US Charities may spend a few of their money and time lobbyingso long as these organizations should not primarily there to Influence on federal lawsThis rule applies to all non-profit charities, from hospitals and social service providers to museums and environmental organizations.
Charities can lobby by contacting legislators or other public officials on to propose, support or oppose laws. They may engage in indirect – or basis – Lobbying by encouraging their supporters and others to contact public officials to influence laws.
Two tests available
The Internal Revenue Service assesses the lobbying activities of charities in two ways. First, the IRS determines that lobbying, including staff time and organizational expenses, just isn’t a “Essential part” of what a charity does. There isn’t any official definition of how much lobbying is just too much.
Because the term “substantial part” is unclear, non-profit organizations that often engage in lobbying may Spending test, called 501(h electionIt sets specific limits on the quantity of money and time charities can spend on lobbying, depending on their size.
For example, if a charity's annual expenses are lower than $500,000, it could possibly spend as much as 20% of its budget on lobbying. Charities with budgets of $17 million or more cannot spend greater than $1 million per yr on lobbying.
Charities must report their lobbying activities, including all related expenses of their employees or volunteers, together with the 990 tax return. These documents are mandatory for all charities except churches and municipalities.
Churches, that are routinely considered charities, must Essential parts test.
The Johnson Amendment
While charities can lobby to some extent, a measure from 1954, the so-called Johnson Amendment, Political activities are taboo for charitiesincluding the churches. They may neither support nor oppose political candidates nor campaign for them without jeopardizing their tax exemption. They also cannot make donations to lawmakers or policymakers.
However, charities, including churches, can conduct nonpartisan voter registration drives to register voters.
Some charities are affiliated with other tax-exempt organizations that Charitieswho’re allowed to lobby without restrictions.
However, charities are free to spend as much staff money and time as they need on what the IRS calls “public policy issues,” so long as those educational efforts should not tied to a political party, specific candidates or specific pieces of laws.
For example, a homeless shelter can organize community forums and publish reports on the causes of homelessness without jeopardizing its status as a charity. It may engage in educational campaigns on best practices for reducing homelessness without supporting a specific legislative proposal or political party.
Similarly, an environmental group can hold workshops and seminars on the results of plastic pollution. It can encourage the general public to make use of less plastic without supporting any particular environmental laws or political figures.
States may regulate lobbying by nonprofit organizations. For example, the Secretary of State’s Office requires nonprofit employees who engage in lobbying to Register with the state and pay a registration fee.
How much lobbying do charities do?
In a study on nonprofit advocacy and lobbying in 2023, conducted by our research team on behalf of Independent sector — a coalition of nonprofits, foundations, and company giving programs — we found that just one in 4 nonprofits has ever formally lobbied the federal government. That's a giant drop from 2000, when three in 4 organizations reported doing at the very least some lobbying.
We imagine, Misunderstanding of the legal regulations Lobbying is one factor that has contributed to this decline.
Why any such lobbying is vital
If the IRS finds that charities are lobbying an excessive amount of, those groups can be fined and even lose their tax exemptionThis is amazingly rare, but when it does occur, it has a chilling effect on the non-profit sector.
Many charities feed the hungry, protect the environment, and supply legal advice to low-income people. Through lobbying, charities can attempt to be certain that the problems vital to the people they serve and the causes they represent are reflected in government decisions and laws.
image credit : theconversation.com