RULES ON LOBBYING ACTIVITIES FOR NON-PROFIT ENTITIES This memorandum summarizes legal restrictions on the lobbying activities of non-profit organizations (as described in section 501(c)(3) of the Internal Revenue Code) and their employees. Lobbying activity is regulated under a variety of laws (e.g., tax, lobbying disclosure, and federal contracting laws), which impose restrictions on different aspects of the same activity. A non-profit organization must ensure that it is in compliance with all of these federal laws, in addition to any relevant state and local laws. This memorandum only addresses federal restrictions and focuses on lobbying activities. 1 As a general rule, non-profit organizations may lobby as long as the lobbying does not comprise a substantial part of the organization s total activity. Individuals employed or associated with such organizations may also lobby, on their own time and using their individual resources. Issues arising under the Byrd Amendment and Office of Management and Budget regulations are also considered below, along with a limited discussion of political activity. Internal Revenue Code Limits on Lobbying Expenditures To maintain tax-exempt status under Section 501(c)(3) of the Internal Revenue Code ( IRC ), an organization must be organized and operated exclusively for certain exempt purposes set forth in Section 501(c)(3): charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. Additionally, the organization may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates. As noted above, the tax code permits a 501(c)(3) organization to lobby, as long as the lobbying does not comprise a substantial part of the organization s total activity. The IRC provides two methods of determining whether an organization s lobbying activities are limited enough to comply. The general method for measuring the extent of lobbying activity is the substantial part test. Alternatively, an organization may elect to use the expenditure test under IRC Section 501(h) to measure lobbying activity. Each of these tests is discussed below. 1 Federal lobbying registration and reporting requirements are addressed in a separate memorandum, Disclosure of Federal Lobbying Activities.
Test No. 1: The Substantial Part Test Under the Substantial Part Test, the IRS examines all the pertinent facts and circumstances to determine whether lobbying activity constitutes a substantial part of an organization s overall activities. In applying this test, the IRS will consider annual expenditures for lobbying, but the IRS has never set a specific limit capping such expenditures. The IRS will also consider other factors, such as the number of hours devoted by staff and volunteers to lobbying activity and the visibility and frequency of such activity in the organization s day-today agenda as well as in the contents of any publications or other organization communications. Under the substantial part test, an organization that conducts excessive lobbying in any taxable year may lose its tax-exempt status, resulting in all of its income being subject to tax. Such organizations are also subject to an excise tax equal to five percent of their lobbying expenditures for the year in which they cease to qualify for exempt treatment. Additionally, organization managers who agree to expenditures knowing that the expenditures would likely result in the loss of tax-exempt status may be subject to a further tax equal to five percent of the lobbying expenditures for the year. The substantial part test is a subjective test, and the IRS has not issued regulations further defining the test or clarifying its application. For this reason, the test is not a particularly reliable means of determining an appropriate level of lobbying activity. Use of the substantial part test is generally advisable only for organizations planning to conduct very limited amounts of lobbying activity. Test No. 2: The Expenditure Test The expenditure test, on the other hand, provides an objective measure for lobbying activity. Organizations other than churches and private foundations may elect the expenditure test under IRC Section 501(h) as an alternative method for determining an appropriate amount of lobbying activity to maintain tax-exempt status. 2 Under the expenditure test, organizations agree to ensure that lobbying expenditures do not exceed specified permissible lobbying nontaxable amounts. The permissible amounts under this test are based on a percentage of 2 Election is made by filing IRS Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organization to Make Expenditures to Influence Legislation. Election can be made at any time during the tax year in which the election is to be effective. An election remains in effect for subsequent years until it is revoked by the organization, using the same IRS Form 5768.
the size of an organization s exempt purpose expenditures (often an organization s total annual budget). If the amount of exempt purpose expenditure is: Less than or equal to $500,000 Greater than $500,000 but less than or equal to $1,000,000 Greater than $1,000,000 but less than or equal to $1,500,000 Greater than $1,500,000 Lobbying nontaxable amount is: 20 percent of the exempt purpose expenditure $100,000 plus 15 percent of the excess of exempt purpose expenditures over $500,000 $175,000 plus 10 percent of the excess of exempt purpose expenditures over $1,000,000 $225,000 plus 5 percent of the exempt purpose expenditures over $1,500,000 Note that the lobbying nontaxable amount is capped at $1,000,000. 3 In addition to these overall limits, no more than 25 percent of lobbying nontaxable amount may be spent on grassroots lobbying. 4 As long as an organization remains within these guidelines, the lobbying activity engaged in will be within allowable limits. Penalty for Excessive Lobbying. The IRS imposes an excise tax on any excessive lobbying expenditures. The penalty is 25 percent of the amount of the excess for the taxable year. 5 For example, if an organization is allowed to spend $100,000 on lobbying but exceeds that limit by $12,000, the penalty will be $3,000. A similar tax is imposed if the limit for grassroots lobbying is exceeded. An organization which is engaged in excessive lobbying activity over a four-year period may lose its tax-exempt status, making all of its income for that period subject to tax. 3 26 U.S. Code 4911(c)(2). 4 26 U.S. Code 4911(c)(4). 5 26 U.S. Code 4911(a)(1).
Decision Whether to Elect: The Expenditure Test vs. Substantial Part Test Expenditure Test Generally allows an organization to spend more of its budget on lobbying up to 20 percent; grassroots lobbying limited to 25 percent of total lobbying. Objective test with definite expenditure guidelines; unpaid volunteer activity not counted against limit. Direct and grassroots lobbying expenditure totals are separately reported on IRS Form 990, Return of Organization Exempt from Income Tax. Penalty for exceeding allowable lobbying expenditures is imposition of an excise tax equal to 25 percent of the excess expenditure, but the IRS may also revoke tax-exempt status. Substantial Part Test Lobbying activity is restricted to an insubstantial percentage of the annual expenditures; no separate limit for grassroots lobbying. Subjective test: no clear definition of lobbying vs. educational activity; IRS considers the overall character and emphasis of the lobbying activities; may count unpaid volunteer activity Form 990 Schedule C requires separate reporting for multiple categories, including media ads, mailings, publications, grants, direct lobbying, rallies, and other activities. Penalty for exceeding allowable lobbying expenditures is imposition of an excise tax equal to 5 percent of the amount of the lobbying expenditures, plus potentially an additional 5 percent tax personally on the organizational managers, but the IRS may also revoke tax-exempt status. Determining Whether an Activity Is Lobbying Lobbying is activity directed toward influencing legislation. 6 Legislation includes action with respect to any Act, bill, resolution, or similar item (including a proposed treaty required to be submitted by the President to the Senate for its advice and consent) by the Congress, any 6 26 U.S. Code 4911(c)(1), (d).
state legislature, any local council, or similar governing body, or by the public in a referendum, ballot initiative, constitutional amendment, or similar procedure. 7 The IRS definition of lobbying therefore notably does not include efforts to influence executive rulemakings. Activities to influence legislation are divided into two categories: Direct Lobbying. An attempt to influence legislation by communicating with members or staff of a legislative body (Congress, a state legislature, or local council) or a government employee who participates in the formulation of legislation, to encourage them to introduce, support, oppose, amend, repeal, or otherwise influence legislation. The principal purpose of the communication must be to influence legislation. Telephone calls, letters, emails, and office visits to a member of Congress or his/her staff, request by a legislative committee (see below)), or publication of materials to encourage passage testimony at a public hearing (unless in response to a written of a bill are all direct lobbying communications if they: (1) refer to specific legislation; (2) reflect a view on the legislation, and (3) are addressed to a legislator, an employee of a legislative body, or any other government official participating in the formulation of legislation. 8 Grassroots Lobbying. Communicating with the general public, directly or through an organization s members, to encourage public action or otherwise affect the opinions of the general public with respect to specific legislation is grassroots lobbying. For example, sending letters to a Senator s constituents requesting that they urge the Senator to oppose a piece of legislation is grassroots lobbying if the letters: (1) refer to specific legislation; (2) reflect a view on the legislation; and (3) encourages the recipient of the communication to take action with respect to the legislation (e.g., a call to action encouraging recipients to contact legislators, or a 7 26 U.S. Code 4911(e)(2); 26 C.F.R 56.4911-2(d)(1)(i). 8 26 C.F.R 56.4911-2(b)(1).
message providing a legislator s name, address and phone number or providing a petition or post-card to send to legislators). 9 Moreover, under IRS regulations, certain paid mass media communications (including television, radio, newspaper, and magazine advertisements) may be deemed grassroots lobbying. Under these rules, even an advertisement that does not meet the definition of grassroots lobbying will be classified as such if: (1) the communication appears within two weeks of a vote on legislation by a legislative body or committee (not a subcommittee); (2) the vote is on a highly publicized piece of legislation; and (3) the advertisement reflects a view on the general subject of the legislation and either refers to the highly publicized legislation or encourages the public to communicate with legislators on the general subject of such legislation. 10 Note that the above rule for mass media communications is a presumption that can be rebutted. An organization can rebut the presumption by demonstrating that the paid advertisement is a type of communication regularly made by the organization in the mass media without regard to the timing of legislation or that the timing of the paid advertisement was unrelated to the upcoming legislative action. The following examples derive from IRS regulations: Example 1. A pamphlet distributed by Organization A states that the President s plan for a drug-free America, which will establish a drug control program, should be passed. The pamphlet encourages readers to write or call your senators and representatives and tell them to vote for the President s plan. No legislative proposal formally bears the name President s plan for a drug-free America, but that and similar terms have been widely used in connection with specific legislation pending in Congress that was initially proposed by the President. Thus, the advertisement refers to specific legislation, reflects a view on the legislation, and encourages readers to take action with respect to the legislation. The pamphlet is a grassroots lobbying communication. 9 26 C.F.R 56.4911-2(b)(2). 10 26 C.F.R 56.4911-2(b)(5).
Example 2. Organization B places an advertisement in the local newspaper encouraging readers to get involved in the fight against drugs. The text states, in the course of a discussion of several current drug issues, that Organization B supports a specific bill before Congress that would establish an expanded drug control program. The bill has been receiving frequent coverage in the news, but is not scheduled for a committee or floor vote for another month. The advertisement does not encourage readers to communicate with legislators about the bill (such as by including the names of undecided or opposed legislators). Without such a call to action, the advertisement is not a lobbying communication. Example 3. Assume the same facts as in Example 2, except that the advertisement appears the week of the full committee vote on the bill. Under these facts, the advertisement would be presumed to be a grassroots lobbying communication, under the special provision regarding paid mass media advertisements about highly publicized legislation within two weeks of a vote. What Counts: Preparation and Allocation Rules All costs associated with putting out lobbying communications are considered lobbying expenditures. These include amounts paid or incurred as current or deferred compensation for an employee s services attributable to the lobbying communication as well as preparation costs, such as those for research, drafting, staff and overhead, in addition to mailing, copying and distribution. If a communication is made purely for lobbying purposes, all costs of that communication are lobbying expenditures. If a communication has both a lobbying and non-lobbying purpose, however, certain costs can be allocated as not being lobbying expenditures. 11 For example, lobbying expenditures for a communication that also has a bona fide non-lobbying purpose must include all costs attributable to those parts of the communication that are on the same specific subject as the lobbying message. However, any costs attributable to those parts of the communication that are not on the same specific subject as the lobbying message are not included as lobbying expenditures. Determining whether a portion of a communication is on the same subject as the lobbying message within that communication will require a review of the surrounding facts and circumstances. Generally speaking, a portion of a communication is on the same specific subject as the lobbying message within that communication if the portion discusses an activity or specific issue that would be directly affected by the specific legislation targeted by the 11 26 C.F.R 56.4911-3.
lobbying message or if the portion discusses background or consequences of an activity or specific issue affected by the legislation. Communications made only or primarily to members require that an organization make a reasonable allocation between the amount expended for the lobbying purpose and the amount expended for the non-lobbying purpose. Costs may also have to be allocated between direct lobbying and grassroots lobbying expenses. Under certain limited circumstances, the costs of advocacy communications or research materials used initially for non-lobbying purposes and subsequently (within six months) for grassroots lobbying may be recharacterized as all grassroots lobbying expenditures. The primary purpose of the materials is critical to this determination. 12 What Is Not Lobbying? There are some activities that may be related to the legislative process but that are not considered lobbying. Consequently, expenditures for these activities need not be allocated as lobbying expenses, and a 501(c)(3) organization may engage in these activities freely. Nonpartisan Analysis, Studies, or Research. Engaging in non-partisan analysis, study or research and making available to the general public, or a segment or members of the general public, or to government officials or employees the results of such work does not constitute either direct lobbying or grassroots lobbying under IRS rules. The following guidelines apply to the preparation of these materials: o The materials must give a sufficiently full and fair exposition of the pertinent facts to enable the public or an individual to form an independent opinion or conclusion on the issue. o The materials may refer to a specific piece of legislation and state the organization s point of view on the legislation, as long as the materials do not merely advocate the organization s position and provide sufficient information for the public or an individual for form an independent conclusion. o The materials may not directly encourage recipients to take action with respect to legislation. They may, however, identify one or several legislators who oppose or are undecided about the communication s view on legislation or who serve as a member of the committee considering the legislation. 13 12 26 C.F.R 56.4911-2(b)(2)(v). 13 26 U.S. Code 4911(d)(2)(A); 26 C.F.R 56.4911-2(c)(1).
Technical Advice. A communication is not a lobbying communication if the communication provides technical advice or assistance to a governmental body, a governmental committee, or a subdivision of either in response to a written request by the body, committee, or subdivision. 14 Self-defense Lobbying. The costs of communications with any legislative body respect to legislation that has a potential effect on the existence of the organization, its powers and duties, tax-exempt status, or deductibility of contributions to the organization are not lobbying expenses. This is not a broad exception; for example, it would not include lobbying on future funding for one of the charity s programs. Under this exception, an organization may communicate with an entire legislative body, with committees or subcommittees of a legislative body, with individual legislators, with legislative staff members, or with representatives of the executive branch who are involved with the legislative process, so long as the communication is limited to the appropriate subject. 15 Member Communications. Communications to bona fide members with respect to legislation or proposed legislation of direct interest to the organization and its members do not constitute lobbying so long as there is no request to take some action to influence the legislation. A member is an individual who pays dues or contributes more than nominal amounts of time or money, or is one of a limited number of honorary or life members. 16 Examinations of broad social, economic, and other problems. Communications qualify under this exception so long as they do not address specific legislation or directly encourage recipients to take action with respect to legislation. Examinations of broad issues include discussions of general issues that may be the subject of legislation but do not mention specific legislation. 17 Communications with government officials about administrative procedures, regulations, and enforcement. Once a bill is passed, an organization may want to ensure that adequate regulations are drafted to implement and enforce the legislation. Working with executive branch staff during the regulatory process and later to monitor enforcement of the legislation is not lobbying activity. 18 14 26 U.S. Code 4911(d)(2)(B); 26 C.F.R 56.4911-2(c)(3). 15 26 U.S. Code 4911(d)(2)(C); 26 C.F.R 56.4911-2(c)(4). 16 26 U.S. Code 4911(d)(2)(D); 26 C.F.R 56.4911-5. 17 26 C.F.R 56.4911-2(c)(2). 18 26 C.F.R 56.4911-2(b)(4)(i), Example 4.
Training Workshops. Educational training to encourage a greater interest and understanding of governmental affairs would not constitute lobbying. The workshops may cover a wide variety of topics including, but not limited to, general issue briefings, lobbying techniques such as letter-writing campaigns and use of the media, and the legislative process. Public officials may be invited to speak as part of the program, but the workshop may not focus on a future lobbying campaign on specific legislation. Volunteer Lobbying. As long as they are not reimbursed, officers, members and other volunteers of an organization may lobby at their own expense. Their costs associated with these activities are not considered lobbying expenditures of the organization. If the organization recruits the volunteers and urges them to take some action, such as circulating petitions to send to legislators in support of legislation, the related costs and any training expenses incurred by the organization are grassroots lobbying expenses. A volunteer lobbyist s out-of-pocket are not tax-deductible as contributions to the organization or as out-of-pocket costs of volunteer activity. The regulations provide the following example: Organization V trains volunteers to go door-to-door to seek signatures for petitions to be sent to legislators in favor of a specific bill. The volunteers are wholly unreimbursed for their time and expenses. The volunteers costs are not lobbying or exempt purpose expenditures made by V. When V asks the volunteers to contact others and urge them to sign the petitions, V encourages those volunteers to take action in favor of a specific bill. Accordingly, V s costs of soliciting the volunteers help and its costs of training the volunteers are grass roots expenditures. In addition, the costs of preparing, copying, distributing, etc. the petitions (and any other materials on the same specific subject used in the door-to-door signature gathering effort) are grass roots expenditures. 19 Affiliated Organizations: Determining Permissible Lobbying Expenditures The IRS, in an effort to discourage use of multiple 501(c)(3) organizations to circumvent the lobbying limits, calculates expenditures of all affiliated 501(c)(3) organizations as a single unit. 19 26 C.F.R 56.4911-2(b)(4)(ii)(C), Example 8.
Organizations are considered affiliated if: they have interlocking directorates in which one governing board has sufficient control over one or more other organizations to dictate action on legislative issues, or the governing instrument, such as the bylaws, gives the organization power to bind one or more other organizations to a particular action on a legislative issue. 20 Transfers to Non-Charities The rules also attempt to prevent 501(c)(3) organizations from circumventing the expenditure limits by transferring funds to an organization that is not exempt under Section 501(c)(3). A transfer to a non-charity that lobbies is considered a lobbying expenditure unless: the 501(c)(3) organization is paying fair market value for goods or services; the 501(c)(3) organization is making a controlled grant by limiting the use of the transferred funds for a non-lobbying purpose (records must establish the non-lobbying purpose and, therefore, a grant agreement is advisable); or the 501(c)(3) organization generally makes goods or services widely available for less than fair market value to the general public and the goods and services are offered to lobbying organizations on the same terms. 21 The Byrd Amendment and OMB Regulations The Byrd Amendment prohibits the use of appropriated funds by any recipient of a Federal contract, grant, loan, or cooperative agreement [including contractors, subcontractors, and subgrantees] to pay any person for influencing or attempting to influence any officer or employee of any Federal agency or a Member or employee of Congress in connection with: (A) the awarding of any Federal contract; (B) the making of any Federal grant; 20 26 U.S. Code 4911(f); 26 C.F.R 56.4911-7 56.4911-9. 21 26 C.F.R 56.4911-3(c)(3).
(C) (D) (E) the making of any Federal loan; the entering into of any cooperative agreement; or the extension, continuation, renewal, amendment, or modification of any of the above. 22 A recipient of a Federal contract, grant, loan, or cooperative agreement must file a declaration stating the name of any registered lobbyist (under the Lobbying Disclosure Act) who has made lobbying contacts on behalf of the recipient with respect to that contract, grant, loan, or cooperative agreement as well as a certification that the recipient has not made, and will not make, any prohibited payment of appropriated funds for a lobbying purpose. 23 This declaration must be updated on a quarterly basis, if there is any material change in the information previously submitted. 24 Subcontractors and subgrantees must file similar declarations with the principal contractors and grantees, who must then forward those declarations with their own to the Government. 25 These reporting requirements only apply to contracts, grants and cooperative agreements that exceed $100,000. 26 The Office of Management and Budget ( OMB ) has promulgated extensive guidance on the ban on using federally appropriated funds for lobbying activities, and many agencies have issued their own implementing regulations as well. Rules on Political Activity A 501(c)(3) organization is strictly forbidden from engaging in any political activity on behalf of or in opposition to a candidate for public office. Violation of this prohibition may result in revocation of tax-exempt status and imposition of excise tax on both the organization and the organization s managers. A very brief summary of some of the rules that may be most relevant to the Children s Hospital Association 27 follows. 22 31 U.S.C. 1352(a). 23 31 U.S.C. 1352(b). 24 31 U.S.C. 1352(b)(4). 25 31 U.S.C. 1352(b)(1), (5). 26 31 U.S.C. 1352(d)(2)(B). 27 The Children s Hospital Association s legal name is the National Association of Children s Hospitals.
Determining What Is Political Activity Political activity is participation or intervention in any election campaign in support of or in opposition to a candidate for local, state, or national public office. Determining whether a proposed activity is a political activity is often difficult, but certain activities are clearly prohibited: Formal or informal endorsements of a candidate for public office; Direct financial contributions or other support to a candidate, political party, or political action committee ( PAC ); In-kind contributions to a candidate, political party, or PAC, including, but not limited to: (1) providing mailing, membership or donor lists or other resources for fundraising; (2) provision of facilities or office space; (3) staff time; (4) organizing volunteers for a campaign; and (5) opposition research; Publication or distribution by a 501(c)(3) organization of statements in support of or in opposition to a candidate; or Rating candidates for their qualification for a particular office. This list is by no means exhaustive. Permissible Voter Education and Registration Activities Nonpartisan voter education and registration activities are not prohibited and provide valuable contributions to public understanding of and debate about key issues. Voter education projects may not be designed to support or oppose any particular candidate, may not be coordinated with a candidate or party, and should expressly disclaim any intent to endorse or oppose any candidate. It is clear from IRS rulings that a program that is largely educational in nature may be deemed impermissible political activity if even only one part of the activity is political. Therefore, consultation with an attorney familiar with the laws governing tax-exempt organizations is advised. Some of the activities that non-profit organizations may conduct, if properly planned, include:
publishing voting records; preparing candidate questionnaires and voter guides; conducting public education on issues of import to the organization; hosting nonpartisan candidate forums; conducting training on the electoral process; or conducting issue briefings for candidates. Note that an issue briefing directed towards an officeholder and addressing specific legislation may be considered direct lobbying. Volunteer Activities Individual Volunteers: What May Officials, Staff and Volunteers Do That a 501(c)(3) Organization Cannot? The proscription on political activity by a 501(c)(3) organization does not cover the involvement of staff, directors, or member volunteers in the electoral process during after-work hours, leave without pay, or accrued vacation. The Federal Election Campaign Act ( FECA ) makes various allowances for volunteer activity that are not subject to or limited by the political contribution limits. A volunteer for purposes of the law is a person who donates personal services and is not compensated for them by any other person, including an organization. Compensation includes salary and benefits. The time devoted by the volunteer is truly his or her own, and there is no limit to how much time he or she can commit to the benefit of any candidate, political party, or political committee. The law makes other allowances for volunteer activities that involve specific expenditures by the volunteer of his or her own funds (e.g., for certain travel expenses incurred while volunteering for a campaign). Note, however, that if volunteers coordinate their spending on activity for a federal candidate, they may be considered a political committee under the FECA, subject to registration and reporting requirements as well as applicable contribution limits. Guidelines for Officials of an Organization. An official, acting on his or her own behalf, may participate in a campaign in support of or in opposition to a candidate. However, the official must not speak or act in the name of the organization while engaged in political activity and he or she may not use organizational resources, personnel or facilities for the activity. Within
these constraints, an individual may participate in any campaign activities, including endorsing or opposing a candidate, holding a fundraiser, or hosting a campaign gathering. Guidelines for Other Individuals Associated With an Organization. The individual members and employees of an organization also may participate in political campaign activity so long as the activities are not conducted with organizational resources. The factors that the IRS will look at to determine whether to attribute these acts to the organization are slightly different than those for officials. There must be real or apparent authorization by the organization of these individuals actions to cause them to be considered attributable. Activities of employees during working hours or in their capacity as employees generally will be attributed to the organization. If the activities are implicitly authorized by the organization, they will be attributed. Activities may be considered authorized if an organization does not disavow the individual s actions in a timely manner and in a manner consistent with the original activity. The political activities of individual members were ruled to be attributable to the organization when the organization s publication announced that members would be working in a candidate s campaign, the members were identified as representatives of the organization and there was no attempt by the organization to disavow their activities. The organization must also take steps to avoid future unauthorized activities. Working in Coalitions Frequently, nonprofit organizations join together in coalitions to sponsor events, coordinate activities, or simply exchange information about programs and agendas. A 501(c)(3) organization is free to join in informal or formal coalitions with other tax-exempt groups or forprofit organizations, so long as the coalition is created for an educational or other charitable purpose and not engaged in any partisan electoral activities. Participation in a coalition to exchange non-electoral information or sponsor educational programs on issues of interest to the groups is permissible. Informal Coalitions: Joint Sponsorship of Activities A 501(c)(3) organization may join other organizations in sponsoring certain voter education activities, including training conferences. However, the program may not have any partisan content that could be attributed to the 501(c)(3) organization. A 501(c)(3) organization should
avoid joint sponsorship of candidate forums, debates, voter registration, GOTV or other campaign-related events with a partisan organization. In addition, public education documents jointly supported and published by 501(c)(3) organizations and PACs are inadvisable. Working in Formal Coalitions A 501(c)(3) organization is free to participate in and contribute financial support to a formal coalition organized for educational purposes, including development of nonpartisan voter education programs, and conducted in a manner consistent with the legal guidelines already discussed. A 501(c)(3) organization may not join in or have any formal relationship with a coalition whose purpose is to conduct partisan electoral activities. Clearly, a 501(c)(3) organization cannot do indirectly through a coalition what it could not do directly, e.g., conduct substantial lobbying or political activity.