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Jan 10, 2025

Lobbying for Nonprofits: What You Need to Know

Lobbying can be a powerful tool to advance your mission and amplify the voices of the communities you serve. But nonprofits often find themselves navigating a murky area between advocacy and compliance. “Can we say this?” “Will this jeopardize our tax-exempt status?” If this sounds familiar, you’re not alone! Nonprofit leaders across the country share these concerns. The good news is that nonprofits can engage in lobbying, as long as they follow the rules.

While the rules may seem intimidating at first, they don’t have to hold you back. With a clear understanding of the guidelines, the right resources, and a little practice, you can confidently advocate for policies that align with your work. Nonprofits have an important role in advocacy, and there are many tools available to help you. Keep reading for some general guidelines, tips and resources.

What is Lobbying?

Lobbying is when your organization tries to influence legislation. This could mean contacting lawmakers to ask them to vote for (or against) a bill, organizing your supporters to reach out to legislators, or publishing materials that take a stand on pending legislation.

Advocacy, on the other hand, is broader. It’s about educating, raising awareness, and championing causes without necessarily pushing for a specific legislative outcome. All lobbying is advocacy, but not all advocacy is lobbying. Nonprofits can advocate as much as they want —it’s lobbying that has specific limits.

Lobbying Limits for Nonprofits

Tax-exempt nonprofits can lobby, but the IRS says it cannot be a “substantial part” of a nonprofit’s activities. What does “substantial” mean? Unfortunately, the IRS doesn’t give a clear answer, which is why many nonprofits who wish to lobby choose to file for the 501(h) election.

  • The 501(h) election doesn’t increase your lobbying limit, it just makes the limit clearer – a certain percentage of your budget based on total expenditures. (Orgs with annual expenditures of $500,000 or less can spend up to 20% on lobbying.) This tool and this calculator can help you determine your lobbying limit under the 501(h) election.
  • If your organization hasn’t opted for the 501(h) election, your lobbying is assessed under the insubstantial part test, which is less specific. This tool can help you estimate your lobbying limit under this test.
  • In Montana, nonprofits must apply for a license to lobby if they meet certain criteria and thresholds. Learn about Montana-specific lobbying rules here.

Types of Lobbying

Now that you know about lobbying limits, let’s break down the two main types of lobbying activities that count toward those limits, and what they involve.

  1. Direct Lobbying: Communicating directly with lawmakers (or their staff) about specific legislation and expressing a viewpoint. Example: Meeting with your state senator to explain why your community needs them to support a proposed housing bill.
  2. Grassroots Lobbying: Encouraging the public to contact lawmakers about specific legislation. Example: Sending an email to your supporters, asking them to call their representatives about a proposed healthcare bill.

What’s a No-Go?

While nonprofits are allowed to lobby within limits, they can’t engage in any partisan political activity. This means no endorsing or opposing candidates, no donating to their campaigns, and no using your resources to influence elections.

You can, however, advocate for or against ballot measures, engage in nonpartisan voter education like hosting candidate forums or sharing voter guides that don’t favor one candidate, or encouraging your community to register to vote.

Resources to Help You Navigate Lobbying

To help our team, our grantee partners and other local nonprofits better understand how organizations can influence policy effectively within legal limits, we recently organized a lunch-and-learn in partnership with Alliance for Justice. It was packed with practical advice and actionable steps to make lobbying easier to navigate.

If you missed the session, request a recording of the training by reaching out to us at [email protected]. Find a PDF of the presentation here.

You can also check out these great resources from Alliance for Justice:

And – listen to these episodes from Rules of the Game: the Bolder Advocacy Podcast:

Have questions about lobbying? Reach out to Alliance for Justice – their attorney-trainers are available every weekday to offer free technical assistance. You can submit your questions online, email them at [email protected], or call them at 866-NP-LOBBY (866-675-6229).