The government must be viewed as a critical partner because of the long-term implications of policies, regulations and funding. The depth and reach of the government’s investment in social service requires that any serious player in this field be at the table to affect decision-making as an advocate for community needs.
Being active in the area of public policy is also a key element of being a community leader. With our trusted reputation and extensive work in the community, United Way is generally seen as an expert on our community’s needs and services. Along with our community partners - both business and social service agencies - we can provide elected officials with our expertise and perspective, leading to better policies and regulations that impact our community.
Decisions by State and Federal Legislatures directly or indirectly impact our neighborhoods and the people living in them. From welfare reform to tax deductibles, these issues affect United Way’s ability and effectiveness in building a strong, healthy community.
In an era that finds nonprofits assuming greater responsibility for meeting human service needs, our goal is to engage and educate decision-makers and policymakers at the local, state and national levels as we call the general public’s attention to our community’s most important issues.
Federal Tax Laws allow 501(c)3 organizations to lobby, yet restricts lobbying to “no substantial part of the activities shall be carrying on of propaganda or otherwise attempting to influence legislation.” While lobbying is limited to no “substantial part” of an organization’s activities, neither Congress nor the IRS has defined what a “substantial part of their activities” means.
In 1976, Congress created a 501(h) Election, an alternative option that nonprofits can “elect” to use, but does not automatically replace the “substantial test”. The 501(h) Election clearly defines what lobbying is (and is not) and sets a generous dollar amount on how much a nonprofit can spend on lobbying.
Within the definition of “Lobbying”, several legislative-related activities were excluded, such as:
- “Self-defense lobbying”, or speaking with Legislators on matters that may affect the organization’s existence, powers, tax exempt status, etc.
- Communication to an organization’s members on specific legislation as long as the organization does not specifically encourage members to contact Legislators. It still is not considered lobbying even if the organization does take a stance on the issue.
- Expert testimony specifically requested from a Legislative body on pending legislation.
- Lobbying to influence regulations and other non-legislative matters.
- Making available results of nonpartisan analysis, study or research on a legislative issue.
- Policy discussions on broad social, economic, or policy issues, which would require legislation to solve.
- Lobbying by volunteers for which the organization does not incur expenses.
The 501(h) Election created an “expenditure test”, setting limits on the amount an organization can spend on lobbying based on their total expenditures. An organization may spend up to 20% of your organization’s first $500,000 of annual expenditures, 15% of next its $500,000, 10% of the next $500,000, and so on, up to $1 million.
501(c)3 organizations are prohibited from endorsing, opposing and/or contributing to candidates and political parties.
For more information, visit the Center for Lobbying in the Public Interest.