Investing in Change: Foundation Support for Lobbying and Other Advocacy Abby Levine, Director, Bolder Advocacy Keystone Policy Series Webinar ~ March 29, 2017 501(c)(3) 501(c)(3) 501(c)(4) Private Foundation Public Foundation/ 501(c)(5) Charity 501(c)(6) Examples Tax-Exempt Tax-Exempt Tax Tax-Exempt Contributions Contributions Treatment tax-deductible tax-deductible EXTREMELY LIMITED LIMITED Lobbying UNLIMITED Prohibitive tax on Insubstantial Part or Activities foundation and 501(h) Expenditure managers Secondary Cannot support or Cannot support or activity Electoral oppose a candidate oppose a candidate Activities Must follow for public office for public office election law 1
Public Nonpartisan Education Voter Ed. Influencing Organizing Corporations Lobbying PARTISAN POLITICAL Exceptions Educating Regulatory Legislators Efforts Educational LOBBYING Conferences Get to Know Litigation Legislators Research Training AVENUES OF ADVOCACY Who can be an advocate? If you care about an issue, then you can be an advocate. And as a nonprofit board member, there’s at least one issue that you care about – your organization’s mission. Advocacy is simply communicating the importance of your mission to others. And helping others understand how larger issues or decisions in your community are impacting your organization, its work, and the community you serve. If you have a passion and a voice, you have what it takes to be an advocate. 2
What you can do 1. Get started . Download the board discussion guide at www.standforyourmission.org. 2. Get informed. Jump-start your advocacy efforts with tips and guidelines from our resource center. 3. Get personal. Tell others how board advocacy has made a difference for your organization and the people you serve. 4. Get talking. Tell other nonprofit leaders why we need to stand for our missions! Visit www.standforyourmission.org to join the conversation. Supporting ADVOCACY 3
BUILD Capacity 4
GENERAL SUPPORT Grants RESPONDER : Policy HAPPENS 5
CONVENER: Educate and empower grantees 6
SPECIFIC PROJECT Grants ADVOCATE 7
Public Foundations CAN Lobby Public foundations can lobby Insubstantial part test OR 501(h) expenditure test Private Foundations Tax on Lobbying Private foundations pay tax on lobbying expenditures 20% on foundation; 5% on managers 100% on foundation; 50% on managers 8
INSUBSTANTIAL PART TEST 1. Default test 2. What is “insubstantial”? 3. Lobbying not defined 4. Activities-based 5. Penalty or 501(H) EXPENDITURE TEST 1. Dollar-based limits 2. One-time election – IRS Form 5768 3. Expenditures only 4. Definition of lobbying 5. Penalty less severe 1. Calculate organization’s annual expenditures. 2. Overall lobbying limit: ANNUAL EXPENDITURES OVERALL LOBBYING LIMIT $500,000 or less 20% $100,000 +15% of excess over $500,000 to $1 million $500,000 $175,000 +10% of excess over $1 $1 million to $1.5 million million $225,000 + 5% of excess over $1.5 million to $17 million $1.5 million Over $17 million $1,000,000 3. Grassroots lobbying limit is 25% of overall limit. 9
DIRECT communication legislator LOBBYING expresses a view about specific legislation for organizations GRASSROOTS using 501(h) communication general public & private expresses a view foundations about specific legislation call to action DIRECT Communication Legislator Expresses a view about specific legislation GRASSROOTS Communication General public Expresses a view about specific legislation Call to action 10
DIRECT U.S. Legislators Communication Legislator Expresses a view about specific legislation State Legislators GRASSROOTS Communication County Board of General public Supervisors, Expresses a view City Council about specific legislation Call to action school boards zoning boards housing authorities sewer and water districts other “special purpose bodies” NOT LEGISLATORS 11
DIRECT Communication Legislator Expresses a view about specific legislation GRASSROOTS Communication General public Expresses a view about specific legislation Call to action DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action 12
NOT SPECIFIC LEGISLATION SPECIFIC LEGISLATION The August recess isn’t meant for playtime! Ask Congress to include crucial civil rights priorities in the Elementary and Secondary Education Act. 13
NOT LEGISLATION Regulations Executive Orders and Executive Actions Enforcement of Existing Laws Litigation IRS Lobbying or not? A youth justice organization urges state legislators to pass a bill to limit juvenile solitary confinement: LOBBYING An immigrant rights organization asks the police chief to stop asking if suspects are undocumented: NOT LOBBYING An economic justice organization asks VA Senator Adam Ebbin to sponsor a minimum wage bill: LOBBYING A youth and education rights organization asks a school district to increase funding for English language learners: NOT LOBBYING 14
DIRECT Communication Legislator Expresses a view about specific legislation Grassroots GRASSROOTS Lobbying Communication General public Expresses a view about specific legislation Call to action Call to Action DIRECT Communication TELLING TO CONTACT Legislator legislator(s) or Expresses a view about specific PROVIDING CONTACT INFO, legislation like phone number, e-mail address, mailing address, and/or other contact info of legislator(s) or GRASSROOTS Communication PROVIDING MECHANISM General public to enable communication with legislator(s) or Expresses a view about specific legislation IDENTIFYING Call to action legislator(s) 15
DIRECT Communication Legislator Expresses a view about specific legislation GRASSROOTS Communication General public Expresses a view about specific legislation Call to action DIRECT Communication Legislator Expresses a view These Are NOT Calls to about specific Action: legislation “Learn more” “Take action” GRASSROOTS “Support our efforts” Communication “Get involved” General public Expresses a view about specific legislation Not Lobbying Call to action 16
Call to Action DIRECT Communication TELLING TO CONTACT Legislator legislator(s) or Expresses a view about specific PROVIDING CONTACT INFO, legislation like phone number, e-mail address, mailing address, and/or other contact info of legislator(s) or GRASSROOTS Communication PROVIDING MECHANISM General public to enable communication with legislator(s) or Expresses a view about specific legislation IDENTIFYING Call to action legislator(s) 17
Nonpartisan analysis, study, or research Request for technical assistance Self defense Examinations and discussions of broad social, economic, and similar problems Lobbying EXCEPTIONS 18
NONPARTISAN ANALYSIS MUST represent full and fair discussion be broadly disseminated MAY express a view contain indirect call to action limit subsequent grassroots lobbying MUST Invitation in Writing on Behalf of a Committee Available to All Members of Committee MAY Express a View on Specific Legislation Technical ASSISTANCE 19
MUST RELATE TO powers and duties tax-exempt status deductibility of contributions SHOULD consult with attorney SELF DEFENSE IRS Lobbying KEY POINTS for Your Grantees (and Public Foundations): ▪ All 501(c)(3)s have a right to advocate. ▪ All 501(c)(3) public charities have a right to lobby (influence legislation). ▪ Many activities that influence public policy will not even meet the definition of “lobbying.” ▪ Contact Alliance for Justice for assistance. 20
501(c)(3) 501(c)(3) 501(c)(4) Private Foundation Public Foundation/ 501(c)(5) Charity 501(c)(6) Examples Tax-Exempt Tax-Exempt Tax Tax-Exempt Contributions Contributions Treatment tax-deductible tax-deductible EXTREMELY LIMITED LIMITED Lobbying UNLIMITED Prohibitive tax on Insubstantial Part or Activities foundation and 501(h) Expenditure managers Secondary Cannot support or Cannot support or activity Electoral oppose a candidate oppose a candidate Activities Must follow for public office for public office election law Public Foundation Funding for Advocacy and Lobbying: • You can support public charities that engage in non-lobbying advocacy. • You can support public charities that engage in lobbying with grants that are earmarked for lobbying. • You can support public charities that engage in lobbying with grants that are not earmarked for lobbying. 21
Private Foundation Funding for Advocacy and Lobbying: • You can support public charities that engage in non-lobbying advocacy*. • You can support public charities that engage in lobbying with grants that are not earmarked for lobbying. • You cannot support public charities with grants that are earmarked for lobbying. *Private foundations have some limits on support for voter registration. See next slide! Earmarked project funded must be: Sponsored by a 501(c)(3) organization • Nonpartisan • Conducted in 5 or more states • Not confined to one specific election • cycle Run by an organization that meets • additional rules related to the diversity of its funding Special Rules: Funding Voter Registration Drive 22
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