Advocacy and Lobbying Rules for Nonprofits. Agenda. Comparing Nonprofits. Webinar July 27, 2010
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1 Advocacy and Rules for Nonprofits Webinar July 27, 2010 Agenda 1. What does it mean to be a 501(c)(3) organization? 2. What is advocacy? 3. Why do advocacy? 4. success stories 5. What is lobbying and how much can we do? 6. Resources Comparing Nonprofits Examples Tax Treatment Activities Electoral Activities 501(c)(3) Alliance for Justice LCV Education Fund Tax-Exempt Contributions taxdeductible Private Foundation grants Limited Cannot support or oppose a candidate for office 501(c)(4) AFJ Action Campaign LCV Tax-Exempt Unlimited Secondary activity Follow federal and state election law Political Organizations Connected/SSF LCV PAC Independent Emily s List Tax-Exempt Rare and usually taxable Usually, sole activity 1
2 What is Advocacy? Organizing Educate s Partisan Political Get to Know s Research Organize a Rally Regulatory Efforts Public Education Nonpartisan Voter Ed. Educational Conferences Exceptions Training Litigation Examples Of Advocacy 2
3 Why Advocate? Create Systemic Change Protect Current Funding Educate s for better policy: You are an expert Get to know policy makers so they know to turn to you Discuss Broad Social Issues, Foster Discussion Empower Your Constituents Nonprofits Can and Should Lobby for Policy Change! 3
4 How do you Determine Your Limits? Use one of these tests: Insubstantial part Test OR 501(h) Expenditure Limits Insubstantial Part Test Default Test Activities-based What Is Insubstantial? Not Defined Non-expenditures Count Penalty Limits 501(h) Expenditure Test IRS Form 5768 Expenditure-based Dollar-based Limits Defines $1 Million Cap Penalty Less Severe Churches Cannot Elect 4
5 Limits Under 501(h) 1. Calculate organization s Exempt Annual Purpose Expenditures Expenditures (for most organizations) 2. Overall lobbying limit Annual Expenditures $500,000 or less $500,000 to $1 million $1 million to $1.5 million $1.5 million to $17 million Over $17 million 20% Overall Limit $100,000 plus 15% of excess over $500,000 $175,000 plus 10% of excess over $1 million $225,000 plus 5% of excess over $1.5 million $1,000, Grassroots lobbying limit is 25% of overall limit Limits Under 501(h) for 501(c)(3) with $2 million in Annual Expenditures $2 million Annual Expenditures $500,000 or less $500,000 to $1 million $1 million to $1.5 million $1.5 million to $17 million Over $17 million 20% Overall Limit $100,000 plus 15% of excess over $500,000 $175,000 plus 10% of excess over $1 million $225,000 plus 5% of excess over $1.5 million $1,000,000 $225,000 +$ 25,000 $250,000 Limits Under 501(h) Total Limits for 501(c)(3) making the 501(h) election with annual expenditures of $2 million Education & Non- Advocacy Overall Limit: $250,000 Grassroots Limit: $62,500 5
6 What Is? Direct Expresses A View About Specific Direct Federal Members of Congress State State Legislature Local City Council Members 6
7 Direct President, governor, mayor or other executive official who participates in the formulation of legislation Direct When is Hillary Clinton, US Secretary of State, a legislator? Expresses a View About Specific Direct Special Purpose Boards School boards Planning commissions Zoning commissions Water districts 7
8 Special Rule Direct Members of the general public are legislators Ballot Measures Ballot initiatives Referenda Constitutional amendments Bond measures Specific Direct Still specific legislation even if - not yet introduced - not yet written - not fully fleshed out Expresses A View About Specific Not Specific Direct Regulations Enforcing laws Executive Orders Litigation Expresses a View About Specific 8
9 Direct Grassroots Grassroots Expresses A View About Specific Grassroots Expresses a View Call to Action 9
10 Grassroots Grassroots Action Alert: Oppose Alito s Nomination The Judiciary Committee is voting today on the nomination of Sam Alito to the US Supreme Court. Members of the Judiciary Committee who are undecided on Sam Alito s nomination include: Patrick Leahy Edward Kennedy Charles Grassley Arlen Spector Orrin Hatch Joseph Biden Herbert Kohl Expresses a View Call to Action Telling to contact legislator(s) Providing address, telephone number, and/or other contact information of legislator(s) Providing mechanism to enable communication with legislator(s) Identifying legislator(s) Grassroots Expresses a View Call to Action 10
11 Grassroots Not Expresses a View Call to Action Grassroots Expresses a View Call to Action Grassroots? Expresses a View Call to Action 11
12 Ask The Experts Ask The Experts Ask The Experts 12
13 Ask The Experts WEST COAST Alliance For Justice 1611 Telegraph Avenue Suite 1006 Oakland, CA EAST COAST Alliance for Justice 11 Dupont Circle, NW 2 nd Floor Washington, DC advocacy@afj.org for fact sheets and publications 13
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