Advocacy

Advocacy is identifying, embracing and promoting a cause, and then using information and education to make a compelling case for that cause. It can shape public perception, as well as public policy. There are no limits to advocacy efforts that can be accomplished through education outreach that includes direct mail, publications, presentations and the Internet.

Informing elected officials about the need for a greater investment in the arts is advocacy. Presenting materials to lawmakers that make the case for this need is also advocacy.

Board members must understand how public policy impacts their organizations, the importance of educating policy makers, and the need to include resources for advocacy in an organization’s budget. Use these resources to help your board understand the basic components of good governance and serve their organization and the public in the best possible manner.

Lobbying

A 501(c)(3) can choose from two sets of rules: a measure based purely on expenditures or a general "insubstantial part" test. 501(c)(3)s that choose to use the expenditure test can spendup to 20% of their budget on legislative lobbying. For those that do not "elect," they fall under a "substantial part" test, in which lobbying may not constitute more than an insubstantial part of a charity's activities.

Direct Lobbying: Attempting to “influence legislation”

• Communication made to either a legislator or a government employee who may participate in the formulating of legislation.

• Refers to a specific piece of legislation.

• Expresses a view or position on specific legislation.

Grassroots Lobbying: Communication directed to the general public

• Attempt to influence legislation by encouraging the public to take action.

• Refers to specific legislation, urges a position and calls to action.

Exclusions from Lobbying:

• Communications that discuss legislation without a call to action.

• Providing pertinent facts about a legislative issue to enable an independent opinion.

• Respond to a request from a legislative committee for technical advice on legislation.

• Taking a position on legislation that might affect the organization’s right to exist.

501(h) ELECTION

Section 501(h) of the Internal Revenue Code authorizes nonprofits to elect an optional measure of their lobbying activities known as the 'expenditure test', and is considered a much easier method to keep track of the amount of legal lobbying in an organization. The total lobbying expenditures limits under the 501(h) expenditure test are:

• 20 % of the first $500,000 exempt purpose expenditures ($100,000).

• 15% of the next $500,000, 10% of the next and 5% of the remaining expenditures.

• Maximum of $1 million in lobbying expenses.