Advocacy, Lobbying and Non-profits
If your organization is a nonprofit 501(c)3 and you want to get involved in advocacy, but you are worried about what that means for your tax status, then you have come to the right page.
Many non-profits assume that lobbying activities will negatively impact their tax-exempt status. This is not necessarily the case, however.
This page is designed to give you the basic information you need to feel comfortable about what you can do and how to keep track of what you are doing when you get involved in advocacy and lobbying. This is not a complete guide, and the Alliance for Justice and the NC Center for Nonprofits can give more information.
First of all - not all advocacy is lobbying!
Direct Lobbying is defined by the IRS as a communication to a legislator expressing a point of view on a specific piece of legislation.
Grassroots lobbying is defined as a communication to the general public that expresses a point of view about a specific piece of legislation that has a call to action.
- Note that "Special Purpose" boards like Planning Boards, Zoning Commissions and School Boards are not considered legislators.
- Also members of the "General Public" are considered legislators when they are voting on ballot initiatives, referenda, bonds and constitutional amendments.
So long as non-profits adhere to certain guidelines, the IRS actually encourages lobbying and other advocacy activities.
By completing a simple, one-page form with the IRS stating that your organization is making the "501(h) election," your organization can spend up to 20 percent of its budget on lobbying activities intended to influence legislation.
While the 20 percent limit is based on the amount of money your organization can spend, there are no limits on the amount of volunteer and other cost-free activities your organization can undertake.
Other types of policy work, including litigation, research, public education, and attempting to influence administration agencies' decisions are also not limited.
For more information on lobbying and non-profits, definitions, expenses, etc., click here to download a .pdf version of Alliance for Justice's informational brochure on lobbying and non-profits. They also have additional information on lobbying on their website.
The NC Center for Nonprofits also has information on lobbying and the new lobbying reform legislation passed in the general assembly last session. It is likely more reform legislation will occur, so check back with them periodically to stay up to date on what is happening. Click here to visit the Advocacy and Public Policy section of their website.
For a summary of NC’s new Ethics and Lobbying Reform Law, click here.