What are the Legal Rules Regarding Nonprofit Lobbying?
Organizations operating under 501(c)3 nonprofit status are not allowed to devote more than an ‘insubstantial’ portion of their resources to lobbying. Although a definition of insubstantial is not provided in the law, an organization that devotes no more than 5% of its total efforts to lobbying is likely well within legal limits.
Further, the definition of lobbying in this law is very specific. It refers only to support of or opposition to or a call to action on specific legislation. It does not include general advocacy on public issues or public policy, advocacy on regulations, appearances before regulatory agencies or other non-legislative bodies or even nonpartisan analysis of legislation. In general, efforts to educate the public or legislators about a particular topic or piece of legislation are not considered lobbying.
Keep in mind – nonprofits should never publically endorse political candidates or donate money to a political campaign. This is an entirely different issue from lobbying, and no amount of this sort of political activity is acceptable. Nonprofits can be involved with encouraging people to vote or preventing barriers to voting, but should be careful to follow the rules related to these activities. For detailed information on what is legal, visit the Center for Lobbying in the Public Interest website.
There are also options available for nonprofits interested in devoting more of their time to lobbying, including taking a 501(h) election or establishing a separate 501(c)4 tax-exempt organization.
Visit the IRS website for a very detailed discussion of IRS rules related to nonprofit lobbying.