Identifying Lobbying and Political Activity for Nonprofits: Excluded and Allowed Activities

Substantial participation in lobbying activities can jeopardize a nonprofit organization's tax-exempt status. The IRS states that, "In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status."  And additionally, "all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office."

At the same time, specific organizations, social welfare organizations under Section 501(c)(4), for example, can participate in some political activity. By contrast, private foundations are prohibited from participating in lobbying activities. Somewhat surprisingly, the IRS announced this year that houses of worship can endorse specific political candidates.

The rules that differentiate between advocacy, lobbying, and political activities, as well as the levels at which each tax-exempt entity is allowed to participate, are complex. Nonprofit administrators and advisers need to understand the guidelines for lobbying and political activities for tax-exempt organizations. 

Listen as our tax-exempt expert explains the lobbying and advocacy rules for nonprofit organizations.

I. Identifying lobbying and political activities: introduction

II. Defining and distinguishing activities

A. Advocacy

B. Lobbying

C. Political activity

III. Political activity determinations by 501(c) type

IV. Activities excluded from lobbying

V. Allowed activities

VI. Measuring lobbying activities

VII. NPO sanctions for political activity

VIII. Best practices

The panel will cover these and other critical issues:

• Differentiating between advocacy, lobbying, and political activities
• Activities that are excluded from the definition of lobbying
• Roles nonprofits can play without jeopardizing their tax-exempt status
• Measuring activity under the substantial part test

Learning Objectives

After completing this course, you will be able to:

• Identify key differences between lobbying and advocacy
• Determine what advocacy roles nonprofits can safely play
• Decide which activities are excluded from lobbying
• Ascertain how allowed political participation varies based on an organization's 501(c) classification

• Field of Study: Accounting
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite:

  Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of cost allocation principles; familiarity with government standards for nonprofit organizations receiving federal grant monies

  
  

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IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).