Rules of the Game: Ask Us Anything

Every day we answer questions from nonprofits about how they can be the most effective advocates they can be while staying legal. On this edition, we answer some of your questions as we get ready for a big year of advocacy!

Our Attorneys for This Episode

• Brittany Hacker
• Monika Graham
• Tim Mooney

You Asked… We Answered

How can a grantmaking organization effectively fund advocacy efforts while adhering to IRS regulations and maximizing impact?

• Transformative Impact of Advocacy Funding:
  • Supports movements that change policies and empower communities.
  • Advances social justice, environmental protection, and human rights.
• Key Grant Types for Advocacy Support:
  • General Support Grants:
    • Not earmarked for specific purposes, providing grantees flexibility.
    • Can indirectly support lobbying without triggering taxable expenditures, provided no explicit agreement ties the funds to lobbying activities.
    • Past lobbying by a grantee does not disqualify funding unless explicitly linked to lobbying in the grant agreement.
  • Specific Project Grants:
    • Designated for specific projects and can include lobbying within the project’s scope.
    • Total grants for the same project must not exceed the non-lobbying portion of the grantee’s budget.
  • Legal Considerations for Grantmakers:
    • Private foundations must ensure grants avoid taxable expenditures by following IRS rules for general and specific project grants.
    • Public foundations and charities have more flexibility in funding lobbying but must adhere to lobbying limits under the “insubstantial part test” or “501(h) expenditure test.”
    • Earmarked lobbying funds count toward lobbying limits for both grantmaker and grantee, effectively “double-counting” expenses.
  • Maximizing Advocacy Support:
    • Utilize safe harbor rules like specific project grants to contribute meaningfully without violating IRS regulations.
    • Take a look at AFJ’s Project Grant Rule Hub and more for additional resources.

Our organization (we’re a (c)(3)) works to combat climate change and we have some deep concerns about the nominee for EPA. Our board isn’t sure if we can oppose the nomination or not – is this like the election where we can’t support or oppose the candidate?

• Bad news… the EPA Admin nominee has super questionable takes on climate change.
• Good news… you can oppose his nomination if you choose
• This is different than elections where you can’t, because the law views the vote on his nomination is a legislative act
• Counts as lobbying depending on how you do it
• Check out episode 45 where we talk about nomination advocacy from the perspective of SCOTUS, but the rules are the same

We’ve heard a lot about the new administration coming after nonprofits that may oppose their policy plans. What can we do to prepare and should we be worried? 

• This is a valid fear for activists in the progressive movement
• HR 9495 and threats from legislation
• Rep. Billy Long as nominee for Commissioner of the IRS
• Lobby for or against pending legislation, confirmations of cabinet positions
• Plan for personal attacks: train volunteers and staff, know the law, have a communications plan to respond, take care of your staff

Resources 

• Rules of the Game #45 – Supreme Court Nomination Advocacy Revisited
• Rules of the Game #109 – Politically Motivated Attacks