1. Training Module 9: Nonprofit Organizations & Political Activities Presented by the Southern Early Childhood Association

2. Topics to be Presented… Nonprofit organizations and lobbying Reasons to lobby for your cause The 501(h) election Lobbying limits Direct vs. grassroots lobbying Reporting lobbying expenditures Political Action Committees

3. * DISCUSSION * In what types of political activities does your organization typically engage? Who participates in these activities? In what areas of political activity do you feel your association should take a greater role? How might it do this?

4. Nonprofit Organizations & Lobbying Organizations have an interest in the formation of public policy. For some nonprofits, advocacy is the most important service they provide. 501(c)(3) organizations are banned from engaging in political campaign activities and are limited in the conduct of lobbying activities.

5. * DISCUSSION * Are you aware of any restrictions placed upon your organization’s political activities because it is classified by the IRS as a charitable or educational organization? Who in your organization is responsible for ensuring compliance in this area?

6. Ten Reasons to Lobby for Your Cause 1.You can make a difference. 2.People working together can make a difference. 3.People can change laws. 4.Lobbying is a democratic tradition. 5.Lobbying helps find real solutions.

7. Ten Reasons to Lobby for Your Cause 6. Lobbying is easy! 7. Policymakers need YOUR expertise. 8. Lobbying helps people. 9. The views of local nonprofits are important. 10. Lobbying advances your cause and builds public trust.

8. * DISCUSSION * What is your organization’s view on lobbying? How active has it been in the past in terms of lobbying? Do you think your organization should be placing more or less emphasis on this type of political activity in the future?

9. Lobbying is… …any attempt to influence specific legislation. Legislation is a bill that has been introduced (or will be introduced) in any legislative body, such as a city council, state legislature, or Congress.

10. What is NOT lobbying? 1.Self-defense 2.Technical advice 3.Non-partisan analysis or research 4.Examinations and discussions of broad social, economic and similar problems 5.Regulatory and administrative issues

11. * DISCUSSION * Looking at your association’s past activities, what initiatives or events count as lobbying, based on the definition provided by the IRS? Does your organization have a clear understanding of what constitutes lobbying?

12. The 501(h) Election 501(c)(3) nonprofits that elect to fall under these rules can spend up to a defined percentage of their budget for lobbying without threatening their tax-exempt status.

13. Benefits of Taking the 501(h) Election No limit on activities that don’t require expenditures Clear definitions of types of lobbying communication Higher lobbying dollar limits No personal penalty for exceeding limits

14. * DISCUSSION * If your organization is currently classified as a 501(c)(3) organization by the IRS, has it officially filed for the 501(h) election? If not, why might it be a good idea for your organization to file this paperwork?

15. Direct vs. Grassroots Lobbying This is an important distinction, as grassroots lobbying is limited to a greater extent than direct lobbying. Direct Lobbying Grassroots Lobbying

16. * DISCUSSION * In examining your association’s past political activities, which activities would be considered “grassroots” lobbying, and which would be considered to be instances of “direct” lobbying? On what evidence are you basing this distinction?

17. Reporting Lobbying Expenditures Annual reporting to the IRS is required by law, and is part of the annual IRS Form 990 filing. It is the association’s responsibility to maintain records of direct and grassroots lobbying expenditures. Allocation of “mixed” activities is specified in the IRS regualtions.

18. * DISCUSSION * Who within your organization is in charge of reporting your lobbying expenditures to the IRS? Is this requirement adequately fulfilled, or is there confusion regarding the reporting process?

19. Association Political Action Committees (PACs) Reasons for Forming an Association PAC: 1.To direct campaign funds to candidates 2.To present legislative positions 3.To counterbalance opposing associations 4.To take advantage of higher limits 5.To involve association members in the political process

20. * DISCUSSION * If your association does not already have a political action committee, why might it want to form one? Who in your organization has the authority to make the decision regarding PAC formation? Does everyone clearly understand the regulations placed on PACs by the federal government?

21. Resources consulted for this presentation: www.BoardSource.org Jerald Jacobs. Association Law Handbook. American Society of Association Executives, 1996. Minnesota Council of Nonprofits Ohio Association of Nonprofit Organizations Jeffrey Tenenbaum. Association Tax Compliance. American Society of Association Executives, 1996.

22. Any final thoughts or questions?