I’ve been told many times throughout my career that non-profits cannot advocate and cannot engage with elected officials. The reality is far from the truth!
Charitable organizations, non-profits, and tax-exempt agencies are able to advocate, but how you do so depends on your IRS non-profit designation. For today, we will talk about 501(c)3 organizations and lobbying, which is a specific type of advocacy. According to the IRS, “a 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax exempt status.”
So, how much is too much? You might use the expenditure test. This test is a gauge that the IRS uses to define “influencing legislation” or lobbying. To do this, your organization must file a 501(h) but this gives you a concrete measure for lobbying. To better understand the expenditure test, click here.
There’s also the substantial parts test, which is another way you can measure “how much is too much.” Visit this IRS website for more information.
We use the terms advocacy, lobbying, and elected official education interchangeably, but they have definitions, which really matter when determining your financial obligations as an organization. Stay tuned to this blog for additional information about advocacy, lobbying, and other great advice for non-profit organizations.
As always, I recommend that you speak with your accountant and a tax professional before engaging in any activities that could impact your 501(c)3 status but use this as an opportunity to explore your advocacy and public policy potential!
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