Code") have the most favorable tax status, but they also have the most restrictions on government... To maintain their 501(c)(3) tax-exempt status, these organizations must avoid all political campaign activities and must keep lobbying within permissible limits. While there is an absolute prohibition on 501(c)(3) organizations participating or intervening in any political campaign on behalf of or in opposition to candidates for public office, 501(c)(3) organizations can engage in a relatively...

1. The Lobbying Election. The definition of activities considered to constitute "lobbying," as well as the extent to which a 501(c)(3) organization may conduct such activities before incurring penalties, varies depending on whether the organization has chosen to... Most informed 501(c)(3) organizations that lobby choose to make the election, and, consequently, are governed by a special "expenditures" test, rather than the "substantiality" test governing non-electors. In stark contrast to the very vague and sparse rules governing non-electors, the expenditures test provides mathematical methods to concretely determine the extent to which an electing organization may engage in lobbying without incurring... Congress enacted the expenditures test and related rules (found in Sections 501(h) and 4911 of the Code) to relieve the uncertainty of the substantiality test.

Other key advantages of "electing" are the numerous exceptions provided for what is considered lobbying, the imposition of penalty taxes for excessive lobbying instead of the immediate loss of tax exemption, a safe harbor... Political activities and legislative activities (commonly referred to as lobbying) are two different things and are subject to two different sets of rules and have different consequences of exceeding the limitations. The rules applied in a given situation depend on several issues: Learn more about the benefits, limitations and expectations of tax-exempt organizations by attending 10 courses at the online Small to Mid-Size Tax Exempt Organization Workshop. Navigate the complex IRS rules for 501(c)(3) lobbying. Understand permissible activities, expenditure limits, and how to maintain your tax-exempt status.

Nonprofit organizations recognized as tax-exempt under Internal Revenue Code (IRC) Section 501(c)(3) serve various public purposes, including charitable, educational, and religious activities. While these organizations face restrictions on political engagement, they are permitted to conduct a limited amount of lobbying. Understanding these regulations is important for 501(c)(3) organizations to maintain their tax-exempt status, and the IRS provides guidelines to help them navigate influencing legislation while adhering to tax law. The Internal Revenue Service (IRS) defines lobbying as activities intended to influence legislation. This includes direct lobbying, which involves communicating directly with legislators or their staff to express a view on specific legislation. Grassroots lobbying attempts to influence legislation by affecting public opinion and encouraging the public to contact legislators regarding specific legislative matters.

Both types must refer to and reflect a view on specific legislation. Certain activities are not considered lobbying under IRS rules. These include nonpartisan analysis or research that presents facts objectively. Communications with executive branch officials are not considered lobbying unless aimed at influencing legislation. Providing technical assistance or advice to a governmental body in response to a written request, or engaging in self-defense lobbying concerning matters directly affecting the organization’s existence or tax-exempt status, are excluded from the... For 501(c)(3) organizations, the default standard for permissible lobbying is the “substantial part” test.

This test stipulates that no substantial part of an organization’s activities may involve attempting to influence legislation. If lobbying constitutes a substantial part of an organization’s activities, it risks losing its tax-exempt status. The IRS and courts have not precisely defined “substantial,” making this test vague and challenging to apply. 501(c)(3) nonprofit organizations can play an important role in influencing policy and legislation at the federal, state, and local levels. It is important that your organization understand the rules for lobbying before engaging in any lobbying activities. This document provides an overview of nonprofit lobbying definitions, rules, dos and don’ts, as well as links to additional resources and information.

A 501(c)(3) organization is subject to heightened restrictions on lobbying activities, A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status. Lobbying may not constitute a “substantial part” of the activities of the 501(c)(3) organization. Direct lobbying: attempts to influence a legislative body through communication with a member or employee of a legislative body, or with a government official who participates in formulating legislation. These individuals are considered “covered” officials, which generally includes legislative branch officials, such as members of Congress, their staffs, and committee staffs, as well as executive branch officials, including the President, White House and... Grassroots lobbying: attempts to influence legislation by attempting to affect the opinion of the public with respect to the legislation and encouraging the audience to take action with respect to the legislation. Key elements of grassroots lobbying may include:

Election seasons bring a surge of headlines, opinions, and strong feelings. If your nonprofit is stepping into that conversation (or wondering whether you can), you’re not alone. Many nonprofit leaders want to educate their communities, respond to legislation, or share what’s at stake, but worry about crossing a line without meaning to. That worry makes sense. The rules for 501(c)(3) organizations aren’t always clear at first glance. But once you understand what’s allowed and what isn’t, advocacy becomes far less stressful.

You can speak up for your mission and stay compliant at the same time. First, let’s get one misconception straight: Lobbying is not promoting a certain candidate or party. Lobbying involves influencing laws themselves. That can happen in two ways: By contrast, issue advocacy — explaining how a policy impacts your community, sharing research, or hosting educational events — is generally allowed as long as you’re not pushing people to take a position on... Here are a few examples to make the distinction clearer:

Researched and written by Elana Richman. As noted in particular sections, portions of the guide were adapted from the following publications: Lobbying Issues by Judith E. Kindell and John Francis Reilly, U.S. Internal Revenue Service, 1997; and The Nonprofit Lobbying Guide, Second Edition: Bob Smucker, Independent Sector, 1999. Edited by Andrew M. Loza.

Nothing contained in this document is intended to be relied upon as legal advice or to create an attorney-client relationship. The material presented is generally provided in the context of Pennsylvania law and, depending on the subject, may have more or less applicability elsewhere. There is no guarantee that it is up to date or error free. Text may be excerpted and reproduced with acknowledgement of WeConservePA. 501(c)3 organizations may lobby to affect government policy outcomes, but they must follow federal and state regulations. Lobbying, attempting to influence legislation, either through direct contact with legislators and government employees who participate in the formulation of legislation, or by urging others to do the same, is an important tool by...

If engaging in lobbying, nonprofit organizations who hold 501(c)3 status under the federal tax code should be aware of three sets of rules: Be sure to check out Topic #2 for an overview of the basic lobbying rules (federal, state, local). Here, we summarize only the federal tax law limitations, but those disclosure rules discussed in Topic #2 are important, too. Under the U.S. Internal Revenue Code, Section 501(c)(3), public charities are not prohibited from lobbying and, in fact, it’s their constitutional right to engage in activities to influence legislation, but one condition of receiving 501(c)(3) public charity... What does “no substantial part” mean?

Great question, that’s not always been clear. Since the 1934 enactment of the federal lobbying limitation, organizations (and the legal sector) struggled to understand the limits — mostly because no one knew the meaning of “no substantial part.” Congress responded in... Organizations are now either subject to the old default rule, the Substantial Part Test (which is a murky one) or they can choose (by making an “election”) to be measured by the Expenditure Test... This election — called the “h” election because it is codified in Section 501(h) of the Internal Revenue Code — is only available to qualifying public charities and is not available to private foundations... The Expenditure Test is helpful for the clarity it provides and is good enough for most public charities; organizations that have a lot of grassroots lobbying and expenses related to that type of lobbying... The Expenditure Test provides a bright-line numbers test, which involves recordkeeping and doing some basic math.

Succinctly put, this test allows eligible 501(c)(3) public charities to annually spend on lobbying a certain percentage of the amounts they are spending to carry out their exempt purposes (i.e., program expenses but not...

Limitations On Lobbying Activities The Rules For 501 C 3

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