Introduction to Advocacy and Public Policy Presenter INSERT NAME INSERT ORGANIZATION NAME

Introduction to Advocacy and Public

Policy

PresenterINSERT NAME

INSERT ORGANIZATION NAME

Agenda for Session

Setting the stage for nonprofit advocacy as a best practice in the Standards for Excellence: An Ethics and Accountability Code for the Nonprofit Sector®

Lobbying vs. advocacy Developing an advocacy policy Allowable lobbying activity

Federal, state, and local rules Remaining nonpartisan Accurate reporting on state disclosure reports

and Form 990

The Standards for Excellence® Code 8 Principles & 55 Standards

Mission and Program Governing Body Conflict of Interest Human Resources Financial & Legal Openness Fundraising Public Policy & Public Affairs

The Standards for Excellence® Code A blueprint for well managed and responsibly

governed nonprofit organizations

The Standards for Excellence® Code Educational resources to help you build a

stronger, more attractive and sustainable nonprofit institution.

Is lobbying even permitted for nonprofits? There is a myth out there that nonprofit

organizations are prohibited from lobbying elected officials. This is simply not true.

Nonprofit organizations often exist to serve the underserved. Nonprofits provide a voice and can truly help educate and advocate for those they serve.

Lobbying vs. Advocacy

What is the difference between advocacy and lobbying?

Nonprofit leaders often confuse these terms. Advocacy is defined as active support for a

cause, idea or policy. Lobbying generally consists of

communications that are intended to influence specific legislation

Advocacy vs. Lobbying

Public Education

Media and Messaging Campaigns

Litigation

Organizing Activities

Protests & Marches

Normally Defined by Statute

State and Local Laws May Vary From IRC Provisions

Usual Key Elements: Communication, Subject Matter & Money

Developing an Advocacy Policy

Planning considerations:

1 - What are the criteria or factors that determine the broad interest/ issue areas where your organization may become involved in policy advocacy?

2 – Who needs to be involved in making these decisions?

3 – How will this process be accountable to the Board?

4- How often do you need to consider positions on issues?


Additional considerations:

1 – Mission:

Is the issue related to the organization’s ability to meet its mission?

2 – Impact:

Are there aspects of the issue that affect the interests of the nonprofit organization (and/or its clients) in a significantly different way than the interests of the community at large?



3 – Consensus:

Is there, or do you reasonably anticipate that there will be, at least a general consensus among the members or constituents of the organizations on the position to be taken?

4 – Credibility:

Would your organization be perceived as a legitimately concerned and appropriate advocate for the position to be taken?



5 – Flexibility:

Will the policy provide flexibility for a subset of the government relations or public policy committee to make decisions and/or speak on behalf of the whole group when time or circumstances do not permit additional process.

Sample Advocacy Policy #1

1 - Each year (Every two years, every five years), the ABC Nonprofit Public Policy Committee will survey the membership of the organization to develop a list of suggested public policy priorities for the upcoming year. Based on this input and input from ABC’s Board of Directors, the Public Policy Committee decides priority issues, and ranks such issues in order of importance.


2 - The priority issues serve to establish the public policy framework. The board of directors must approve the public policy framework.

3 - All advocacy activities for [the selected time frame] should fall under the current priority issues.


4 - In circumstances where immediate public policy attention is required, the chair of the public policy committee, and the Executive Committee may make decisions on behalf of the entire Public Policy Committee for ABC Nonprofit on specific bills and issues.

5 - Only the board president, the executive director, and the chair of the public policy or government relations committee may speak on behalf of ABC Nonprofit or take action on local, state, or federal public policy issues.


6 - ABC Nonprofit is a nonprofit organization. As such, ABC Nonprofit does not support or oppose candidates for public office or political parties and only acts on issues related to the organization’s mission and its current public policy framework.


I. General statement In order to work toward making systematic

change necessary to achieving our mission, ABC Nonprofit engages in advocacy activity or active support for a cause, idea, or policy. It is the policy of ABC Nonprofit to advocate on public policy issues that support the mission of the organization, such as: x, y, and z.


II. Criteria for Public Policy Positions ABC Nonprofit may take positions on public

policy issues, which fulfill three basic criteria: Affects ABC Nonprofits’ ability to work toward its

mission OR Affects ABC Nonprofits’ clients or program participants OR Affects the nonprofit status or operations of ABC Nonprofit


III. Process for determining positions CHOOSE ONE: (1) Advocacy positions on specific issues will be

determined on a case by case basis by consensus of the (executive committee of the) board. OR

(2) Advocacy positions on specific issues related to the mission of ABC Nonprofit will be determined by the executive director, and in his/her absence, may be determined by the deputy director. OR


(3) As delegated by the ABC Board of Directors, ABC Nonprofit’s Public Policy Committee assesses issues of potential interest and concern to determine if such issues should become subjects for advocacy for the organization. The Public Policy Committee may delegate its decision-making authority to a designated staff person. OR

(4) Each year, ABC Nonprofit surveys its members and clients on a series of potential public policy issues for which it may become involved. Based on results of surveys, related research and comments from members, clients, and staff, ABC’s Board/Staff/Public Policy Committee determine advocacy positions for the year.


IV. Concerning participation on coalitions (1) In ABC Nonprofit’s work with coalitions and

associations, ABC Nonprofit may take part in the advocacy work of a group provided the work is not in conflict with ABC Nonprofit’s mission.

(2) ABC Nonprofit conducts its advocacy work through coalitions and networks such as: X, Y, and Z.

.


V. ABC Nonprofit is nonpartisan in its activities.

Clients of ABC Nonprofit represent a broad cross-section of the political spectrum. ABC Nonprofit does not support one candidate over another candidate; and does not support any political parties. Maryland Nonprofits works with both political parties in legislative efforts. If we ask one candidate for office to speak at events or conferences, an invitation is extended to any opposing candidates as well.

.

ABC Nonprofit does not pursue public policy advocacy as part of its regular program activities. We recognize, however, that as a leader in our field, we are occasionally (regularly) called upon by government officials, members of the media and others to offer positions on policy issues affecting the recipients of our services or to share knowledge and expertise relevant to ongoing policy deliberations. ABC Nonprofit is also called upon to sign on to formal and informal coalitions that advocate for the interests of our clients.

The Executive Director may authorize participation in such activities when s/he determines such participation is consistent with the mission of ABC Nonprofit and that the interests of the clients are sufficiently clear. Where participation is warranted, the Executive Director shall be responsible to determine the nature and extent of participation, including the positions to be stated or information to be shared.

Limited Advocacy Policy

Allowable Lobbying Activity

What is allowed under the law? Federal State Local

Allowable Lobbying ActivityFederal Lobbying Limits 2 options

Insubstantial Part Test 501(h) Election Expenditure Test

Allowable Lobbying ActivityFederal Lobbying Limits Insubstantial Part Test

26 U.S.C. § 501(c)(3); 26 C.F.R. § 1.501(c)(3)-1(b)(3)(i)

Default Test Lobbying must be an “insubstantial part” of

overall activities Include cost-free activities when determining

if substantial

Allowable Lobbying ActivityFederal Lobbying Limits 501(h) Expenditure Test

26 U.S.C. § 501(h); 26 C.F.R. §1.501(h)

Elect by one-time filing of Form 5768 Clear dollar-based limits Only expenditures count towards limits Clear definition of lobbying

Allowable Lobbying ActivityFederal Lobbying Limits 501(h) Expenditure Test

26 U.S.C. § 501(h); 26 C.F.R. §1.501(h) This step allows 501(c)(3) organizations take

advantage of the clear definitions and generous limits on lobbying that were added to the Internal Revenue Code in 1976. These rules are sometimes called “the expenditure test” Only expenditures count towards limits

Eligible organizations that make the election do so without changing their 501(c)(3) status

Allowable Lobbying ActivityFederal Lobbying Limits 501(h) Expenditure Test Making the election simply requires filing

Form 5768, “Election/Revocation of Election by an Eligible 501(c)(3) . Organizations to Make Expenditures to Influence Legislation”

Available at www.irs.gov

Allowable Lobbying ActivityFederal Lobbying Limits 501(h) Expenditure Test The single-page form calls for the

organization’s name, address, and first tax year to which it wants the election to apply. It requires only the signature of the authorized officer, usually the president or treasurer.

Allowable Lobbying ActivityFederal Lobbying Limits -501(h)

1) Calculate organization’s “Exempt Purpose Expenditures” BUDGET for most groups

2) Overall lobbying limit is:20% of first $500,000 plus

15% of next $500,000 plus

10% of next $500,000 plus

5% of the remaining expenditures

3) Grassroots lobbying limit is 25% of overall limit

$1 million cap on total lobbying expenditures

$1 million cap on total lobbying expenditures

26 C.F.R. § 56.4911-2(b)(2)

Direct Lobbying Grassroots Lobbying

Communication Communication

Legislator

Expressing a View Expressing a View

Specific Legislation Specific Legislation

General Public

Call to Action

Allowable Lobbying ActivityElements of Direct and Grassroots Lobbying

Maximum Total

Lobbying:

Grassroots

+

Direct

12.5%

Grassroots (max. ¼ of

total lobbying)

Direct Lobbying

Education & Non-Lobbying

Advocacy

Total Lobbying Amount: $250,000

Grassroots Lobbying Amount: $62,500

Total Lobbying Limits for Sample 501(c)(3) making (h) election with $2 million. budget

26 C.F.R. § 56.4911-2(d)(4)

Allowable Lobbying ActivityDefinitions of Legislators

Members of special purpose boards are NOT legislators

Planning Commissions Zoning Commissions School Boards

More than just conversations,letters, email….

Allowable Lobbying ActivityEx. of Lobbying Communications

Effects of 501(h) Election-LIMITS

501(h) Electing Sliding scale of limits on

exempt purpose expenditure: 20% of 1st $500,000

plus 15% of next $500,000

plus 10% of next $500,000

plus 5% of remaining

expenditure $1 million limit

Not Electing 501(h) Substantial lobbying using

a subjective balancing test, including: Importance of lobbying

to organization’s circumstances

Actual lobbying expenditures and activities, including volunteer

Overall spending and activity level

Effects of 501(h) Election-LIMITS

501(h) Electing No limit on volunteer

activity

Not Electing 501(h) Volunteer activities are

included in determination of activities

Source: Worry Free Lobbying for Nonprofits, Alliance for Justice, Charity Lobbying in the Public Interest

Effects of 501(h) Election-EXCLUSIONS FROM LOBBYING

501(h) Electing Responses to legislative

bodies requesting information

Nonpartisan analysis that presents all sides of an issue

Defending against direct challenges to organization’s existence

Broad examination of social issues

Not Electing 501(h) No specific exclusions


Effects of 501(h) Election-RECORD KEEPING

501(h) Electing Documentation of all

expenses, grassroots and direct

Not Electing 501(h) Documentation of all

expenses and activities that could be considered lobbying, including volunteer activities, it is advisable to document non-lobbying volunteer activities for comparison


Effects of 501(h) Election-REPORTING

501(h) Electing Report on IRS Form 990

Schedule C Part II-A Lobbying Expenditures Percentage of total

expenditures And related calculations on

ceilings, maximum thresholds

Not Electing 501(h) Report on IRS Form 990

Schedule C Part II-B Detailed description of

legislative activities, including volunteer activities

Classified schedule of expenses, paid and incurred


Effects of 501(h) Election-REVOCATION OF TAX STATUS-Standard

501(h) Electing Exceeding 150% of limits

based on a 4-year moving average

Not Electing 501(h) Substantial lobbying in any

one year


Effects of 501(h) Election-PENALTY FOR EXCESSIVE LOBBYING

501(h) Electing 25 % of excess lobbying

expenditure

Directors and officers have no exposure

Not Electing 501(h) 5% of total lobbying

expenditure if exemption is revoked

Directors and officers fined penalty of 5% lobbying expenditures if lobbying is found to be willful or unreasonable.


Effects of 501(h) Election-AUDIT

501(h) Electing The IRS Manual

specifically informs examiners that making the election will not be a basis for making an examination

Not Electing 501(h) No specific guidelines


Who Might Not Want to Elect

Large nonprofits with budgets over $17 million

Allowable Lobbying ActivityFederal Lobbying Limits

Allowable Lobbying ActivityState Lobbying Limits

See National Conference of State Legislators Catalogue of State Lobbying and Ethics Laws

http://www.ncsl.org/Default.aspx?TabId=15352

Allowable Lobbying ActivityState Lobbying Limits

Pay particular attention to: Ethics Regulations Lobbyist Regulations Gifts/conflict of interest provisions Reporting of lobbyists and organizations Disclosure of activities, finances

State Lobbying LimitsExample: Maryland

Legislative: Registration required if the person communicates in the presence of an official or employee in the legislative or executive branch for the purpose of influencing legislative action and Incurs expenses of $500 or more Earns $2,500 or more as compensation from all

lobbying employers; or The person is not in the presence of an official,

but communicates to influence legislation and earns at least $5,000 for all such communication activities during the reporting period

Grassroots: Registration required for any person, group, organization or business that expends $2,000 to influence legislation (including salaries, contractual employees, postage, etc.) during reporting period

http://ethics.gov.state.md.us

State Lobbying LimitsExample: Maryland Grassroots: Registration required for any

person, group, organization or business that expends $2,000 to influence legislation (including salaries, contractual employees, postage, etc.) during reporting period

http://ethics.gov.state.md.us

State Lobbying LimitsExample: Maryland Executive Action Lobbying:

Registration Required IF: The person communicates with any official or

employee in the executive branch for the purpose of influencing executive action during the reporting period and the person expends a cumulative amount of $100 or more during the reporting period on one or more officials or employees of the executive branch for meals, beverages, special events or gifts in connection with or for the purpose of influencing executive action.

Any executive action activity is covered by this

provision.

State Lobbying LimitsExample: Maryland Executive Action Lobbying:

The person is compensated $2,500 or more in a reporting period, from all lobbying employers cumulatively, for all such communication and activities relating to the communication or incurs expenses of $500, per lobbying employer, or more (other than for personal travel or subsistence) and gets in the presence of an official or employee for the purpose of influencing executive action relating to the development or adoption of regulations or the development or issuance of an executive order; OR

Earns at least $5,000, from all lobbying employers cumulatively, as compensation for all such communication and activities relating to the communication during the reporting period, even if not in-the-actual-presence of officials or employees for these purposes.

State Lobbying LimitsExample: Maryland Maryland Lobbyist Registration: Reporting Periods

The Lobbying registration year begins November 1 and ends October 31.

The year is divided into two reporting periods – November 1 thru April 30 & May 1 thru October 31.

Reports are required within 30 days of the end of each reporting period.

Training available from the Ethics Commission – posted on their web site.

State Lobbying LimitsExample: Delaware

"Lobbyist" means any individual who acts to promote, advocate, influence or oppose any matter pending before the General Assembly by direct communication with the General Assembly or any matter pending before a state agency by direct communication with that state agency, and who in connection therewith either:

a. Has received or is to receive compensation in whole or in part from any person; or

b. Is authorized to act as a representative of any person who has as a substantial purpose the influencing of legislative or administrative action; or

c. Expends any funds during the calendar year for the type of expenditures listed in § 5835(b) of this title.


Reportable Expenditures: (b) A lobbyist shall file separate reports for each employer which the

lobbyist represents. Each report shall contain the total expenditures during the reporting period for all direct expenditures, costs or values, whichever is greater, provided for members of the General Assembly or for employees or members of any state agency for the following:

(1) Food and refreshment; (2) Entertainment, including the cost of maintaining a hospitality room; (3) Lodging expenses away from home; (4) Fair value of travel if the trip exceeds 100 miles; (5) Recreation expenses; and (6) Gifts or contributions, excluding political contributions as defined in

Chapter 80 of Title 15 provided to members of the General Assembly. - Section 5835 (b) -


Exceptions Not Lobbying: If no reportable lobbying is made: (1) Persons performing professional services in drafting bills or regulations

or in advising and rendering opinions to clients as to the construction or effect of proposed, pending or enacted legislation or regulations who do not otherwise act as lobbyists;

(2) Persons appearing pursuant to their official duties as employees or elected officials of the State, or any political subdivision thereof, or of the United States, and not as representatives of any other person; moreover, expenditures listed in § 5835 of this title made by such persons or their employers in connection with these official duties shall not qualify such persons as lobbyists under subsection (a)(5)c. of this section;

(3) Persons who, in relation to the duties or interests of their employment or at the request or suggestion of their employer, communicate with the General Assembly or a state agency concerning any legislation, regulation or other matter before the General Assembly or such state agency, if such communication is an isolated, exceptional or infrequent activity in relation to the usual duties of their employment


More Lobbying Exceptions: (4) Persons communicating with the General Assembly or a state agency if

such communication is undertaken by them as a personal expression and not as an agent of their employers as to matters of interest to a person by whom or by which they are employed and if they receive no additional compensation or reward, in money or otherwise, for or as a result of such communication;

(5) Persons testifying at public hearings conducted by the General Assembly or a state agency who do not otherwise act as lobbyists;

(6) Persons appearing on behalf of any religious organization with respect to subjects of legislation or regulation that directly relate to the religious beliefs and practices of that organization who do not otherwise act as lobbyists;

(7) Attorneys representing clients in administrative adjudications governed by the provisions of subchapter III of Chapter 101 of this title, representing clients before the Tax Appeals Board, or in other administrative procedures where ex parte communications with the state agency with authority over the matter are prohibited;

(8) Attorneys representing clients with regard to criminal or civil law

enforcement proceedings, or in any judicial proceedings.


Key Points Compensation is not required – volunteers may be “Lobbyists”

“Direct Communication” required to trigger the statute – organizing ‘grassroots’ lobbying doesn’t count

“Reportable Expenditures” void the statutory exceptions

For volunteers or organization members, the “authorization” and “substantial purpose” elements in the statute are critical

Statute not limited to legislative “matters” – scope is broader than Internal Revenue Code regulations

Allowable Lobbying ActivityLocal Regulations If you are conducting public policy and

lobbying efforts at the local level, you will also want to research relevant local rules and regulations for lobbyists

Again, pay particular attention to: Ethics Regulations Lobbyist Regulations Gifts/conflict of interest provisions Reporting of lobbyists and organizations Disclosure of activities, finances

Allowable Lobbying ActivityRemaining Nonpartisan While nonprofit organizations have an

opportunity to educate the public and engage in public participation, organizations need to ensure that all participation in community affairs shall be strictly nonpartisan.

Allowable Lobbying ActivityRemaining Nonpartisan What can a 501(c)(3) do?

Issue advocacy Conduct candidate forums/meet the candidate

nights with all candidates Send questionnaires to each candidate Voter education Voter registration & get-out-the-vote activities Candidate education

Remaining NonpartisanIs the activity nonpartisan?

Facts and Circumstances Test

Does it look like you are supporting or opposing a candidate for public office?

Remaining NonpartisanIs the activity nonpartisan?

Low Risk

Some Risk

High Risk

Individuals acting in their own capacity can engage in electoral activity

Must be off the clock or on personal leave Organizations cannot ratify the

individual’s acts expressly or by implication

Remaining NonpartisanIs the individual’s activity nonpartisan?

Questions and Answers

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