Nonprofits and policy, Part 3

[Editor’s note: This is the third in series of articles looking at the policy work of nonprofits and philanthropic organizations.]

By Ret Boney

While nonprofits are permitted by law to lobby elected representatives, many don’t understand what they can and can’t do, and therefore aren’t as effective as they could be, experts say.

“In the First Amendment, people have the right to petition the government,” says Diana Aviv, president and CEO of Independent Sector, a national network of nonprofit groups.  “That is a constitutional right and we take that obligation very seriously.”

There are about 1.4 million nonprofit organizations in the U.S., Aviv says, and lawmakers count on them to provide input on laws and policies affecting their communities.

Congress distributes over $2 trillion each year, she says, and while about half of that is earmarked for entitlement programs like Social Security, lawmakers must decide how to spend the remainder.

“It’s extremely important for charitable organizations to make sure lawmakers have all the facts before them,” Aviv says.

But for many nonprofits, engagement in the world of politics and legislation happens only in crisis situations, says Rob Schofield, director of public policy and government relations for the N.C. Center for Nonprofits in Raleigh.

“Thinking about policy issues and how they affect your funding and the specifics of your mission ought to be a given for nonprofits,” he says.

All 501(c)3 nonprofits are prohibited from implicitly or explicitly endorsing, opposing or funding any political candidate, but there are many other ways they can make their voices heard without running afoul of the IRS, experts say.

With the exception of private foundations, all nonprofits can directly lobby lawmakers or their staffs to vote for or against specific legislation and they can educate lawmakers about public-interest issues.

They are allowed to conduct nonpartisan candidate debates and can work to have their groups’ agendas added to the platforms of political parties.

They can engage in nonpartisan public-education efforts, canvass the public to find out more about their views on particular issues, and persuade the public to contact their representatives about pending legislation.

And they are allowed to hold nonpartisan voter registration drives and get-out-the-vote efforts.

“Sometimes people are unnecessarily intimidated by the policy process,” Schofield says.  “They don’t realize that the rules and laws governing nonprofits and the issues they care about are not immutable.”

For those interested in taking part in the public policy process, there are ways to take the mystery out of the do’s and don’ts of lobbying and advocacy work, says Abby Levine, counsel for the Alliance for Justice, a Washington, D.C.-based group that promotes public-interest advocacy.

Nonprofits are permitted to lobby elected officials or their staffs, according to the IRS, as long as lobbying remains an “insubstantial part” of a group’s overall efforts, says Levine.

But the IRS provides little guidance on what qualifies as lobbying or how to quantify an “insubstantial part.”

“While the ‘insubstantial part’ test is the default, it’s usually not the best option for most organizations,” Levine says, noting its ambiguity.

Nonprofits engaging in policy and advocacy can clarify their activities by choosing a special IRS designation, called a 501(h) election, which provides them with specific guidelines on how much lobbying and what types of lobbying they can legally do.

“By making the 501(h) election, charities are able to speak more freely on behalf of their constituents and their interests,” says Levine.  “They have a better idea of what constitutes lobbying and, more importantly, what doesn’t constitute lobbying.”

Either way, it is important for nonprofits to realize they have an effective tool at their disposal, experts say.

“It’s an opportunity for citizens who care about issues to communicate with lawmakers about what’s happening in their communities,” says Aviv.  “Without that input, lawmakers might not be able to make informed decisions.”

And while a more diverse set of nonprofit advocates emerge over the last decade, Schofield says, there is more to be done.

“If you care enough about a cause to create an organization, and for some, dedicate your life to it,” he says, “you should want to speak out about it.”

For information on what nonprofits can and cannot do, contact the Alliance for Justice, Independent Sector or the N.C. Center for Nonprofits.

Other stories in series:

Part 1: Policy and advocacy should be part of nonprofit toolkit, experts say.
Part 2: Foundations can influence policy without hurting status, experts say.

Stories in related series:

Part 1: Tight budgets, lack of flexible funding deter many nonprofits. 
Part 2: Lack of staff capacity and skills limit policy work by many nonprofits.
Part 3: Fear of retribution stifles voices of many charities, experts say.

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