Lobbying Rules for Nonprofit Organizations and

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Congress has stated that influencing policy is a legitimate activity for charitable organizations. BUT . . . you must follow the rules. Disclaimer! ...

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Lobbying Rules for Nonprofit Organizations and

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Slide 1:Lobbying Rules for Nonprofit Organizations and Using the Web to Learn About the State Legislature

Action Day to End Violence Against Women Webinar October 14, 2008

Slide 2:Lobbying Rules for Nonprofits

The resource for much of today’s training information is The Advocacy Forum, a project of the Alliance for Justice The Alliance for Justice is a national association of environmental, civil rights, mental health and consumer public interest organizations based in Washington, D.C. For helpful resources and free technical assistance visit www.allianceforjustice.org

Slide 3:Advocacy

Advocacy encompasses many different activities including community organizing, conducting research, public education, nonpartisan voter education, training, litigating, organizing a rally . . . and lobbying

Slide 4:Nonprofits can’t lobby: Myth!

Nonprofits can lobby for policy change! Congress has stated that influencing policy is a legitimate activity for charitable organizations BUT . . . you must follow the rules

Slide 5:Disclaimer!

This presentation provides general information about nonprofit lobbying Consult a tax expert (accountant and/or attorney) for questions specific to your organization’s status

Slide 6:501(c)(3) Organizations

Federal law Tax-exempt Tax-deductible contributions Limited lobbying activities Cannot support or oppose a candidate for office Penalties: Revocation of tax-exempt status and excise taxes on organization and its managers There are 31 types of 501(c) organizations

Slide 7:Lobbying Limits

An organization can choose one of two ways to determine how to calculate its lobbying expenditure limits Insubstantial Test Section 501(h) Expenditure Test

Slide 8:Lobbying Limits: Two Tests

Insubstantial Part Test Default Test Lobbying must be an insubstantial part of an organization’s activities The IRS does not define insubstantial but generally understood to be less than 5% of an organization’s overall activity Measurement includes volunteer time and in-kind contributions used for lobbying Exceeding limit could lead to loss of nonprofit status and excise taxes

Slide 9:Lobbying Limits: Two Tests

501(h) Expenditure Test Must affirmatively elect using form 5768 Sets clear dollar limits on how much money a charity can spend on lobbying Two types of lobbying: direct and grassroots Direct lobbying limit based on formula – a percentage of an organization’s exempt purpose expenditures Includes a grassroots lobbying limit as well (smaller than direct lobbying) Cap is $1 million Penalty is excise tax; loss of nonprofit status if cap exceeded for four consecutive years

Slide 10:Direct Lobbying

Direct lobbying Communication with a legislator To express a view about specific legislation Verbal and nonverbal communication Meetings Phone calls Written messages Symbolic messages

Slide 11:Legislators

Who are legislators? Congress State legislature City Council members President (power to sign into law or veto) Governor (power to sign into law or veto) Members of the executive branch directly related to an issue (i.e. contacting Secretary of Health and Human Services about health bill) The staff of all of the above and employees who participate in formulating legislation

Slide 12:Legislators

Administrative bodies like school boards or housing commissions are generally not considered legislators unless they can make law (NOTE: Minnesota is different and some rulemaking is covered – be sure to check beforehand) The people are considered legislators regarding constitutional amendments, ballot initiatives, referendums (not ballot measures have specific rules under Minnesota law) Nonprofits can weigh in on supreme court justice nominations so long as a legislative process (confirmation) and not an electoral process (contested election)

Slide 13:Specific Legislation

Specific Legislation A bill (includes budget appropriations, taxes, confirmation of judicial and executive branch nominees) A potential bill Just an idea (but must be specific, i.e. not just expressing concern about sexual violence but proposing a bill to increase a penalty for a specific criminal sexual conduct) Regulations, executive orders, amicus briefs are not specific legislation under federal law (NOTE: Minnesota is different and some rulemaking is covered – be sure to check beforehand)

Slide 14:Communication with Members

When an organization communicates with its members about specific legislation and tells its members to contact legislators about the legislation, this is considered direct lobbying rather than grassroots lobbying Members are those who contribute more than nominal amount of time and money to an organization If the message says “Tell a Friend” it becomes grassroots lobbying Example: Email alerts during state session that provide legislator names and contact information

Slide 15:Grassroots Lobbying

Any communication with the general public expressing a view about specific legislation and includes a direct call to action Provides information on how to contact legislators Provides a way to contact legislators (petition, postcard, email link) Indirect call to action is just listing the recipient’s legislator, the names of legislators voting on a bill or those undecided or opposed to an organization’s view on the legislation

Slide 16:Grassroots Lobbying

Mass Media Rule: If you engage in an advocacy campaign without a call to action within two weeks of highly publicized legislation it will be counted as grassroots lobbying Paid mass media communication Either explicitly refers to legislation or encourages general public to contact legislators about general subject of legislation Example: Placing an ad expressing support for safer bridges and better roads while transportation funding debate occurs

Slide 17:Lobbying Exceptions

Nonpartisan analysis, study or research: substantive report with “full and fair” discussion of the issues (both sides) that is widely distributed Responding to requests for technical assistance or advice from head of a governmental body, committee or subcommittee – you’re the expert

Slide 18:Lobbying Exceptions

Self-Defense: Communications with legislators or legislative bodies regarding issues affecting an organization’s existence, powers, tax exempt status Examinations of broad social, economic and social problems that do not express a view about specific legislation and have no call to action.

Slide 19:Subsequent Use Rule

Non-lobbying advocacy communications or research materials used in the future with a call to action added would be considered grassroots lobbying Safe harbors: non-lobbying distribution greater than lobbying distribution or grassroots use is 6 months after expenditure was made

Slide 20:Recordkeeping

Keep track of your lobbying activities: Direct costs (goods or services purchased for lobbying) Staff time Overhead (what percentage went to lobbying?)

Slide 21:Working in Coalitions

Be aware of your tax-exempt status vs. that of your partners -- some may have more flexibility such as a 501(c)(4) – “stay in your own lane!” Formal coalition: may be organized, have tax-exempt status Informal coalition: members pool money, restrictions follow the money (any contributions to lobbying would apply to your organization’s lobbying limit)

Slide 22:Working in Coalitions

Joint nonpartisan activity Voter education and registration Training and technical assistance List sharing 501(c)(3) can give list free of charge to other 501(c)(3) It can exchange lists with a 501(c)(4) or 527 political organization (but no contingency and no partisan information can be on the list) It can rent its names to a 501(c)(4) or 527 at fair market value It can accept a list from a 501(c)(4) or 527 (same restrictions as above)

Slide 23:Who are Lobbyists?

A person Paid or compensated greater than $3,000 from all sources in a year to lobby Not compensated but spends greater than $250 of her own funds in any year (not including travel expenses and membership dues) on lobbying Includes own lobbying and encouraging others to lobby Someone who provides administrative support to a lobbyist but does communicate with public officials or encourage others to do so is not a lobbyist

Slide 24:Minnesota Lobbying Rules

Lobbyists must register Lobbyists and their principals must publicly disclose expenditures on lobbying to the Campaign Finance and Public Disclosure Board Lobbyists and their principals cannot give gifts to officials (plaques are okay and it is okay to feed a speaker at a reception, meal or meeting that is scheduled; under $5 okay) Certain campaign contribution limits (report solicited contributions if over $5,000; no contributions during session)

Slide 25:Questions?

Slide 26:Using the Web to Learn About the State Legislature

We will now go to www.leg.state.mn.us for a tour of the state legislature website

Slide 27:Any Questions?

Contact Information: Carla Ferrucci Minnesota Coalition for Battered Women [email protected] 651.646.6177 Ext. 27 and Caroline Palmer Minnesota Coalition Against Sexual Assault [email protected] 651.209.9993 Ext. 214

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