What is Lobbying?

Federal tax law controls how much lobbying 501(c)(3) organizations can engage in. Publiccharities can choose to measure their lobbying under either the insubstantial part test orthe 501 (h) expenditure test. While lobbying is not defined under the insubstantial part test,this fact sheet provides an overview of how lobbying is defined for organizations thatmeasure their lobbying under the 501 (h) expenditure test.

Direct LobbyingCommunicationwith a Legislatorthat expresses a View about Specific Legislation

Grassroots LobbyingCommunicationwith the Publicthat expresses a View about Specific Legislationand Includes a Call to Action

In order for an actioncontain all of the aboveis missing.

Communication: amechanism to convey

officials who participathe governor or mayo

o be considered direct lobbying or grassroots lobbying it mustelements. It is not lobbying if one or more of the required elements

conversation (in person or by phone), letter, email, fax, or other creativea message.

Legislator, a member of a legislative body or his/her staff. In addition, executive branche in the formulation of legislation are considered legislators (such aswhen vetoing or signing a bill). Members of administrative bodies,

however, such as schDOl boards, sewer and water districts, housing authorities, zoningboards, and other special purposes bodies, whether elected or appointed, are not consideredlegislators.

Public: anyone but aorganization's membesomeone who has giv

egislator or member of an organization. Communications to anrs are considered direct lobbying. For this purpose, a member isn more than a small amount of time or money to the organization.

Expresses a viewin a legislative body oispecific solution to thetaxes, and attempts toProposed legislationbeen written down, orrulemakings /existing laws.

Call to action: a spelobbying action. A cal

about specific legislation: a bill or resolution that has been introducedproposed legislation such as identifying a problem and presenting a aproblem. Specific legislation includes budget appropriations andinfluence the confirmation of judicial and executive branch nominees.

n|iay qualify as specific legislation even if it has not yet been introduced,even fully fleshed out. Specific legislation does not include

promulgation of regulations, executive orders, litigation, or attempts to enforce

ific means of encouraging the communication's recipient to taketo action must comprise one of the following actions: 1) tell the

recipient to contact ahis/her legislator, suchfor enabling the recipientor 4) identify a legislatorabout the organizatiopvote on the legislation,

l^gi^lator; 2) provide information on how the recipient can contactas providing the phone number or address; 3) provide a mechanism

o contact his legislator, such as a postcard, petition, or email form;

s vho will vote on the legislation as being opposed to or undecidedew on the legislation, a member of a legislative committee who will

or^he recipient's legislator.

activityBallot measurereferenda, bondfor or against them aifeEfforts aimed at convinlobbying since the voting

s considered direct lobbying. Although ballot measures, such asand ballot initiatives, are determined at the voting booth, efforts

considered direct lobbying, not impermissible electoral activity,cinb the public to support or oppose ballot measures are direct

(public serves as the legislature.

February 2007

lin :hisThe information containedand not as part of an attorrieV-clprofessional advice tailoredavoiding any penalties thatplain-language guides on fi4np||ofitadvocacy of nonprofits, ainformation, please feel fre^ t£> contact the Alliance for Justice.

:act sheet and any attachments is being provided for informational purposes only

tomay

ent relationship. The information is not a substitute for expert legal, tax, or otherour specific circumstances, and may not be relied upon for the purposes ofe imposed under the Internal Revenue Code. The Alliance for Justice publishes

advocacy topics, offers educational workshops on the laws governing the/ides technical assistance for nonprofits engaging in advocacy. For additional

2003611 Dupont Circle,Washington, D.C.Phone: 202-822-6070Fax: 202-822-606

N.V 2nd FloorALLIANCEJOST,CE

www.allianceforjustice.orgadvocacy@afj.org

866-NPLOBBY

519 17th Street, Suite 560Oakland, CA 94612

Phone:510-444-6070Fax:510-444-6078

ALLIANCE]t3STICE

Most 501 (c)(3) public charit fesgovern lobbying under 501 (h) a

Step 1 - Complete Form 5768

ecting the 501 (h) Expenditure Test

benefit from "electing" the 501 (h) lobbying expenditure test. The rules thate clearer than those that apply under the "insubstantial" standard.

IRS Form 5768. ElectExpenditures To Influence LegAn organization simply supplie;The form needs to be signeretroactively to the first day ift

De2006 forward (assuming the orFor example, a form filed in

Step 2 - Make a CopyMake a copy of Form 5768 ef

Step 3 - Track Lobbying ExpUnder 501 (h), your organizstiolobbying. Direct lobbying is delegislation. Organizations with

in/Revocation of Election by an Eligible Section 501 (c) (3) Organization To Make>lation, is the first step in electing to be governed by the 501 (h) expenditure test,its name, address, and the first tax year to which it wants the election to apply,an authorized officer, usually the president or treasurer. The election appliese fiscal year in which the form is filed and, generally, to all subsequent years,ember 2006 will bring an organization under section 501 (h) from January 1,anization operates under the calendar year).

re mailing it to the IRS because the agency will NOT send a confirmation letter.

nditurescan spend up to 20% of its first $500,000 exempt purpose budget on direct

ned as any communication, with a legislator, expressing a view about specificudget expenditures over $500,000 should apply the following formula:

20% of the first $500,000+ 15% of the next $500,000+ 10% of the next $500,000

+ 5% of the remaining= the overall lobbying limit

public

Grassroots lobbying is deabout specific legislationorganization asks thelegislators of staffers; (2)information for the legistspostcard, petition, letter,recipient's legislator, theorganization's view on thspend more than 25% of

in d as any communication with the general public, expressing a viewwi h a call to action. A call to action refers to four different ways the

o respond to its message: (1) asking the publjc to contact theirtiding the address, phone number, websiteToTother contact

or ; (3) providing a mechanism toeojjtact legislators such as a tear offr e mail link to send a message cficecth^to the legislators; or (4) listing thear les of legislators voting on a bill, or those undecided or opposed tok gislation. An organization that has made the 501 (h) election can never

he r overall lobbying limit on grassroots lobbying.

Therefore, a 501(c)(3), thathave an overall lobbying m

as made the 501 (h) election, with an annual budget of $500,000, wouldof $100,000 and a grassroots lobbying limit of $25,000.

All public charities, includin990 Form and in the event <

5( 1 (h) electing charities need to keep track of their lobbying expenditures for theirf a IRS audit.

Note: To revoke;Form 5768 (question 2).

your organize ion's 501 (h) election, follow steps 1 and 2, filling out the revocation portion of

The information contained in thand not as part of an attorney-'professional advice tailored o yany penalties that may be mplanguage guides on nonproft a<

fact sheet and any attachments is being provided for informational purposes onlylent relationship. The information is not a substitute for expert legal, tax, or otherur specific circumstances, and may not be relied upon for the purposes of avoidingsed under the Internal Revenue Code. The Alliance for Justice publishes plain-vocacy topics, offers educational workshops on the laws governing the advocacy of

nonprofits, and provides technicfeel free to contact the Alliance f

il assistance for nonprofits engaging in advocacy. For additional information, pleaseir Justice.

11 Dupont Circle, N.W.,Washington, D.C. 2003!Phone: 202-822-6070Fax: 202-822-6068

2nd Floor1

www.allianceforjustice.orgadvocacy@afj.org

866-NPLOBBY

519 17th Street, Suite 560Oakland, CA 94612

Phone:510-444-6070Fax:510-444-6078

^ 5768 El(Rev. December 2004)

Department of th« TreasuryInternal Revenue Service

Name of organization

Number and street (or P.O. box no.

City, town or post office, and Btate

1 Election — As an eligibleexpenditures to Influenceall subsequent tax years

Note: This election must

2 Revocation — As an eltgllrelating to expenditures t

Note: This revocation mi

Under penalties of perjury, |on behalf of the above nam<

(Signature of offic

ction/Revocation of Election by an EligibleSection 5Ol(c)(3) Organization To Make

Expenditures To Influence Legislation(Under Section 5O1(h) of the Internal Revenue Code)

mail Is not delivered to street address)

For IRSUse Only Employer identification number

Room/suit©

ZIP + 4

organization, we hereby elect to have the provisions of section 501 (h) of the Code,eglslatlon, apply to our tax year ending . . .. .-ntil revoked. (Month, day. and year)

e signed and posrmaritecf within the first taxable year to which It applies.

e organization, we hereby revoke our election to have the provisions of section 501 (h) ofInfluence legislation, apply to our tax year ending . . . .

(Month, day. and year')if be signed and postmarked before the first day of the tax year to which It applies.

declare that 1 arn authorized to make this (check applicable box) 1 1 election Qd organization.

relating toand

the Code,

revocation

sr or trustee) (Type cr print name and title) (Date)

General InstructiSection references are to thRevenue Code.Section 501 (c)(3) states thaorganization exempt underwill fose Its tax-exempt statqualification to receive deducharitable contributions If apart of Its activities are carrlinfluence legislation. Sectiohowever, permits certain el501 (c)(3) organizations to ellimited expenditures to lnflu<legislation. An organizationelection will, however, be sexcise tax under section 49spends more than tha amopermitted by that section. Alorganization may lose Its exIf Its lobbying expenditurespermitted amounts by moreover a 4-year period. For an;which an election under seIn effect, an electing organlzreport the actual andof Its lobbying expendituresroots expenditures (as defi4911(c)) on Its annual returnunder section 6033. Sea Se(Form 990 or Form 990-EZ)electing member of an afflllmust report these amountsand the affiliated group as

permit! )d

nsInternal

inat sectionand Its

tlbleubstantlalid on to501(h),ble1 to makece

laklng theect to anif It

tso, thempt statusceed the

han 50%tax year In

on 501 (h) Istion must

amountsnd grassd In sectionsquired9dule A:ached groupr both Itself

To make or revoke the election, enterthe ending date of the tax year to whichthe election or revocation applies In Item1 or 2, as applicable, and sign and datethe form In the spaces provided.Eligible Organizations.—A section501(c)(3) organization Is permitted tomake the election if It Is not adisqualified organization (see below) andIs described In:1. Section 170(b)(1)(A)(ii) {relating to

educational Institutions),2. Section 170(b)(1)(A)(IH) (relating to

hospitals and medical researchorganizations!.

3. Section 170(b)(l)(A)(lv) (relating toorganizations supporting governmentschools),

4. Section 170(b)(1)(A)(vl) (relating toorganizations publicly supported bycharitable contributions),

5. Section 509(a)(2) (relating toorganizations publicly supported byadmissions, sales, etc.), or

6. Section 509(a)(3) (relating toorganizations supporting certain typesof public charities other than thosesection 509(a)(3) organizations thatsupport section 501(0) (4). (5), or (6)organizations).

Disqualified Organizations.—Thefollowing types of organizations are notpermitted to make the election:a. Section 170(b)(1)(A)(l) organizations

(relating to churches).

b. An integrated auxiliary of a church orof a convention or association ofchurches, or

c. A member of an affiliated group oforganizations If one or more membersof such group Is described In a or bof this paragraph.

Af f III a ted Orga nlza tl ons.—Org an Izat Ionsare members of an affiliated group oforganizations only If (1) the governinginstrument of one such organizationrequires It to be bound by the decisionsof the other organization on legislativeIssues, or (2) the governing board of onesuch organization Includes persons (I)who are specifically designatedrepresentatives of another suchorganization or are members of thegoverning board, officers, or paidexecutive staff members of such otherorganization, and (II) who, by aggregatingtheir votes, have sufficient voting powerto cause or prevent action on legislativeIssues by the first such organization.

For more details, see section 4911and section 501 (h).Note: A private foundation (Including aprivate operating foundation) Is not aneligible organization.Where To File.—Mall Form 5768 to theInternal Revenue Service Center, Ogden,UT 84201-0027.

Cat. No. 12125M Form 5768 (Rev. 12-2004)

1o/;Michigan Nonprofit Association

Advocacy lil:What You Must Know About

Nonprofit AdvocacySEPTEMBER 21, 2fl§

Nonprofit Day 2«1«: Leading for ChangeLANSING, MI

The question is not

'Should we d® advocacy?"

but

"Can we afford not to?"

What is ADVOCACY?

Avenues of Change:Common Targets

Organizing

EducateLegislators

•v X

' ^Get to KnowLegislators

PublicEducation

PARTISANPOLITICAL

EducationalConferences

Research

NonpartisanVoter Ed.

LobbyingExceptions

LOBBYING

Training

Organizea Rally

RegulatoryEfforts

Litigation

Avenues for ADVOCACY

NATIONAL PREACH-INON GLOBAL WARMING

IV

Factors Affecting Success

Why ADVOCACY?

VICTORY! Lilly Ledbetter Fair Pay Act PassesSenate and House!VICTORY! It's been a long road to pass the Lilly Ledbetter Fair Pay Act, and now we'renearly there! On January 22,2009, the US Senate passed the Lilly Ledbetter Fair PayAct, joining the House of Representatives. President Obama has spoken out in supportof the Ledbetter Fair Pay Act and is expected to sign the Act into law very soon.

The Voices of Moms Helped Reach This Important victory: MomsRising respondedimmediately when the Court made its harmful decision In the Leaoetter v. GoodyearTyres case in P-lay of 2007 stating that pay discrimination claims must be made within180 days after the pay Is initially set (which effectively gutted the ability to holdemployers accountable when they pay women less than men-even if the discriminationcontinues for years). Since then, MomsRIsing members have been deeply andconsistently active in the fight to restore and improve pay equity laws.

Your persistence paid off. By the numbers, here is what you accomplished

Letters to Legislators: A whopping 84,557 Letters to the U.S. Senate and House infavor of this legislation.

Resumes: MomsRising members sent In and delivered nearly 9,000 resumes toSenator John McCain's office after he refused to support this legislation, saying thatwomen don't need fair pay, they need "more education and training."

Systemic CHANGE

for Passing SCHIP and StandingUp for America's Values

PROTECT funding

BUM TOYDH1TB FOR

Foster DISCUSSION

mW iilP

* •ii "*I'*' '

M ' * , jr»Jft ft

EMPOWER Constituents

Foster DISCUSSION

EMPOWER Constituents

How much LOBBYING?

INSUBSTANTIAL PART TEST

T7] What is "insubstantial"?

~27] Default test

~37[ Activities-based

4. Lobbying not defined

~57[ Penalty

or501(H) EXPENDITURE TEST

Dollar-based limits

One-time election - IRS Form 5768

3. Expenditures only

4. Definition of lobbying

Penalty less severe

Direct-Communication-With a legislator- Expressing a view

about specific legislationGrassroots

-Communication-With the general public- Expressing a view

about specific legislation-Includes a "call to action'

What is LOBBYING?

Specific Legislation

30/60 Day NoticeHB 2484

Protect current state funding for key programs, such a

Talking Points

WeVe developed a set of key messages that you canincorporate into your letters. One tip Is to keep your letter short,concise and make It personal by giving an example of how theshortage of affordable housing has impacted you, yourcommunity or someone you know.

• Everyone needs housing—a roof over theirhead.• Affordable housing is good for the economy—it helps

people get jobs and keep them.- Your grandparents and other seniors shouldn't have to

worry about having a place to live.

* Without enough affordable housing, the whole communitysuffers.

m • •*" j Businesses can!find enough employees wno can affordIII If ACT in I)HI* HifiC toliveneartheirworkplace.ltisdifficulttorecruitand•HYO91111 uui niua retalnemptoveeswh^n,hereisashortageoraftordabie

housing.Homelessness forces children into unstable anduncertain lives. With a stable home, a child is able tofocus on learning without worrying about moving duringthe school year.Seniors and persons with special needs on fixed incomesmay have to sacrifice their basic needs in order to affordrent. Imagine choosing between food and a roof over yourhead.

* Investing dollars and other resources in nonprofits is aninvestment in stable neighborhoods, which hElps promoteself-sufficiency. The pay-off is more productive people whoare less dependent upon remedial and governmentassistance.

Strengthen our Schools

The Emergency Food Assistance Program (EFAP)$393,000 to support the General Administration Food Programs that leverage miUiofederal funding, food, and operational supportState contributions to WIC and for the WIC Farmers Market Nutrition ProgramWashington Grown Fruits and Veggies Grant initiated by Local Farms Health KidsState funding that insures access to school, summer, and child care meals

Leaving off a call to actionCommenting on rules and regulationsLitigationAsking for an Executive OrderAsking for enforcement of existing laws

Not LOBBYING

Nonpartisan analysis, study, or research•Technical advice or assistance•Self defense•Examinations and discussions of broadsocial, economic, or similar problems

Lobbying EXCEPTIONS

WEST COASTAlliance For Justice

1611 Telegraph AvenueSuite 1006

Oakland, CA 94612510-444-6070

EAST COASTAlliance for Justice11 Dupont Circle, NW2nd FloorWashington, DC 20036202-822-6070

forf; let

dvocacy@afj.orc866.675.6229www.afj.org \s and publications