Common Advocacy Questions

Q:  Can we still solicit tax-deductible donations if we choose to lobby under the 501(h) expenditure test?

A:  Yes!  501(c)(3) organizations have a choice between two options for measuring their lobbying limits:  you can remain with the default "insubstantial part test" or you can elect to use the "501(h) expenditure test."  Choosing the 501(h) expenditure test does not change the tax-exempt status of your nonprofit – you are still a 501(c)(3) organization that may accept tax-deductible contributions.  The reference to "501(h)" is simply a reference to where the expenditure test is located within the tax code.

Q:  Our 501(c)(3) measures our lobbying limits using the 501(h) expenditure test, which defines lobbying as talking about “specific legislation.”  What do the rules mean by “specific legislation?”  Is it lobbying if we express our views to a legislator about the need for legislation – even if no bill has been introduced?

A:  Great question!  The term "specific legislation" trips up a lot of people.  Specific legislation is actually defined to include much more than an introduced bill or a written legislative proposal.  The definition of specific legislation also includes proposed legislation – even if it has not been written into a bill to be introduced. 
 
Think of the definition of specific legislation as those times when someone says, “There oughtta be a law that says X.”  Just coming up with an idea that simple – yet specific enough that a legislator could easily write a bill based on that idea – is usually enough to count as specific legislation. 

So, the term specific legislation does not mean the bill or legislation itself, but instead is the legislative idea or proposal.  If you have additional questions about definitions for measuring your 501(c)(3)’s lobbying limits, please call Alliance for Justice’s toll-free technical assistance hotline at 866-NPLOBBY or email us at advocacy@afj.org.  Our Attorney of the Day is available to answer questions about advocacy from all nonprofits free of charge.

Q:  Must a foundation have a written grant agreement when it awards a grant to a particular organization? 

A: No.  We strongly recommend having a written grant agreement whenever a grant is awarded, but one is generally not  required.  The only time a written grant agreement is required is when a private foundation makes a grant to a non-501(c)(3) organization.

Q:  Could you please tell me if the following is: (1) lobbying or not lobbying and (2) if lobbying, direct lobbying or grassroots lobbying?

We are a 501 c3. We filed the 501h election.

We served as fiscal sponsor to a group of people who raised funds to support a piece of local legislation to have a size cap on big box retail stores. They printed and mailed flyers to the public giving them facts about the costs on a community of big box stores and urging them to vote "yes" on the size cap measure. They did not ask legislators to support the measure. I have found two conflicting rulings as follows:Either the activities could be Direct Lobbying (subject to the higher limit) OR they may not be lobbying at all.

(1) When directed to members of the public, even though the advocacy campaign endorses a specific response in law to a problem, such as increasing funding for education, it is not lobbying unless it encourages citizens to urge their legislators to pass an increase in education funding.

(2) With initiatives and referenda, the voters act as legislators, so urging voters to approve or reject an initiative or referendum is "direct" lobbying. Ironically, this allows more lobbying since the limit for direct lobbying is higher.

A:  The tax code and regulations define lobbying for c3s that have made the 501(h) election as:

Direct Lobbying: A Communication, With a Legislator, Expressing a View About Specific Legislation

Grassroots Lobbying: A Communication, With the General Public, Expressing a View About Specific Legislation, WITH a Call to Action -- (There are four types of calls to action i. Saying "Call" or "Contact" your legislator, ii. Providing the contact information for your legislator, iii. Providing a Mechanism by which the public can contact their legislators, like "Click here to send an email to Congressman _" , and iv. Listing the Members of a committee that will be voting on legislation.)

That being said, I will answer in two parts.

I. If the measure you were referring to is a ballot measure, then by communicating with the public expressing a view about this measure, you are engaging in DIRECT lobbying. The reason is that when we are talking about ballot measures, the general public serve as legislators because they are the ones who vote a measure into law. Therefore you CAN as a c3 support or oppose a ballot measure and communicate with or rally the public around it, but it is considered DIRECT lobbying.

II. If the measure you were referring to is an actual piece of legislation being considered by a governmental body, like the city council, state legislature or Congress, THEN, your scenario would be different. Here you are communicating with the general public about legislation WITHOUT a call to Action then you are not engaging in Direct Lobbying OR grassroots lobbying, just general advocacy.