1. Lobbying vs. Advocacy August 30, 2016
Today we’ll talk about what constitutes lobbying versus what’s simply advocacy. We’ll talk about direct lobbying versus grassroots lobbying, and talk about what a c(3) can do versus a c(4). I’ll probably repeat myself quite a bit just to make the point, but hopefully I don’t contradict myself either.
There have been a lot of revisions over roughly a hundred years to lobbying laws and additions such as the lobbying disclosure act, which ensures that I as a lobbyist have to fill out a bunch of forms four times a year. But for our purposes the law dictates how much an organization can spend on lobbying, and the two categories they can use to determine how much lobbying they’re doing. I’m going to give you a lot more information than you need to know, which I hope doesn’t make this too overwhelming. Finally I want to emphasize that I am not a lawyer – I’m happy to provide advice but if you’re concerned something might cross the line from advocacy to lobbying, consult a lawyer.

2. Lobbying vs. Advocacy
Advocacy: a range of activities that seek to bring about systemic social change
Often seeks to address root causes as well as the symptoms of social and economic problems.
Action may include community organizing, public policy, and lobbying litigation, or nonpartisan voter engagement.
Lobbying: attempts to influence specific legislation through direct or grassroots communication with legislators or their staff.
Advocacy can occur without lobbying, but lobbying cannot occur without advocacy.
Lobbying is considered constitutionally protected free speech.
Let’s start with the difference between lobbying and advocacy. I’m going to commit a presentation faux pas - I’m going to give the key takeaway right at the beginning. And that is that lobbying, by definition, is an attempt to influence a specific piece of legislation. Advocacy is a broad range of activities around a certain topic, but doesn’t mention or push for specific legislation. I’ll cover that a few different times over the next half hour or so and in a couple of different ways, but that’s the key takeaway – Lobbying is an attempt to influence specific legislation, advocacy is more about awareness of a larger issue.

3. Lobbying vs. Advocacy
Companies and organizations spent $3.22 billion on lobbying last year. They do this because it works, as you can see in this headline, lobbying is a pretty sound investment.

4. Lobbying for 501(c)(3) “Insubstantial Part” test (vaguely defined)
Since 1934, the IRS dictates that “no substantial part of a charity’s activities… be carrying on propaganda or otherwise attempting to influence legislation. “Insubstantial” is not further defined.
Unfortunately, this has led many nonprofits to tiny amounts of lobbying.
2) “Expenditure” test or Section (501)(h) election (clearly defined).
Section h is recommended and easy to do – filing a simple one-page form (form 5768).
Provides clear definitions and generous ceilings.
Can be done at any time.
The IRS offers two ways to measure lobbying efforts, one very clear, the other remarkably unclear. First, the unclear version: 501(c)(3) orgs are only allowed “insubstantial” lobbying – but the IRS has never quite defined what that means, so many nonprofits fear that ANY lobbying is substantial. And that’s a shame. Just as it’s the duty of private citizens to make their opinions known to legislators, so it is with nonprofits. They have the right to speak to their legislators on issues of concern, and they shouldn’t be afraid to do so, but the way the system was set up makes them think they can’t.
Luckily the IRS also offers an expenditure test, also called a “section h.” It’s a simple one page form that helps you estimate how much you can spend on lobbying. I know this is complicated, but we’ll talk more about it. The important takeaway is the 501h election is considerably easier – it’s actually one of the most simple IRS forms in existence, and that the odds are very good you can lobby more than you think. Before we get into that though, we need to talk about what the IRS defines as two different kinds of lobbying

5. I want to get back to something I said earlier – that the amount spent on lobbying is always going up. Correspondingly, the number of lobbyists has gone down since its peak of about 15,000 in You’re probably wondering how that’s possible – how has the money on lobbying gone up but lobbyists have gone down?
The reasons are many but one of them is that more companies and associations are building their grassroots bases to get them involved. The most effective way to get a legislator to care about an issue is to get a constituent to talk about it – that’s much more powerful than anything a lobbyist can do, so companies and associations are beefing up their grassroots. But depending on how you do it, grassroots lobbying is still definitely lobbying.
I also want to make the point at this time that you probably don’t have to register as a lobbyist. I’ll show you where to find information on your state towards the end of the presentation, because I definitely don’t know enough about individual states to know whether you need to register or not – but unless you’re devoting a sizable chunk of your time to lobbying, it’s unlikely you’d need to register on the state level. On the Federal level you need to be spending 20% or more of your time lobbying, or over $12,500 per quarter on lobbying efforts. That’s a lot of time and a lot of money and quite frankly most groups don’t spend that much time or money on lobbying.
To get back to grassroots lobbying for a minute, though – so we have direct lobbying, where the lobbyist educates the legislators, and grassroots lobbying, where a person or organization educates the public, and asks them to reach out to their legislator. How lobbying is defined, in both cases, is fortunately quite liberal. Both of them, however, have limits.

6. Direct vs. Grassroots Lobbying
You are participating in grassroots lobbying when you state your position to the general public and ask them to contact legislators or other government employees who participate in the formulation of legislation.
An organization may spend only one-fourth as much on grassroots lobbying, as on direct lobbying. So, for example, if the group’s annual permissible lobbying expenditures were $100,000, it could spend only $25,000 on grassroots lobbying. But it could spend the remaining amount of $75,000 on direct lobbying
Both seek to influence specific legislation.
You are direct lobbying when you state your position on specific legislation to legislators or staff who participate in the formulation of legislation.
Generally, organizations (NOT c(3)s) that elect the 1976 lobby law may spend 20 percent of the first $500,000 of their annual expenditures on direct lobbying ($100,000), 15% of the next $500,000, and so on, up to one million dollars a year.
We’ll talk about different rules for c(3) and c(4) in a moment.
Here are the differences between direct and grassroots lobbying but again I want to emphasize that the rules are very very liberal in terms of what does or doesn’t constitute lobbying in either case, and you shouldn’t feel the need to write all this down and break out your calculator. Again, under the 501(h) expenditure test, there are two different types of lobbying: direct lobbying and grassroots lobbying. An organization that has made the 501(h) election may not spend more than one-quarter of its overall lobbying limit on grassroots lobbying. Direct lobbying is defined as any communication, with a legislator, that expresses a view about specific legislation. Grassroots lobbying is defined as any communication, with the general public, that expresses a view about specific legislation, and includes a call to action. 
I’ll give an example of what I mean - grassroots lobbying generally occurs only when you state your position to the general public AND ask them to contact legislators or other government employees who participate in the formulation of legislation. In other words, a call to action. The key to this liberal interpretation of grassroots lobbying is that you can state your opinion on legislation to the general public as strongly as you want and it is not lobbying as long as you don’t issue a call to action to the general public to contact legislators. In other words if there’s a tobacco tax coming up for a vote in my state, I can put billboards up everywhere saying “I support tobacco tax increases” and “smoking is very bad.” I’m not asking anyone to talk to their legislator about it, and I’m not stating an opinion on THE specific piece of legislation – I’m just stating my organization’s opinion. That’s simply free speech.

7. Specifics
Advocacy
Telling your member of Congress how a federal grant your organization received has helped your constituents.
Educating a member of Congress about the effects of a policy (but not a specific piece of legislation) on your constituency.
Inviting a member of Congress to visit your organization so that he/she may see firsthand how federal funding or a policy affects day-to-day operations and the difference it makes.
Lobbying
Asking your member of Congress to vote for or against, or amend, introduced legislation.
ing a “call to action” to your members urging them to contact their member of Congress in support of action on introduced legislation or pending regulations.
Preparing materials or organizing events in support of lobbying activities.
That’s a lot on lobbying – let’s get back to advocacy versus lobbying. Educating lawmakers and elected officials about a given issue is not lobbying, and does not need to be logged or reported. In this case you’re just advocating for your cause. If you talk to your legislators about the importance of financial aid, you’re not lobbying. If you talk about the work your organization does, you’re not lobbying.
Although most people use the words interchangeably, there is a distinction between advocacy and lobbying that is helpful to understand. When nonprofit organizations advocate on their own behalf, they seek to affect some aspect of society, whether they appeal to individuals about their behavior, employers about their rules, or the government about its laws. Lobbying refers specifically to advocacy efforts that
attempt to influence legislation. This distinction is helpful to keep in mind because it means that laws limiting the lobbying done by nonprofit organizations do not govern other advocacy activities.
The key word here is specific legislation – simply educating lawmakers and elected officials about an issue is not lobbying, and does not need to be logged or reported.
One final distinction that I’m sure some of you are already know – if you’re a state organization, you’re probably not doing lobbying OR advocacy, what you’re doing is probably labeled as education. This is also one of those terms that’s pretty loose and varies depending on which state you’re in – again I’ll give some insight as to where you can find state information near the end of my presentation.

8. Lobbying for 501(c)(3)
Lobbying activities include attempts to help pass or repeal legislation, as well as outreach to gain public support or opposition to legislation.
501(c)(3) nonprofits are limited to conducting only “insubstantial” lobbying efforts, determined by the size of the organization.
Typically, insubstantial means that you would allocate less than 10 percent of the nonprofits total operating budget – but the 501(h) election provides more leeway and is MUCH easier.
If the nonprofit is found to have engaged in substantial lobbying efforts, it will lose its exempt status.
These organizations are prohibited from supporting or endorsing any candidate for public office.
The really high 50,000 foot view of lobbying is that you should probably assume that you’re allowed to spend about 10 percent of your total operating budget on lobbying. By and large if you keep it within that range, you’re going to be ok. And of course, if you’re a c3, don’t endorse any candidate for public office.

9. Lobbying for 501(c)(3) YOU CAN’T:
Educate elected officials on issues of concern in the financial aid space
Arrange meetings with elected officials to learn their views on student aid
Invite elected officials to meetings of the organization to talk about financial aid
Send literature on financial aid to elected officials
YOU CAN’T:
Endorse or oppose candidates for public office
Collect or distribute funds for political campaigns
Give candidates your mailing lists
Donate the use of your facilities for political fundraising
Here it is in a little more black and white terms. I want to emphasize at this point that you can do just about any of the things listed here as a private citizen – as long as you’re not wearing your work hat of course you can support campaigns. But it’s vital – hugely hugely important – that you don’t cross the streams. Don’t use your work for campaign materials or when you make a contribution. Don’t put anything on work letterhead. Anything under that YOU CAN’T column has to be done on your time and with your own funds and materials.
Let’s talk for a minute about legislator visits since we’re in an election year. Rules can be very very funny this time of year. The distinction you need to make is is the legislator doing the visit as the incumbent or as a candidate? I’ll guarantee you that their schedulers will ask that same question because they have legal rules around what they can do too. In most cases you want to make sure the legislator is visiting as an incumbent – your representative – rather than a candidate. If they come as a candidate, you’re subject to different rules which say, in a nutshell, that you need to invite ALL other viable candidates for the same office at some point. There are rules which say you have to give equal time to all viable candidates.
So you’re inviting them as a public figure – they were chosen to speak solely for reasons other than their candidacy and speak only in a non-candidate capacity. There can be no mention of their candidacy during the presentation or event – again, in most cases they’ll know the rules and abide by them. But you must keep the atmosphere entirely nonpartisan and free of campaign activity - there can be no campaign brochures or other materials are not out on a table and your guests absolutely can not have campaign signs with them.

10. Lobbying for 501(c)(4)
501(c)(4) organizations may engage in unlimited lobbying and promotion of candidates, provided that these efforts fall with the purpose of the organizations.
Qualification judged by activates over the entire tax year.
Now c(4)s are more political entities, that’s essentially why they’re created.
In 2010, in a case that’s come to be known as Citizens United, the Supreme Court struck down governmental restrictions on corporations’,including nonprofits’, spending general treasury funds for independent public communications that “expressly advocate” the election or defeat of clearly identified federal candidates and those that qualify as “electioneering communications.
Prior to Citizens United, virtually all corporations were prohibited under federal law from engaging in express advocacy to the general public.24 While corporations could spend funds on independent public communications with election-related messages, they could not engage in express advocacy in these communications. They could also communicate with their bona fide members on any subject including express advocacy. The Citizens United decision permits 501(c)(4)s to make independent expenditures but did not change the limits on political activities imposed by the tax rules. I should have mentioned first that political activities may not be a 501(c)(4)’s primary purpose and that funds they use for political activities may be taxable.
The other thing to know about c4s – especially in an election year – is that while they can’t contribue to an individual or that individual’s PAC, they can contribute to a super PAC. That’s why a lot of c4s pop up every election season since Citizens United.

11. Tax on foundation & managers Insubstantial Part or 501(h)
501(c)(3)
Private Foundation
501(c)(3)
Public Charities
501(c)(4)
Examples
Tax-Exempt
Tax-Exempt
Tax Treatment
Contributions
tax-deductible
Contributions
tax-deductible
Tax-Exempt
PROHIBITED
Tax on foundation & managers
LIMITED
Insubstantial Part or 501(h)
Lobbying Activities
Unlimited
Cannot support or oppose a candidate
for office
Cannot support or oppose a candidate
for office
Secondary activity
Electoral Activities
Follow federal and
state election law

12. State Rules Differ
It’s also important to know the rules if you’re advocating on the state level. Every state has different – and sometimes incredibly specific – rules for what constitutes lobbying versus advocacy, and a lobbyist as opposed to a public citizen. The National Conference of State Legislatures provides a wealth of information on this topic at the URL on the screen.