The United States is in the midst of an election season, which brings discussions, debates and decisions. Internal Revenue Code (“IRC”) Section 501(c)(3) organizations, which include charities and religious organizations, are subject to strict rules regarding their participation in political activities.
Violation of these rules can result in the loss of tax-exempt status and the imposition of taxes. In this article, we will explore both prohibited and permitted activities.
It is a common misconception that tax-exempt organizations may not conduct any lobbying activities. Not only is it legal for tax-exempt organizations to conduct lobbying activities, but Congress has recognized that lobbying efforts by tax-exempt organizations represent an appropriate and important activity.
Lobbying and advocacy are related but distinct activities that are commonly confused with one another. One important thing to keep in mind is that lobbying is a type of advocacy, but advocacy activities are not always lobbying.
Lobbying is a specific type of advocacy that involves direct communication with policymakers to influence specific legislation or regulations. Lobbying activities can include contacting a legislative member, legislative staff, or government employee to attempt to influence them to propose, support, or oppose specific legislation, and/or trying to persuade the public to share your views on a particular legislative proposal. There are two main types of lobbying:
- Direct lobbying is communicating with legislators or government officials to influence legislation; and,
- Grassroots lobbying is mobilizing the public to contact legislators or government officials about specific legislation.
Advocacy is focused on education about a specific cause or issue to influence public opinion and policy and encompasses a wide range of activities aimed at creating awareness and driving change. These activities can include public education, grassroots organizing, and nonpartisan voter engagement.
To maintain IRC Section 501(c)(3) tax-exempt status, organizations must avoid all political campaign activities and must keep lobbying within permissible limits.
Although there is an absolute prohibition on IRC 501(c)(3) organizations participating or intervening in any political campaign on behalf of or in opposition to candidates for public office, IRC Section 501(c)(3) organizations can engage in lobbying activity if carefully conceived and managed.
If you have any questions about your organization’s lobbying activities, please reach out to Robin Murphy or Sarah Piot.
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