Transcript ALLIANCE FOR JUSTICE

Funding Advocacy: What’s Legal,
What Works
11 Dupont Circle, NW • 2nd Floor • Washington, DC 20036
202-822-6070 • www.allianceforjustice.org
May 8, 2003
We all understand that foundations are
feeling the pinch, but it’s more important in
tough times than in easy times to support
advocacy work, because very hard decisions
have to be made in tough times.
Marcia Avner, Public Policy Director
Minnesota Council of Nonprofits
Examples of Advocacy
Foundations Can:
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Research, educate, and lobby in certain cases
Convene meetings of nonprofits & funders around
issues
Depending on content, submit op-eds or letters to
the editor
Develop advertising campaigns
Talk to the media
Testify before the legislature in certain cases
Research –
W.K. Kellogg Foundation
Convene Meetings – The Minneapolis Foundation
The Minneapolis
Foundation
engaged the
community and
seek solutions
to this alarming
crisis.
(2001) Let's Fix This, a public information campaign to
raise awareness of homelessness among Minnesota's
children.
Ad Campaigns
– California Wellness Foundation
Proposition 188 would have
“regulated” smoking in public
spaces. The ads revealed who
supported the proposition
(Phillip Morris, R.J. Reynolds
Tobacco Co., Brown & Williams)
and who opposed it (American
Cancer Society, American Lung
Association of California,
American Heart Association,
California Dental and Medical
Associations).
Proposition 188 was defeated.
Congressional Testimony
John, Sir Elton, chairman, Elton John AIDS Foundation, CA
Foundation - Limitations
Public
Private
Lobbying
Limited
Taxable
Electoral
Activities
No
No
partisan electioneering
Expenditure
partisan electioneering
 Special voter registration
rules
Direct & Grassroots Lobbying
Direct Lobbying
Grassroots Lobbying
Communication
Communication
Legislator
General Public
(Includes public for ballot measures)
Expressing a View
Expressing a View
About Specific Legislation
About Specific Legislation
Call to Action
Legislators
26 C.F.R. § 56.4911-2(b)(1)(i)(A)
Representatives and their staff
Federal
Members
of
Congress
State
State
Assembly
Members
Local
City
Council
Members
Ballot Measures
Members of the general public
vote directly on these
legislative actions, therefore they
are treated as LEGISLATORS
Work on:
ballot initiatives
referenda
constitutional amendments
bond measures
LOBBYING
Lobbying Limits
Default Test
 Lobbying must be an “insubstantial part” of overall
activities
 Includes cost-free activities
501(h) Expenditure Test
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Clear dollar-based limits ($1 million cap)
Clear definition of lobbying
Private foundations
Must elect with Form 5768
cannot elect
Calculating Lobbying Limits
Sample 501(c)(3) making the 501(h) election with $2 million budget
20% x $500,000 = $100,000
15% x $500,000 = $ 75,000
10% x $500,000 = $ 50,000
5% x $500,000 = $ 25,000
TOTAL LOBBYING $250,000
Grassroots Total: 25% X 250,000 = $62,500
Lobbying Exceptions
Nonpartisan Analysis, Study, or Research
Full and fair discussion of the issue
 Broadly disseminated
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Can express a view and have indirect call to action
Technical Advice or Assistance
Request must be in writing
Made by a government body, committee,
subdivision
Self Defense
Communication about legislation that might
affect the foundation’s:
Powers and duties
Tax-exempt status
Deduction of contribution to the foundation
DEFENSIVE USE
“Increase payout”
PROACTIVE USE
Repeal of excise tax on private
foundation investment income
Examinations and Discussions of Broad
Social, Economic, and Similar Problems
FUNDING ADVOCACY
Public and private foundations can fund
advocacy.
Private foundations cannot earmark grants
for lobbying, without incurring a taxable
expenditure.
EARMARKING:
Give pursuant to an agreement,
oral or written, that the grant
will be used for specific purposes
Private Foundation Safe Harbors
The tax code includes rules specifically
for general support and project grants
from private foundation grants to
support advocacy
General Support Grants
General
Support
Grants to
501(c)(3)’s
Most
Support
Grant is NOT
a taxable expenditure
even if used
to lobby
Budget review not required
Specific Project Grants
Private
Grant amount may not exceed
Foundation:
non-lobbying expenditures in
Project Grants budget
to 501(c)(3)’s
$100,000 Single Year Project Budget
Specific Project Grant
from Private
Foundation #1
$50,000
Specific Project Grant
from Private
Foundation #2
$50,000
$50,000 < $60,000
No taxable expenditure
$50,000 < $60,000
No taxable expenditure
Grant Agreements
Grant Agreements
WARNING: Does your grant agreement contain the following language:
No portion of this grant shall be used to carry on propaganda, or
otherwise to attempt, to influence legislation, the outcome of any public
election…
Clauses that restrict the use of grant funds
for lobbying are unnecessary in grants to
public charities
MAKE YOUR CASE
Talk to your officers, directors, trustees and staff
about supporting public policy advocacy.
Lobbying is legal
Anything that compromises grantees’ efforts to influence
public policy diminishes their capacity to contribute to
society
DEFINE YOUR ADVOCACY GOALS
Consider:
The type and mix of advocacy you want to support
Communications that convey the foundation’s goals
(RFPs, website, annual reports)
RECOGNIZE ADVOCACY OPPORTUNITIES
Review grant agreements for restrictions
Make advocacy resources available to grantees
Take leadership on your issues (convene, research,
collaborate, educate)
Build Relationships
Collaboratives can be more effective than going it alone.
Sheltering Arms Foundation (MN):
Identify partners who have specific expertise and can keep on
top of issues on a daily basis.
Seek opportunities to align the Foundation with larger nonprofit
or advocacy coalitions that have the capacity to reach and
mobilize many people and organizations.
Consult with other foundations that have expertise and find out
what’s worked from their experience.
TAKE RISKS
There is more risk in doing nothing.
Risk Evaluation Criteria:
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Potential impact on the community/society
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Strengths and weaknesses of the organization
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Overall level of risk vs. return
ASK AN ATTORNEY
 Ask about experience representing
foundations/nonprofits
 Experience representing foundations/nonprofits
that fund or engage in lobbying
 Opinion on the appropriateness of such activities
CONTACT THE ALLIANCE FOR JUSTICE
We can train your staff, board, grantees
Provide technical assistance
Provide easy to understand print resources