Advocacy vs. Lobbying: A Legal Guide for Nonprofits

By Dr. Mark Smutny, President of Civic Reinventions, Inc.

Nonprofits play an invaluable role in shaping society, fostering change, and giving voice to those often unheard. Among their most powerful tools are public policy advocacy and the strategic engagement of decisionmakers. Yet, navigating the difference between legally permitted advocacy and federal restrictions on lobbying is essential to safeguard an organization’s nonprofit status.

Understanding Advocacy?

Advocacy encompasses a wide range of activities intended to influence public opinion, policy decisions, and community awareness. Nonprofits can engage in advocacy efforts without fear of violating federal regulations. Examples of acceptable advocacy include:?

• Educating the public and policymakers about issues aligned with the nonprofit’s mission.?
• Sharing nonpartisan research or reports on public concerns.?
• Mobilizing communities to participate in civic activities like voting.?

What About Lobbying??

The IRS defines lobbying as an attempt to influence legislation through direct communication with legislators or urging the public to take action. While nonprofits can engage in lobbying within specific limits, exceeding these limits can put an organization’s tax-exempt status at risk. Key points to remember include:?

• Direct Lobbying involves directly communicating with legislators to support or oppose specific legislation.?
• Grassroots Lobbying involves encouraging the public to contact legislators about specific legislative proposals.?
• To remain compliant, nonprofits must ensure their lobbying activities fall within thresholds set by the IRS, either under the “substantial part test” or by electing to follow the more precise “501(h) expenditure test.”

Why the Distinction Matters?

The boundary between advocacy and lobbying is both nuanced and critical. Advocacy is often a nonprofit’s primary method to raise awareness and effect social change. Lobbying, when used thoughtfully and within legal bounds, can amplify this work. Understanding these distinctions allows nonprofits to:?

• Maximize their influence in shaping public policy.?
• Protect their 501(c)(3) status and ensure compliance.?
• Build trust with stakeholders, donors, and communities.?

Tips for Staying Compliant?

1. Educate Your Team: Train staff and volunteers on advocacy and lobbying rules to avoid missteps.?

2. Track Lobbying Activities: Maintain clear records of time and expenditures related to lobbying.?

3. Consider the 501(h) Election: This IRS option provides clearer expenditure thresholds and reduces uncertainty.?

4. Consult Experts: When in doubt, seek legal or professional guidance to navigate complex situations.?

Conclusion?

At Civic Reinventions, Inc., I’ve witnessed firsthand the transformative power of advocacy in nonprofit work. By understanding and respecting federal guidelines, organizations can continue to serve as catalysts for change while remaining compliant. Advocacy and lobbying are tools for justice and progress—when used wisely, they can move mountains.

Let us engage boldly, ethically, and strategically. Together, we can foster a society where every voice is heard, and every cause has a champion.

Contact:

Dr. Mark Smutny, President of Civic Reinventions, Inc.

• Email: [email protected]
• Website: https://civicreinventions.com
• Phone: 626-676-0287
• LinkedIn: https://www.dhirubhai.net/in/marksmutny/

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