Texas Nonprofit Summit

Jason SaboFrontera Strategy

Courtney HoffmanCRH Capitol Communications

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@texassabo@crhtexas

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Overview of Presentation

• What’s the Context for Nonprofits?• Basic Federal Do’s and Don’ts• The Texas Way: The Lege and the Lobby

• 5 Simple Steps to Get Stuff Done• Discussion

Where is power in 2012?

• By the Numbers…• Texas House in 2011 was 102 R and 48 D.• Texas Senate in 2011 was 19 R and 12 D.• 2013 may have slight change in numbers but big shift to the right in

both chambers thanks to redistricting and primary process.• Chairmen of key committees of the Texas Senate and House have

retired or were defeated in advance of the 2013 Texas Legislature.• Primary results will push legislators to the right to insulate against

“being primaried” by a Tea Party Republican.

• By the Map…• New legislative districts further consolidate power in fast-growth

suburban counties.• Rural and West Texas communities continue to see rapid erosion of

people and of political power.• Border communities grow in population and clout.

Where is power in 2012?

• By the Agency…• Texas executive branch long considered weak. Reality couldn’t

be farther from the truth – especially now.• Impressive consolidation of state agency direction and control

under Texas Governor Rick Perry. Longest serving Governor in Texas history and no limit on the number of terms served.

• New leadership at state’s largest agencies: education and health.

• By the Tweet…• Capitol press corps(e) continues to dwindle, creating new

opportunities for ordinary citizens and activists to set the tone and frame of most important public policy debates.

• Social media outlets quickly outpacing traditional media in terms of importance and response time. Keep an eye on #txlege.

Texas State Budget in 2011

• The Bonnie and Clyde Effect and Texas Children

• Historic Budget Cuts to Children’s Programs• Education

• $4 billion from Foundation School Program• $1.3 billion from Discretionary Grants

• Health and Human Services• Big direct cuts to prevention programs and services• Cuts to providers (not kids) with access impact

• LOCAL Taxpayers Will Pick Up the Difference• Not an Aberration or One Time Event – Reality

for the Foreseeable Future

Texas State Budget in 2011

What the #$%@ happened?!?• The Great Recession and Revenue Slowdown• Structural Deficit of $10 Billion• Loss of Federal Stimulus Funds• Lack of Political Willingness to Utilize the

Rainy Day Fund or Increase Revenues (Sort of.)

• Hangover from deferrals by past legislatures.

2013 and Nonprofits

• The Ghosts of Legislatures Past…• 2006 Structural Deficit of up to $10 billion will return.• February 2012 Projected Medicaid Shortfall of “up to $17 billion”• Massive deferrals of Medicaid and Public Education Costs from the

2011 Texas Legislature

• Tighter city, county, and school budgets combined with growing pressures on Texas state budget (Energy, Water, and Transportation)

• Health Care Reform and Health Care Exchanges – Federal Exchange Default and its Implications for Texas

Public School Finance: The Most Important Subject that Nobody Wants to Talk About (Yet)

BUT… The budget picture is looking less bleak. Restore?

You’re either at the table or you’re on

the menu.

Why are nonprofits always the cheap appetizers?

We censor ourselves before we even speak.We do not understand the basics of the law

and allow others to scare us into inaction.We never ask supporters to fund advocacy

and are timid about asking them to push pro-nonprofit policies.

Because all politicians love nonprofits and don’t need to be pressured to do the right thing… RIGHT?!?

Because we always have been…

Is lobbying by nonprofits legal!?!?

YES! Completely, absolutely, totally…

Lobbying by 501(c )(3) nonprofits is 100% legal.

Take the H Election and know your limits.

• A generous amount:• 20 percent of the first $500,000 of

annual expenditures;• 15 percent of the next $500,000;• 10 percent of the next $500,000;• 5 percent for every additional

$500,000 up to $1 million.• ABC nonprofit with expenditures of $500,000. • 20% of $500,000 = $100,000 =

Overall lobbying limit.

Substantial Part:• No certain and definitely

allowable amounts of lobbying expenditures

• A single year violation may result in the loss of tax-exempt status

• Importance of an issue is a relevant factor in determining permissible lobbying activity

• Possible additional reporting burden on tax form 990

Expenditure Test:• Clear and specific

definitions of lobbying• Certain and definitely

allowable amount of lobbying expenditures

• No jeopardy to tax-exempt status for a single year violation

• Importance of an issue is not a factor in measuring permissible lobbying activities

• Possibly less reporting burden than substantial part test

State and Local nonprofits CAN:

• Write and encourage people to write letters concerning specific legislation.

• Meet with and speak to public officials about legislation.

• Testify at a public hearing.• Provide research, analysis and

commentary• Publicly endorse or oppose specific

legislation.• Invite a legislator to visit

What activities are NOT lobbying?

• Self-Defense (Matters affecting a nonprofit’s own tax status, powers or advocacy rights.)

• Contacts with elected officials or executive branch about proposed regulations.

• Lobbying by volunteers (AKA Cruise Missiles)

• Communication with the organization’s members on legislation with no call to action.

• Participation in a legislative hearing at the invitation of a committee or member.

Nonprofits CANNOT:

• Raise funds for candidates as an organization.• Publicly support or oppose a candidate.• Conduct PARTISAN voter registration.

BUT – remember – after work you are a citizen and have the

full rights and obligations of anyone in our democracy. Just be

mindful of your actions and don’t be stupid...

But know the Texas Lobby Law

• Pertains only to lobbying at the state level.

• Applies to both for-profit and non-profit.

• Administered by the Texas Ethics Commission www.ethics.state.tx.us

• Includes triggers for lobby registration, reporting requirements, prohibitions, civil and criminal sanctions.

Texas Lobby Registration?

• If a person or entity communicates directly with a state legislator, staff or executive agency personnel and

• That person is compensated or reimbursed more than $1,000 a quarter and more than 5% of that person’s time is engaged in lobby activity or

• Anyone lobbying spends more than $500 in a quarter on state legislators, staff and/or agency personnel

Then Lobby Registration is required.

So…what does that mean for Texas non-profits?

• Focus on grassroots lobbying - involve your board and volunteers in lobbying rather than paid staff.

• Make volunteers aware of the spending threshold for lobby registration.

• Educate about prohibitions-offering food, drink, transportation, entertainment and gifts-they apply to all, not just registered lobbyists

• Register if you cross either the compensation or expenditure threshold.

• Non-profit lobby registration is discounted - $150 a year.

The Texas Legislative Cycle

• Legislative Session – 140 days, odd-numbered years

• Interim – Time between Sessions• Legislative Strategy is a biennial (two-

year) cycle• Plan for the legislative, budget and

regulatory processes• Monitor campaign and political

activity

1. Focus on 1 or 2 issues.2. Be accurate and have

meaningful data at your fingertips.

3. Be timely. Keep it simple.4. Be honest and be credible.5. Follow up during

implementation.

How to Win: The Cardinal Rules of Lobbying

Deciding where to focus is the hardest part of your advocacy. You MUST prioritize.

If you try to be everything to everyone, you will get nothing done and NOT protect your appropriations.

For the time being, THINK FREE BILLS!Cardinal Rule of Lobbying: Pick your top

one or two FREE priorities and stick with them to the end.

In Practice: High School Financial Literacy

Focus Focus Focus

Data and statistics are increasingly important.

You MUST have the ability to show the effectiveness, efficiency and return on investment of everything you do.

The more unusual the voice, the better. Cardinal Rule of Lobbying: Messengers

matter. Numbers might be the same but the impact can be very different.

In Practice: George H.W. Bush School Radicals

Have meaningful data.

Speed is important. If you don’t provide answers to legislators and staff quickly, they will ask someone else for the same info.

We know more about our issues than anyone else and we LOVE to let the world know how smart we are. If you can’t explain your issue in one page, you need to reassess your approach.

Cardinal Rule of Lobbying: Always respond quickly and in easy to understand language to requests for information, but don’t stretch the truth in order to be fast.

In Practice: “Jason, SHUT UP! You’re going to kill my bill!”

Keep it simple.

Never, never, never stretch the truth.If you don’t know the answer to any

question, it’s OK to say “I don’t know.”Create the Excuse to ReturnCardinal Rule of Lobbying: If you are

going to oppose or contradict legislators’ bills or proposals, tell them beforehand.

In Practice: Today’s child care quality enemy is tomorrow’s juvenile justice BFF.

Be very credible.

Follow Up after You Win

Passing the bill is only the first step, actually making it do something is much harder.

Most advocates stop their work on the last day of the legislature.

Regardless of what your legislation does, cash-strapped agencies will have little time or personnel to implement your glorious idea.

Cardinal Rule of Lobbying: Don’t assume your work is ever done. It isn’t.

In Practice: Meningitis legislation implementation.

Regardless of what they ask, FOCUS and repeat, repeat, repeat your message.

The first person to call back gets in the story. The first person to be coherent gets quoted.

Nothing is worse than being called out as dishonest in the press.

Journalists ARE social media. If they think your issue is a story, others will too.

Lobby the media like you do the legislature.

Lobby the media.

Use the Internets.

Twitter is more than a service for telling people you cut your toenails.

Social media allow advocates to create their own news – instead of waiting for traditional media to decide we have a story to tell.

Social media also allow advocates direct access to legislators, staff, and other advocates. And vice versa, so be smart.

What did he/she just say?

Jason SaboVoice and Text: 512.450.2125 fronterastrategy@gmail.com

www.facebook.com/jasonsabo@texassabo

Courtney HoffmanVoice and Text: 512.751.2269

choffman@crhtexas.com@crhtexas