In the wake of the election, many organizations may be more motivated than ever to advocate for their beneficiaries. Advocacy is an important tool for 501(c)(3) organizations and should not be overlooked! Here are the basics on the federal and Wisconsin rules that apply to advocacy for 501(c)(3) organizations.
Federal rules allow 501(c)(3) “public charities” to participate in many different kinds of advocacy, ranging from educating on the issues to actual lobbying. Advocacy, such as educating policymakers and the public about broad social issues, is unrestricted and unlimited for 501(c)(3) public charities. Advocacy becomes “lobbying” when it is connected to specific legislation, either as “direct” or “grassroots” lobbying. It that case, it must be an “insubstantial part” of a 501(c)(3)’s activities. Keep in mind that political activity – that is, the support or opposition for a candidate for public office – is not “lobbying” and is always prohibited.
“Direct lobbying” is any attempt to influence legislation through communication with any member or employee of a legislative body or with any government official or employee – local, state or federal – who may participate in the formulation of legislation. Direct lobbying includes the development, drafting, introduction, and modification of legislation.
“Grassroots lobbying” is an effort to influence legislation by attempting to affect public opinion with respect to the legislation and directing the audience to take action with respect to specific legislation (e.g., contact their legislator).
Generally, 501(c)(3) organizations that do any kind of lobbying should make the “501(h) election,” which provides parameters for the “insubstantial” test and enables an organization to spend up to 20% of their annual budget on lobbying, depending on their total budget. See: https://www.irs.gov/charities-non-profits/lobbying
As you consider lobbying, keep in mind that many activities are permissible. Advocating for the passage or defeat of a referendum is lobbying, not political activity. So is advocating for the confirmation or defeat of federal judges. Testifying before a school board or zoning commission is neither lobbying nor political.
In addition to federal rules, keep in mind that 501(c)(3) organizations must also comply with Wisconsin lobbying laws. If an organization employs a person (either staff or consultant) to lobby in Wisconsin on five or more days during a six-month period, both the organization and the individual must register and report with the state. See http://gab.wi.gov/lobbying/register-report/registration