Lobbying is the act of working to influence legislative or administrative decisions. Any activity by a charity relating to proposed or pending legislation or molding public opinion on legislative matters could qualify as lobbying. Lobbying can be done either professionally or on a certain issue by passionate members of the community. There are many organizations that are formed for the purpose of lobbying on behalf of a community or a cause. While this sort of advocacy is often motivated by the same desires to see change that motivate non-profits, the two activities have very little legal overlap. This is because the actions of a non-profit are meant to benefit the public, not just a segment of the public with a particular political view. A non-profit that has qualified for a 501(c)(3) exemption is prohibited from all lobbying efforts except for those that are “insubstantial”. And to be permitted to do so, the 501(c)(3) organization must submit a 501(h) election, available as Form 5768.
However, a 501(c)(3) organization is expressly prohibited from participating or intervening in any political campaign on behalf of, or in opposition to, candidates for public office. If a non-profit wishes to engage in a moderate to extensive amount of lobbying, they can still qualify for tax exemption as a 501(c)(4) action organization. The downside to being a 501(c)(4) is that donations to a 501(c)(4) organization are not tax deductible to the donor. For more information about applying for and your lobbying rights as a 501(c)(4) organization, please see the IRS’s web page about Social Welfare Organizations.
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