Foundation Support for Lobbying and Other Advocacy WEBINAR | PART 2 - - PowerPoint PPT Presentation

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Feb 16, 2024 228 likes •637 views

INVESTING IN CHANGE: Foundation Support for Lobbying and Other Advocacy WEBINAR | PART 2 December 8, 2016 501(c)(4) 501(c)(3) 501(c)(3) social welfare Public charity Private foundation Examples tax-exempt tax-exempt contributions Tax

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INVESTING IN CHANGE:

Foundation Support for Lobbying and Other Advocacy

WEBINAR | PART 2 December 8, 2016

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Cannot support or

ppose a candidate

for office 501(c)(3) Public charity 501(c)(4) social welfare

Examples Tax Treatment Lobbying Activities Electoral Activities

501(c)(3) Private foundation

tax-exempt secondary activity cannot support or

ppose a candidate

for office limited

unlimited

Prohibitively taxed tax-exempt contributions tax- deductible

contributions tax-deductible

tax-exempt

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Avenues of ADVOCACY

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Supporting ADVOCACY

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HOW CAN FOUNDATIONS

SUPPORT ADVOCACY?

General Support Grants

funding grantees that advocate through general support

Specific Project Grants

funding non-lobbying portions of advocacy projects

Fund Electoral Activities

advocacy includes nonpartisan electoral activities

Make Lobbying Grants

public or community foundations can fund lobbying directly

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Public Foundations CAN Lobby

Public foundations can lobby

▪ Insubstantial part test OR ▪ 501(h) expenditure test

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Private Foundations Tax on Lobbying

Private foundations pay tax on lobbying expenditures

▪ 20% on foundation; 5%

n managers

▪ 100% on foundation; 50%

n managers

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INSUBSTANTIAL PART TEST 1. Default test 2. What is “insubstantial”? 3. Lobbying not defined 4. Activities-based 5. Penalty

501(H) EXPENDITURE TEST 1. Dollar-based limits 2. One-time election – IRS Form 5768 3. Expenditures only 4. Definition of lobbying 5. Penalty less severe

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ANNUAL EXPENDITURES OVERALL LOBBYING LIMIT $500,000 or less 20% $500,000 to $1 million $100,000 +15% of excess over $500,000 $1 million to $1.5 million $175,000 +10% of excess over $1 million $1.5 million to $17 million $225,000 + 5% of excess over $1.5 million Over $17 million $1,000,000

1. Calculate organization’s annual expenditures.
2. Overall lobbying limit:
3. Grassroots lobbying limit is 25% of overall limit.

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WHAT IS

LOBBYING

UNDER THE

501(h)

ELECTION?

DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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Federal

Members of Congress

State

State Legislature

Local

City Council, County Board of Supervisors

International

Foreign Body Legislative in Nature

DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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Who is a legislator? President, governor, mayor, or other executive official who participates in the formulation of legislation. DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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NOT LEGISLATORS

school boards zoning boards housing authorities sewer and water districts

ther “special purpose bodies”

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DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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SPECIFIC LEGISLATION

ISSUE: ESEA Reauthorization

The August recess isn’t meant for playtime! Ask Congress to include crucial civil rights priorities in the Elementary and Secondary Education Act.

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ISSUE: Civil Rights Protections in Schools

NOT SPECIFIC LEGISLATION

Ensure equal opportunity in education for all children. Support civil rights protections for underserved students.

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regulations enforcement of existing laws

NOT SPECIFIC LEGISLATION

executive orders litigation

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CALL TO ACTION

DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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TELLING TO CONTACT legislator(s) PROVIDING ADDRESS, telephone number, and/or other contact information of legislator(s) PROVIDING MECHANISM to enable communication with legislator(s) IDENTIFYING legislator(s)

DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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NOT LOBBYING

NOT calls to action:

“Learn more!” “Take action!” “Support our efforts!” “Get involved!”

DIRECT communication legislator expresses a view about specific legislation GRASSROOTS communication general public expresses a view about specific legislation call to action

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LOBBYING EXCEPTIONS

nonpartisan analysis, study, or research request for technical assistance self-defense examinations and discussions of broad social, economic, and similar problems

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MUST represent full and fair discussion be broadly disseminated MAY express a view contain indirect call to action limit subsequent grassroots lobbying

NONPARTISAN

ANALYSIS

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TECHNICAL

ASSISTANCE

MUST BE invited in writing on behalf of committee available to all members of committee MAY express a view on Specific legislation

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SELF-DEFENSE

MUST RELATE TO powers and duties tax-exempt status deductibility of contributions SHOULD consult with attorney

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ANALYSIS +

DISCUSSIONS

NO SPECIFIC LEGISLATION blue ribbon panel annual reports early stages

f policy

development NO CALL TO ACTION communication does not include call to action

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Advocating for or against a ballot measure is direct lobbying

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A public charity or a community/public foundation may EARMARK a grant for lobbying, but must count the grant against its own LOBBYING LIMIT

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General Support Grants Specific Project Grants

Private foundations should not EARMARK grants for lobbying

but…

Private foundations may FUND grantees that lobby

$$$

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EARMARKED for Lobbying?

Public foundation Private foundation

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≤

Foundation grant Specific project’s non-lobbying amount

SPECIFIC PROJECT GRANT “SAFE HARBOR”

If a foundation grant is less than or equal to a project’s non-lobbying component, the grant is not a lobbying expenditure.

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HOW PROJECT GRANT RULE WORKS

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Restricting public charity grantees from lobbying is not necessary Restrictive grant clauses limit grantees’ flexibility to accomplish their missions and ability to lobby within their own limits Grant can say it is not “earmarked for lobbying” Lobbying restriction is only necessary when private foundation makes grant to non- 501(c)(3) organizations

Grant AGREEMENTS

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WEST COAST 436 14th Street Suite 425 Oakland, CA 94612 510-444-6070 1000 N Alameda Street Suite 340 Los Angeles, CA 90012 213-346-3288 866-675-6229 advocacy@afj.org www.bolderadvocacy.org @AFJBeBold www.facebook.com/BolderAdvocacy EAST COAST 11 Dupont Circle NW 2nd Floor Washington, D.C. 20036 202-822-6070 TEXAS 501 Elm Street Suite 450 Dallas, Texas 75202 (214) 530-9144