This document discusses lobbying and nonprofits. It defines lobbying and the different types, such as direct lobbying and grassroots lobbying. It outlines the regulations around lobbying for charities and foundations, including the insubstantial test and optional expenditure test. The history of lobbying laws and regulations are covered, from the Revenue Act of 1934 to recent acts like Citizens United. State lobbying laws are also briefly discussed.

1. Lobbying and Nonprofits Sonya Durney LIS 437 Creating Social Change:

3. Objectives: Discuss lobbying treasury regulations foundations vs. charities When is lobbying is allowed? Highlight some interesting points in history All the while avoiding legal jargon!

5. Legislation - action by a legislative body; introduction, amendment, enactment, defeat or repeal of Acts, bills, resolutions, etc.

6. Legislative bodies - Congress, state and local legislatures, and the general public (referenda, initiatives, or proposed constitutional amendments)

7. Typically, they are not judicial, executive and administrative bodies such as school and zoning boardsLobbying….yes you can!

9. Grassroots lobbying -an attempt to influence legislation by stating a position on specific legislation to the general public and asking them to contact legislators or other government employees who participate in the formulation of legislation. Lobbying defined…

11. making available nonpartisan analysis, study or research

12. providing discussions of broad, social, or economic problems

13. Self defense (communicating with a legislative body regarding matters which might affect the existence of your organization)

14. updating the members of your organization on the status of legislation, WITHOUT a call to action. Lobbying is NOT…

16. These regulations, also known as the “Income Tax Regulations,” are located in Title 26 of the Code of Federal Regulations (C.F.R.)

17. The regulations are organized according to the Internal Revenue Code section that a regulation interprets. Treasury Regulations

18. Private Foundations Usually get funding from a single family or corporation Whereas, charities receive funds from a variety of sources Subject to more stringent IRC rules Allowed to give grants to lobbying charities, but must follow clear guidance provided.

19. History

20. We currently recognize: “responsible representative Government requires public awareness of the efforts of paid lobbyists to influence the public decision making process in both the legislative and executive branches of the Federal Government” 2 U.S.C. § 1601

21. "Congress shall make no law … abridging … the right of the people peaceably … to petition the Government for a redress of grievances." “Too much disclosure stifles with red tape and has a ‘chilling effect’ on free speech.”- Sen. Chiles (D-Fla) 1st Amendment

23. Sought to enlist the support and cooperation of legislators in repealing and amending statutes preventing birth control

24. Regulations provided that organizations formed to disseminate controversial or partisan propaganda” were not educational” within the meaning of the statute:

25. Treas. Reg. 45, art 517 (1919 ed.); T.D. 2831, 21 Treas. Dec. Int. Rev. 285

26. ABCL, therefore, did not meet lobbying qualifications (know as the Slee case)Margaret Sanger & The American Birth Control League

27. Operational Test The organization’s lobbying activities will be considered permissible if: The purpose of the organization is charitable The activities are not illegal, contrary to a clearly defined and established public policy, or in conflict with express statutory restrictions The activities further the organization’s exempt purpose and are reasonably related to the accomplishment of that purpose

29. Limits the lobbying activities of IRC 501(c)(3) organizations:

30. No “substantial part” of an organization’s activities may constitute “carrying on propaganda” or otherwise attempting to influence legislation

31. Represents a codification of the “Slee position” and a rejection of the strict Treasury point of view, as embodied in the 1919 regulationRevenue Act of 1934

32. Federal Regulation of Lobbying Act (1946) Required that lobbyists and the groups they represent register and report contributions and expenditures. The legislation contained many loopholes groups began to use the term "public education" to conceal monies spent on lobbying.

33. “This time it's the Grand Canyon they want to flood. Should we also flood the Sistine Chapel so tourists can get nearer the ceiling?” The Sierra Club…

34. 501(c)(3) to 501(c)(4)

35. Insubstantial ? What the heck does that mean?

36. Coalition of Concerned Charities the American Cancer Society, American Heart Association, Association of Schools of Public Health, Big Brothers of America, Campfire Girls Inc., Council for Advancement and Support of Education, Family Service Association of America, Goodwill Industries of America, National Audubon Society, National Council on the Aging, National Health Council, National Mental Health Association YWCA of the USA

38. Introduces H election (will discuss in a moment

39. Must report:

40. Estimate of money spent

41. Issues lobbied for

42. A statement of houses contacted

43. A list of employees who acted as lobbyists on behalf of the clientLobbying Disclosure Act (1976)

44. Expenditure Limits Insubstantial part test (1934) Enacted in 1934 Vague-applies facts and circumstances criteria 501(h) expenditure test (1976) Elect by filling out Form 5768 (suggested) Direct Lobbying:20% of the first $500,000 of its exempt purpose expenditures; 15% of the next $500,000, and so on, up to one million dollars a year. Grassroots Lobbying: 5% of the first $500,000 of its exempt purpose expenditures;3.75% of the next $500,000, and so on, up to $250,000 a year.

45. National endowment for the preservation of liberty IRC 501(c)(3) organization 1987, House Ways and Means Oversight Subcommittee Chairman J.J. Pickle announced that he was initiating an investigation The organization reportedly received funds from the Iran- Contra arms sales and used the money to finance conservative Congressional candidates in the 1986 campaign to run negative advertisements about Congressional incumbents who opposed aid to the Nicaraguan Contras NEPL also engaged in a considerable amount of grass roots lobbying to garner support for Contra aid The hearings resulted in the enactment of several statutes

47. These acts provide for further disclosure of lobbying activities

48. Concerns were raised about the capacity of Congress to oversee

49. lobbying activities

50. campaign finance practices

51. Congressional rules concerning gifts and support from lobbyists. Lobbying Disclosure Act of 1995

53. While not an ideal set of reforms; makes important advances in increasing accountability and transparency in Washington

55. Supreme Court ruling to deregulate corporate political spending

56. Equates corporate and individual First Amendment rights

57. Is the ban on partisan political activity for 501(c)3 charities now vulnerable to constitutional challenge?

58. Frees up nonprofit associations and social welfare groups to spend money directly on elections, (through voter guides, registration drives, get-out-the-vote activities, sponsoring candidate debates, etc)

59. Still trying to sort out….Recent developments…

60. State Legislation Besides these federal regulations, states may separately enact their own regulations governing state lobbying. Most lobby restrictions involve reporting and registration provisions similar to those in place at the federal level. For instance in Maine a lobbyist must wear a nametag!

62. CLPI promotes, supports, and protects 501(c)(3) nonprofit advocacy and lobbying to strengthen participation in our democratic society and advance the missions of charitable organizations.Center for Lobbying and Public Interest

63. Conclusion Nonprofits are a resource for millions; homeless, immigrants, senior citizens, the sick (with or without health insurance), and the countless others who all too often are overlooked in society. As government grows leaner, nonprofits can be called upon to do more work for the people. From a standpoint of good government, the best policy would promote communication between government and its vendors.

64. Many feel it is more important than ever that charities become involved in the public policy debate!

65. North Carolina Lobby Laws Unlike the IRS lobbying rules, N.C. law covers executive action as well as legislative action. Unlike the IRS lobbying rules, the N.C. rules only apply to lobbying with the N.C. state government, not the federal government or local governments. For purposes of the N.C. rules, developing goodwill with designated individuals counts as lobbying. Encouraging others to take action on legislation is grassroots lobbying under IRS rules, but it isn’t lobbying under the N.C. rules.