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What is Lobbying?
Federal tax law controls how much lobbying 501(c)(3) organizations can engage in. Publiccharities can choose to measure their lobbying under either the insubstantial part test orthe 501 (h) expenditure test. While lobbying is not defined under the insubstantial part test,this fact sheet provides an overview of how lobbying is defined for organizations thatmeasure their lobbying under the 501 (h) expenditure test.
Direct LobbyingCommunicationwith a Legislatorthat expresses a View about Specific Legislation
Grassroots LobbyingCommunicationwith the Publicthat expresses a View about Specific Legislationand Includes a Call to Action
In order for an actioncontain all of the aboveis missing.
Communication: amechanism to convey
officials who participathe governor or mayo
o be considered direct lobbying or grassroots lobbying it mustelements. It is not lobbying if one or more of the required elements
conversation (in person or by phone), letter, email, fax, or other creativea message.
Legislator, a member of a legislative body or his/her staff. In addition, executive branche in the formulation of legislation are considered legislators (such aswhen vetoing or signing a bill). Members of administrative bodies,
however, such as schDOl boards, sewer and water districts, housing authorities, zoningboards, and other special purposes bodies, whether elected or appointed, are not consideredlegislators.
Public: anyone but aorganization's membesomeone who has giv
egislator or member of an organization. Communications to anrs are considered direct lobbying. For this purpose, a member isn more than a small amount of time or money to the organization.
Expresses a viewin a legislative body oispecific solution to thetaxes, and attempts toProposed legislationbeen written down, orrulemakings /existing laws.
Call to action: a spelobbying action. A cal
about specific legislation: a bill or resolution that has been introducedproposed legislation such as identifying a problem and presenting a aproblem. Specific legislation includes budget appropriations andinfluence the confirmation of judicial and executive branch nominees.
n|iay qualify as specific legislation even if it has not yet been introduced,even fully fleshed out. Specific legislation does not include
promulgation of regulations, executive orders, litigation, or attempts to enforce
ific means of encouraging the communication's recipient to taketo action must comprise one of the following actions: 1) tell the
recipient to contact ahis/her legislator, suchfor enabling the recipientor 4) identify a legislatorabout the organizatiopvote on the legislation,
l^gi^lator; 2) provide information on how the recipient can contactas providing the phone number or address; 3) provide a mechanism
o contact his legislator, such as a postcard, petition, or email form;
s vho will vote on the legislation as being opposed to or undecidedew on the legislation, a member of a legislative committee who will
or^he recipient's legislator.
activityBallot measurereferenda, bondfor or against them aifeEfforts aimed at convinlobbying since the voting
s considered direct lobbying. Although ballot measures, such asand ballot initiatives, are determined at the voting booth, efforts
considered direct lobbying, not impermissible electoral activity,cinb the public to support or oppose ballot measures are direct
(public serves as the legislature.
February 2007
lin :hisThe information containedand not as part of an attorrieV-clprofessional advice tailoredavoiding any penalties thatplain-language guides on fi4np||ofitadvocacy of nonprofits, ainformation, please feel fre^ t£> contact the Alliance for Justice.
:act sheet and any attachments is being provided for informational purposes only
tomay
ent relationship. The information is not a substitute for expert legal, tax, or otherour specific circumstances, and may not be relied upon for the purposes ofe imposed under the Internal Revenue Code. The Alliance for Justice publishes
advocacy topics, offers educational workshops on the laws governing the/ides technical assistance for nonprofits engaging in advocacy. For additional
2003611 Dupont Circle,Washington, D.C.Phone: 202-822-6070Fax: 202-822-606
N.V 2nd FloorALLIANCEJOST,CE
www.allianceforjustice.orgadvocacy@afj.org
866-NPLOBBY
519 17th Street, Suite 560Oakland, CA 94612
Phone:510-444-6070Fax:510-444-6078
ALLIANCE]t3STICE
Most 501 (c)(3) public charit fesgovern lobbying under 501 (h) a
Step 1 - Complete Form 5768
ecting the 501 (h) Expenditure Test
benefit from "electing" the 501 (h) lobbying expenditure test. The rules thate clearer than those that apply under the "insubstantial" standard.
IRS Form 5768. ElectExpenditures To Influence LegAn organization simply supplie;The form needs to be signeretroactively to the first day ift
De2006 forward (assuming the orFor example, a form filed in
Step 2 - Make a CopyMake a copy of Form 5768 ef
Step 3 - Track Lobbying ExpUnder 501 (h), your organizstiolobbying. Direct lobbying is delegislation. Organizations with
in/Revocation of Election by an Eligible Section 501 (c) (3) Organization To Make>lation, is the first step in electing to be governed by the 501 (h) expenditure test,its name, address, and the first tax year to which it wants the election to apply,an authorized officer, usually the president or treasurer. The election appliese fiscal year in which the form is filed and, generally, to all subsequent years,ember 2006 will bring an organization under section 501 (h) from January 1,anization operates under the calendar year).
re mailing it to the IRS because the agency will NOT send a confirmation letter.
nditurescan spend up to 20% of its first $500,000 exempt purpose budget on direct
ned as any communication, with a legislator, expressing a view about specificudget expenditures over $500,000 should apply the following formula:
20% of the first $500,000+ 15% of the next $500,000+ 10% of the next $500,000
+ 5% of the remaining= the overall lobbying limit
public
Grassroots lobbying is deabout specific legislationorganization asks thelegislators of staffers; (2)information for the legistspostcard, petition, letter,recipient's legislator, theorganization's view on thspend more than 25% of
in d as any communication with the general public, expressing a viewwi h a call to action. A call to action refers to four different ways the
o respond to its message: (1) asking the publjc to contact theirtiding the address, phone number, websiteToTother contact
or ; (3) providing a mechanism toeojjtact legislators such as a tear offr e mail link to send a message cficecth^to the legislators; or (4) listing thear les of legislators voting on a bill, or those undecided or opposed tok gislation. An organization that has made the 501 (h) election can never
he r overall lobbying limit on grassroots lobbying.
Therefore, a 501(c)(3), thathave an overall lobbying m
as made the 501 (h) election, with an annual budget of $500,000, wouldof $100,000 and a grassroots lobbying limit of $25,000.
All public charities, includin990 Form and in the event <
5( 1 (h) electing charities need to keep track of their lobbying expenditures for theirf a IRS audit.
Note: To revoke;Form 5768 (question 2).
your organize ion's 501 (h) election, follow steps 1 and 2, filling out the revocation portion of
The information contained in thand not as part of an attorney-'professional advice tailored o yany penalties that may be mplanguage guides on nonproft a<
fact sheet and any attachments is being provided for informational purposes onlylent relationship. The information is not a substitute for expert legal, tax, or otherur specific circumstances, and may not be relied upon for the purposes of avoidingsed under the Internal Revenue Code. The Alliance for Justice publishes plain-vocacy topics, offers educational workshops on the laws governing the advocacy of
nonprofits, and provides technicfeel free to contact the Alliance f
il assistance for nonprofits engaging in advocacy. For additional information, pleaseir Justice.
11 Dupont Circle, N.W.,Washington, D.C. 2003!Phone: 202-822-6070Fax: 202-822-6068
2nd Floor1
www.allianceforjustice.orgadvocacy@afj.org
866-NPLOBBY
519 17th Street, Suite 560Oakland, CA 94612
Phone:510-444-6070Fax:510-444-6078
^ 5768 El(Rev. December 2004)
Department of th« TreasuryInternal Revenue Service
Name of organization
Number and street (or P.O. box no.
City, town or post office, and Btate
1 Election — As an eligibleexpenditures to Influenceall subsequent tax years
Note: This election must
2 Revocation — As an eltgllrelating to expenditures t
Note: This revocation mi
Under penalties of perjury, |on behalf of the above nam<
(Signature of offic
ction/Revocation of Election by an EligibleSection 5Ol(c)(3) Organization To Make
Expenditures To Influence Legislation(Under Section 5O1(h) of the Internal Revenue Code)
mail Is not delivered to street address)
For IRSUse Only Employer identification number
Room/suit©
ZIP + 4
organization, we hereby elect to have the provisions of section 501 (h) of the Code,eglslatlon, apply to our tax year ending . . .. .-ntil revoked. (Month, day. and year)
e signed and posrmaritecf within the first taxable year to which It applies.
e organization, we hereby revoke our election to have the provisions of section 501 (h) ofInfluence legislation, apply to our tax year ending . . . .
(Month, day. and year')if be signed and postmarked before the first day of the tax year to which It applies.
declare that 1 arn authorized to make this (check applicable box) 1 1 election Qd organization.
relating toand
the Code,
revocation
sr or trustee) (Type cr print name and title) (Date)
General InstructiSection references are to thRevenue Code.Section 501 (c)(3) states thaorganization exempt underwill fose Its tax-exempt statqualification to receive deducharitable contributions If apart of Its activities are carrlinfluence legislation. Sectiohowever, permits certain el501 (c)(3) organizations to ellimited expenditures to lnflu<legislation. An organizationelection will, however, be sexcise tax under section 49spends more than tha amopermitted by that section. Alorganization may lose Its exIf Its lobbying expenditurespermitted amounts by moreover a 4-year period. For an;which an election under seIn effect, an electing organlzreport the actual andof Its lobbying expendituresroots expenditures (as defi4911(c)) on Its annual returnunder section 6033. Sea Se(Form 990 or Form 990-EZ)electing member of an afflllmust report these amountsand the affiliated group as
permit! )d
nsInternal
inat sectionand Its
tlbleubstantlalid on to501(h),ble1 to makece
laklng theect to anif It
tso, thempt statusceed the
han 50%tax year In
on 501 (h) Istion must
amountsnd grassd In sectionsquired9dule A:ached groupr both Itself
To make or revoke the election, enterthe ending date of the tax year to whichthe election or revocation applies In Item1 or 2, as applicable, and sign and datethe form In the spaces provided.Eligible Organizations.—A section501(c)(3) organization Is permitted tomake the election if It Is not adisqualified organization (see below) andIs described In:1. Section 170(b)(1)(A)(ii) {relating to
educational Institutions),2. Section 170(b)(1)(A)(IH) (relating to
hospitals and medical researchorganizations!.
3. Section 170(b)(l)(A)(lv) (relating toorganizations supporting governmentschools),
4. Section 170(b)(1)(A)(vl) (relating toorganizations publicly supported bycharitable contributions),
5. Section 509(a)(2) (relating toorganizations publicly supported byadmissions, sales, etc.), or
6. Section 509(a)(3) (relating toorganizations supporting certain typesof public charities other than thosesection 509(a)(3) organizations thatsupport section 501(0) (4). (5), or (6)organizations).
Disqualified Organizations.—Thefollowing types of organizations are notpermitted to make the election:a. Section 170(b)(1)(A)(l) organizations
(relating to churches).
b. An integrated auxiliary of a church orof a convention or association ofchurches, or
c. A member of an affiliated group oforganizations If one or more membersof such group Is described In a or bof this paragraph.
Af f III a ted Orga nlza tl ons.—Org an Izat Ionsare members of an affiliated group oforganizations only If (1) the governinginstrument of one such organizationrequires It to be bound by the decisionsof the other organization on legislativeIssues, or (2) the governing board of onesuch organization Includes persons (I)who are specifically designatedrepresentatives of another suchorganization or are members of thegoverning board, officers, or paidexecutive staff members of such otherorganization, and (II) who, by aggregatingtheir votes, have sufficient voting powerto cause or prevent action on legislativeIssues by the first such organization.
For more details, see section 4911and section 501 (h).Note: A private foundation (Including aprivate operating foundation) Is not aneligible organization.Where To File.—Mall Form 5768 to theInternal Revenue Service Center, Ogden,UT 84201-0027.
Cat. No. 12125M Form 5768 (Rev. 12-2004)
1o/;Michigan Nonprofit Association
Advocacy lil:What You Must Know About
Nonprofit AdvocacySEPTEMBER 21, 2fl§
Nonprofit Day 2«1«: Leading for ChangeLANSING, MI
The question is not
'Should we d® advocacy?"
but
"Can we afford not to?"
What is ADVOCACY?
Avenues of Change:Common Targets
Organizing
EducateLegislators
•v X
' ^Get to KnowLegislators
PublicEducation
PARTISANPOLITICAL
EducationalConferences
Research
NonpartisanVoter Ed.
LobbyingExceptions
LOBBYING
Training
Organizea Rally
RegulatoryEfforts
Litigation
Avenues for ADVOCACY
NATIONAL PREACH-INON GLOBAL WARMING
IV
Factors Affecting Success
Why ADVOCACY?
VICTORY! Lilly Ledbetter Fair Pay Act PassesSenate and House!VICTORY! It's been a long road to pass the Lilly Ledbetter Fair Pay Act, and now we'renearly there! On January 22,2009, the US Senate passed the Lilly Ledbetter Fair PayAct, joining the House of Representatives. President Obama has spoken out in supportof the Ledbetter Fair Pay Act and is expected to sign the Act into law very soon.
The Voices of Moms Helped Reach This Important victory: MomsRising respondedimmediately when the Court made its harmful decision In the Leaoetter v. GoodyearTyres case in P-lay of 2007 stating that pay discrimination claims must be made within180 days after the pay Is initially set (which effectively gutted the ability to holdemployers accountable when they pay women less than men-even if the discriminationcontinues for years). Since then, MomsRIsing members have been deeply andconsistently active in the fight to restore and improve pay equity laws.
Your persistence paid off. By the numbers, here is what you accomplished
Letters to Legislators: A whopping 84,557 Letters to the U.S. Senate and House infavor of this legislation.
Resumes: MomsRising members sent In and delivered nearly 9,000 resumes toSenator John McCain's office after he refused to support this legislation, saying thatwomen don't need fair pay, they need "more education and training."
Systemic CHANGE
for Passing SCHIP and StandingUp for America's Values
PROTECT funding
BUM TOYDH1TB FOR
Foster DISCUSSION
mW iilP
* •ii "*I'*' '
M ' * , jr»Jft ft
EMPOWER Constituents
Foster DISCUSSION
EMPOWER Constituents
How much LOBBYING?
INSUBSTANTIAL PART TEST
T7] What is "insubstantial"?
~27] Default test
~37[ Activities-based
4. Lobbying not defined
~57[ Penalty
or501(H) EXPENDITURE TEST
Dollar-based limits
One-time election - IRS Form 5768
3. Expenditures only
4. Definition of lobbying
Penalty less severe
Direct-Communication-With a legislator- Expressing a view
about specific legislationGrassroots
-Communication-With the general public- Expressing a view
about specific legislation-Includes a "call to action'
What is LOBBYING?
Specific Legislation
30/60 Day NoticeHB 2484
Protect current state funding for key programs, such a
Talking Points
WeVe developed a set of key messages that you canincorporate into your letters. One tip Is to keep your letter short,concise and make It personal by giving an example of how theshortage of affordable housing has impacted you, yourcommunity or someone you know.
• Everyone needs housing—a roof over theirhead.• Affordable housing is good for the economy—it helps
people get jobs and keep them.- Your grandparents and other seniors shouldn't have to
worry about having a place to live.
* Without enough affordable housing, the whole communitysuffers.
m • •*" j Businesses can!find enough employees wno can affordIII If ACT in I)HI* HifiC toliveneartheirworkplace.ltisdifficulttorecruitand•HYO91111 uui niua retalnemptoveeswh^n,hereisashortageoraftordabie
housing.Homelessness forces children into unstable anduncertain lives. With a stable home, a child is able tofocus on learning without worrying about moving duringthe school year.Seniors and persons with special needs on fixed incomesmay have to sacrifice their basic needs in order to affordrent. Imagine choosing between food and a roof over yourhead.
* Investing dollars and other resources in nonprofits is aninvestment in stable neighborhoods, which hElps promoteself-sufficiency. The pay-off is more productive people whoare less dependent upon remedial and governmentassistance.
Strengthen our Schools
The Emergency Food Assistance Program (EFAP)$393,000 to support the General Administration Food Programs that leverage miUiofederal funding, food, and operational supportState contributions to WIC and for the WIC Farmers Market Nutrition ProgramWashington Grown Fruits and Veggies Grant initiated by Local Farms Health KidsState funding that insures access to school, summer, and child care meals
Leaving off a call to actionCommenting on rules and regulationsLitigationAsking for an Executive OrderAsking for enforcement of existing laws
Not LOBBYING
Nonpartisan analysis, study, or research•Technical advice or assistance•Self defense•Examinations and discussions of broadsocial, economic, or similar problems
Lobbying EXCEPTIONS
WEST COASTAlliance For Justice
1611 Telegraph AvenueSuite 1006
Oakland, CA 94612510-444-6070
EAST COASTAlliance for Justice11 Dupont Circle, NW2nd FloorWashington, DC 20036202-822-6070
forf; let
dvocacy@afj.orc866.675.6229www.afj.org \s and publications
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