Can My Non Profit Lobby If I Apply for 501c3 Status?
Although the IRS does have very specific requirements for what can and what cannot be done, in regards to lobbying, these requirements should not deter your organization from applying for 501c3 tax exempt status if you believe that lobbying would further your mission and exempt purpose. A non profit organization with 501c3 status can engage in lobbying and in many instances, should engage in lobbying. I am writing this article, not as an exhaustive discussion on 501c3 organizations and lobbying, but to help you decide if you should still apply for tax exempt status if you want to engage in lobbying.
Political activities and legislative activities (commonly referred to as lobbying) are two different things and are subject to two different sets of rules. But hopefully this will point you in the right direction:
Political activities are almost all prohibited by the IRS. These type of activities would include: directly or indirectly campaigning for (or against) a political candidate who is elected to public office, contributing to a political campaign, or making any type of statement for (or against) a political candidate. This type of activity can result in your 501c3 status being denied or revoked.
Legislative Activities* may also cause your 501c3 status to be denied or revoked if it makes up a substantial part of your activities. Your organization cannot be formed for the sole purpose of influencing legislation, but in many cases it may be critical to furthering the mission of your organization. If this is the case, you should not necessarily shy away from applying for 501c3 status, but you will need to be careful to follow IRS guidelines. The keyword above is “substantial.”
Now aside from involving your organization in issues of public policy through educational meetings and distributing educational materials relating to a current issue, which is allowed; how can your organization work with legislative bodies to accomplish your mission?
Well, let’s take a look at an example. One of my favorite non-profit organizations, International Justice Mission (IJM), works to “secure justice for victims of slavery, sexual exploitation and other forms of violent oppression.” Now IJM’s main activity is to provide support to individuals who have been a victim of this type of injustice. However, IJM also organizes many Justice Campaigns with which they mobilize Americans to support U.S. policies to abolish sex trafficking and modern-day slavery. One of their current goals is to have Congress establish a trade policy to deny access to American markets for items that were produced by child or slave labor. IJM specifically targets policy-makers, aka legislators, to push for this reform. Staff from IJM meets with legislators and works to educate them along with voters. This activity is considered lobbying and it is being actively done by a 501c3 non-profit organization.
This is just one of many organizations who participates in a form of lobbying to accomplish its mission. Now there are maximums that can be spent on lobbying by a 501c3 organization and your organization should file Form 5768 along with your initial 501c3 application. But if you are considering not applying for 501c3 status because you want to participate in lobbying, carefully look into the limitations, but remember it can be done. Remember, IJM’s goal through its lobbying activities is to influence policy-makers to “champion the rights of the poor and vulnerable,” which is their exempt purpose. Like in this example, if you feel lobbying is necessary to promote your exempt purpose, do not let that hinder your organization in applying for 501c3 tax exempt status. Rather take a look at the specific rules and requirements and make an informed decision, you may be surprised at what you can do.
*Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure. It does not include actions by executive, judicial, or administrative bodies. (IRS.gov)
Written by A. Irving