Transcript Training Module 9: Nonprofit Organizations & Political

Training Module 9:
Nonprofit Organizations &
Political Activities
Presented by the
Southern Early Childhood Association
Topics to be Presented…
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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
* 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?
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.
* 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?
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.
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.
* 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?
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.
What is NOT lobbying?
1.
2.
3.
4.
Self-defense
Technical advice
Non-partisan analysis or research
Examinations and discussions of broad
social, economic and similar problems
5. Regulatory and administrative issues
* 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?
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.
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
* 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?
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
* 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?
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.
* 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?
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
* 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?
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.
Any final thoughts or questions?