The Rules Remain the Same: Lobbying in the Wake of a Recent Executive Order Targeting the Misuse of Federal Grant Funds

On August 28, just before Labor Day weekend, President Trump took yet another executive action that has the nonprofit sector buzzing. In an Executive Order entitled “Use of Appropriated Funds for Illegal Lobbying and Partisan Political Activity by Federal Grantees”, he directed the Attorney General to investigate whether federal grant funds are being used to support lobbying initiatives. While the order signals yet another challenge to nonprofits’ ability to conduct mission-critical advocacy initiatives, and it speaks to potential enforcement actions against organizations that misuse federal dollars, it does not change the rules that currently apply to nonprofit engagement in policy activities.

In fact, the Internal Revenue Code allows 501(c)(3) public charities to lobby for or against legislation, provided that they stay within their lobbying limits, report their lobbying on their 990 where required, and use unrestricted funding. While federal grants often prohibit organizations from using appropriated funds to lobby, they do not often preclude nonprofits from using unrestricted dollars to advance their legislative priorities. That is why it’s so important to read your grant agreements carefully, to track your lobbying activities and expenditures, and to ensure that any lobbying is conducted with appropriate funding.

If you have questions about your nonprofit’s ability to engage with government officials and impact public policy, feel free to reach out to our free technical assistance hotline.