Rules Of 501 C 3 Nonprofit Lobbying Naeyc

Leo Migdal

-Dec 14, 2025, 2:29 AM

rules of 501 c 3 nonprofit lobbying naeyc

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: In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status. Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the...

It does not include actions by executive, judicial, or administrative bodies. An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing... Organizations may, however, involve themselves in issues of public policy without the activity being considered as lobbying. For example, organizations may conduct educational meetings, prepare and distribute educational materials, or otherwise consider public policy issues in an educational manner without jeopardizing their tax-exempt status. 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 regulations governing lobbying activities for 501(c)(3) non-profits.

Ensure compliance and avoid penalties. A 501(c)(3) organization is a tax-exempt entity recognized by the Internal Revenue Service (IRS) for operating exclusively for charitable, religious, educational, scientific, or similar purposes. These organizations receive federal income tax exemption, and contributions made to them are often tax-deductible for donors. While they enjoy significant tax benefits, 501(c)(3) organizations face restrictions on their political activities, particularly regarding lobbying and political campaign intervention. They are prohibited from participating in or intervening in any political campaign for any political candidate. Lobbying for 501(c)(3) organizations involves attempts to influence legislation.

Internal Revenue Code Section 4911 distinguishes between direct and grassroots lobbying. Direct lobbying occurs when an organization communicates directly with legislators or their staff to express a view on specific legislation. Grassroots lobbying involves encouraging the public to contact legislators. This includes communications referring to specific legislation, expressing a view, and urging public contact with elected officials. Both direct and grassroots lobbying communications must refer to specific legislation to be considered lobbying. By default, 501(c)(3) organizations are subject to the “insubstantial part” test, meaning no substantial part of their activities can involve influencing legislation.

This test is often considered vague because the IRS has not defined “substantial.” Historically, a 1952 federal court case suggested 5% of an organization’s “time and effort” was insubstantial, and many tax practitioners advise... Both expenditures and non-monetary activities, like volunteer time, are considered. Exceeding this undefined limit can jeopardize an organization’s tax-exempt status, potentially leading to revocation. Lobbying is often viewed as a contentious and complex aspect of the political landscape, but for nonprofits, it can be a powerful tool for advocacy and change. Nonprofit organizations play a crucial role in shaping public policy and influencing legislation that aligns with their missions. By engaging in lobbying activities, nonprofits can effectively communicate their positions on issues that matter to their constituents and the communities they serve.

This engagement not only amplifies their voice but also helps to ensure that the needs of vulnerable populations are represented in the halls of power. Understanding the nuances of lobbying is essential for nonprofit professionals who wish to navigate this landscape effectively. While there are strict regulations governing lobbying activities, nonprofits are not prohibited from advocating for their causes. In fact, many organizations find that lobbying is an integral part of their mission, allowing them to push for systemic changes that can lead to long-term benefits for their communities. This article will explore the various types of lobbying activities available to nonprofits, the legal framework surrounding these activities, and best practices for effective advocacy. Lobbying can take many forms, each with its own strategies and objectives.

The two primary categories of lobbying are direct lobbying and grassroots lobbying. Direct lobbying involves direct communication with lawmakers or government officials to influence legislation or policy decisions. This can include meetings with legislators, providing testimony at hearings, or submitting position papers that outline an organization’s stance on specific issues. For example, a nonprofit focused on environmental conservation might meet with state legislators to advocate for stronger regulations on pollution. On the other hand, grassroots lobbying seeks to mobilize the general public to influence policymakers indirectly. The federal government, including Congress and the Internal Revenue Service, supports not only broad advocacy but also legislative lobbying by 501(c)(3) charitable nonprofits.

In other words: the freedom of association and right to advocate on public policy, including legislative lobbying. The IRS has material on its website reassuring nonprofits that legislative lobbying is legal. There are pages about legislative lobbying clearly state that charitable nonprofit “organizations may engage in some lobbying” and “involve themselves in issues of public policy without the activity being considered as lobbying.” There is an IRS form – Form 5768 (which is free and less than a page long) – that nonprofits can file that gives them the opportunity to safely engage in lobbying activities as... Read more about this process, referred to as filing the “501(h) election.” Many nonprofits and their funders prefer to hear the words from the authority itself.

To make it as plain as day, in 2000 the Center for Lobbying in the Public Interest asked the IRS to answer basic questions about charitable nonprofits engaging in legislative lobbying. The IRS, in its official response letter, provided lots of assurance, including: Does your organization want to engage with public policy, influence a decision on an important bill, add your voice to a debate? Thousands of human and social services nonprofits have something to say. What are you allowed to do without violating the IRS codes? First, it’s important to define terms.

What IS “lobbying?” It comes from milling around outside legislative chambers in ‘lobbies,’ waiting to buttonhole a member to press your views on a pending bill. Most nonprofits don’t send someone to Washington to stand in the halls outside Congress (unlike big corporations, who set up shop there). But nonprofits do communicate with elected officials about important matters. Unhelpfully and predictably, the language about what nonprofits can do includes terms like “excessive. . .substantial.

. .knowingly.” The rules also differ when it comes to what KIND of nonprofit you are. If your organization is a 501(c)(3) nonprofit, you are more limited in what you can do. The limits include a maximum of 20 percent of the organization’s first $500,000 expenditures, 15 percent of the next 500K, and an annual cap. (These need to be discussed with your tax or legal advisor if you’re planning any significant lobbying.) It gets complicated if your organization urges members to do their own individual messaging.

That steps off into the murky field of “grassroots lobbying” and has its own limits and parameters. If, on the other hand, you’re a 501(c)(4) nonprofit, the rules are much more generous. Just ask ACLU, Sierra Club, National Organization for Women. Those major nonprofits (and many others) spend a lot of time and resources trying to push the Congress in a particular direction. 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... 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:

Rules Of 501 C 3 Nonprofit Lobbying Naeyc

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