Investing in Change: Foundation Support for Lobbying and Other - - PDF document

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Investing in Change: Foundation Support for Lobbying and Other - - PDF document

May 03, 2023 186 likes •476 views

Investing in Change: Foundation Support for Lobbying and Other Advocacy Abby Levine, Director, Bolder Advocacy Keystone Policy Series Webinar ~ March 29, 2017 501(c)(3) 501(c)(3) 501(c)(4) Private Foundation Public Foundation/ 501(c)(5)

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Investing in Change: Foundation Support for Lobbying and Other Advocacy

Abby Levine, Director, Bolder Advocacy Keystone Policy Series Webinar ~ March 29, 2017

501(c)(3) Private Foundation 501(c)(4) 501(c)(5) 501(c)(6) Examples Tax Treatment Lobbying Activities Electoral Activities

Contributions tax-deductible

Tax-Exempt Tax-Exempt Cannot support or

  • ppose a candidate

for public office Secondary activity Must follow election law Prohibitive tax on foundation and managers 501(c)(3) Public Foundation/ Charity

Contributions tax-deductible

Tax-Exempt Cannot support or

  • ppose a candidate

for public office Insubstantial Part or 501(h) Expenditure

EXTREMELY LIMITED LIMITED UNLIMITED

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Public Education Educating Legislators Nonpartisan Voter Ed.

PARTISAN POLITICAL LOBBYING

Get to Know Legislators Educational Conferences Research Lobbying Exceptions Influencing Corporations Training Regulatory Efforts Litigation

AVENUES OF ADVOCACY

Organizing

Who can be an advocate?

If you care about an issue, then you can be an advocate. And as a nonprofit board member, there’s at least one issue that you care about – your organization’s mission. Advocacy is simply communicating the importance of your mission to others. And helping others understand how larger issues or decisions in your community are impacting your organization, its work, and the community you serve.

If you have a passion and a voice, you have what it takes to be an advocate.

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What you can do

  • 1. Get started. Download the board discussion guide

at www.standforyourmission.org.

  • 2. Get informed. Jump-start your advocacy efforts with

tips and guidelines from our resource center.

  • 3. Get personal. Tell others how board advocacy

has made a difference for your organization and the people you serve.

  • 4. Get talking. Tell other nonprofit leaders

why we need to stand for our missions! Visit www.standforyourmission.org to join the conversation.

Supporting ADVOCACY

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BUILD Capacity

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GENERAL SUPPORT Grants RESPONDER: Policy HAPPENS

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CONVENER: Educate and empower grantees

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SPECIFIC PROJECT Grants

ADVOCATE

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Public Foundations CAN Lobby

Public foundations can lobby

  • Insubstantial part

test OR

  • 501(h) expenditure

test

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

  • r

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

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

LOBBYING

for

  • rganizations

using 501(h) & private foundations

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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11 State Legislators U.S. Legislators County Board of Supervisors, City Council

DIRECT Communication Legislator Expresses a view about specific legislation GRASSROOTS Communication General public Expresses a view about specific legislation Call to action

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 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 SPECIFIC LEGISLATION SPECIFIC LEGISLATION

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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14 Regulations Executive Orders and Executive Actions Enforcement of Existing Laws Litigation

NOT LEGISLATION

IRS Lobbying or not?

  • A youth justice organization urges state legislators to pass a

bill to limit juvenile solitary confinement:

  • An immigrant rights organization asks the police chief to

stop asking if suspects are undocumented:

  • An economic justice organization asks VA Senator Adam

Ebbin to sponsor a minimum wage bill:

  • A youth and education rights organization asks a school

district to increase funding for English language learners: LOBBYING NOT LOBBYING NOT LOBBYING LOBBYING

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Grassroots Lobbying

DIRECT Communication Legislator Expresses a view about specific legislation GRASSROOTS Communication General public Expresses a view about specific legislation Call to action

Call to Action

TELLING TO CONTACT legislator(s) or PROVIDING CONTACT INFO, like phone number, e-mail address, mailing address, and/or other contact info of legislator(s) or PROVIDING MECHANISM to enable communication with legislator(s) or 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 DIRECT Communication Legislator Expresses a view about specific legislation GRASSROOTS Communication General public Expresses a view about specific legislation Call to action

Not Lobbying

These Are NOT Calls to Action:

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

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Call to Action

TELLING TO CONTACT legislator(s) or PROVIDING CONTACT INFO, like phone number, e-mail address, mailing address, and/or other contact info of legislator(s) or PROVIDING MECHANISM to enable communication with legislator(s) or 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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18 Nonpartisan analysis, study, or research Request for technical assistance Self defense Examinations and discussions

  • f broad social, economic, and

similar problems

Lobbying EXCEPTIONS

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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

Technical ASSISTANCE

MUST Invitation in Writing

  • n Behalf of a

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

IRS Lobbying KEY POINTS for Your Grantees (and Public Foundations):

▪ All 501(c)(3)s have a right to advocate. ▪ All 501(c)(3) public charities have a

right to lobby (influence legislation).

▪ Many activities that influence public

policy will not even meet the definition

  • f “lobbying.”

▪ Contact Alliance for Justice for

assistance.

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501(c)(3) Private Foundation 501(c)(4) 501(c)(5) 501(c)(6) Examples Tax Treatment Lobbying Activities Electoral Activities

Contributions tax-deductible

Tax-Exempt Tax-Exempt Cannot support or

  • ppose a candidate

for public office Secondary activity Must follow election law Prohibitive tax on foundation and managers 501(c)(3) Public Foundation/ Charity

Contributions tax-deductible

Tax-Exempt Cannot support or

  • ppose a candidate

for public office Insubstantial Part or 501(h) Expenditure

EXTREMELY LIMITED LIMITED UNLIMITED

Public Foundation Funding for Advocacy and Lobbying:

  • You can support public charities that engage

in non-lobbying advocacy.

  • You can support public charities that engage

in lobbying with grants that are earmarked for lobbying.

  • You can support public charities that engage

in lobbying with grants that are not earmarked for lobbying.

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Private Foundation Funding for Advocacy and Lobbying:

  • You can support public charities that engage

in non-lobbying advocacy*.

  • You can support public charities that engage

in lobbying with grants that are not earmarked for lobbying.

  • You cannot support public charities with

grants that are earmarked for lobbying.

*Private foundations have some limits on support for voter

  • registration. See next slide!

Earmarked project funded must be:

  • Sponsored by a 501(c)(3) organization
  • Nonpartisan
  • Conducted in 5 or more states
  • Not confined to one specific election

cycle

  • Run by an organization that meets

additional rules related to the diversity of its funding

Special Rules: Funding Voter Registration Drive

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This grant is not earmarked for lobbying This grant may not be used for lobbying

vs.

General Support Grants Specific Project Grants

Two completely legal safe harbors for private foundations to fund grantees that lobby

$$$

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General Support Grant “Safe Harbor”

If a private foundation does not EARMARK a grant for lobbying, the foundation is not legally responsible for its grantee’s lobbying.

≤ SPECIFIC PROJECT Grants

Foundation grant

Specific project’s non-lobbying component

For Public Foundations and Private Foundations

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HOW PROJECT GRANT RULE WORKS

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26 Restricting grantees from lobbying is not necessary. Restrictive grant clauses limit grantees’ flexibility to accomplish their missions and ability to lobby within their own limits. Lobbying restriction is only necessary when private foundation makes grant to non- 501(c)(3) organizations

Restrictive Clauses in Grant Agreements

If the grant is not earmarked for lobbying, grant agreement should state it is“not earmarked for lobbying.” If the grant is for a specific project grant, the grant agreement should state that. If the grant is for general support, the grant agreement should state that.

Helpful Clauses in Grant Agreements

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Provide multi-year funding Provide general operating support Provide maximum flexibility Hire staff and recruit board members with policy or advocacy experience Build grantee partners’ advocacy capacity Help grantee partners understand the legal rules of advocacy

Best Practices

Evaluate advocacy work with grantee partners Collaborate with other foundations Listen to the needs of grantee partners and communicate the foundation’s support for advocacy Share advocacy successes with other foundations

Best Practices (continued)

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For more information:

For free coaching about laws impacting nonprofit advocacy:

advocacy@afj.org 866.675.6229

For free tools, fact sheets, and publications

www.bolderadvocacy.org

alevine@afj.org

@AFJBeBold @Alevineafj BolderAdvocacy