Guidance

Guidelines for Public Employees:

Lobbying Guidelines for Public Employees

For those of you who work for a public agency, supported by local, county or state governments, there are certain lobbying restrictions for you when working on activities that will influence the outcome of legislation.

ALWAYS CHECK YOUR AGENCY POLICIES, GET WRITTEN COPIES, AND ABIDE BY THEM. Policies vary. All are based on federal and state law, while some agencies add their own requirements. Follow the rules.

The First Amendment protects your right to lobby members of Congress, congressional staff, congressional committees and other elected officials. However, your actions cannot be interpreted as official announcements of federal or state or local policy coming from your institution. When contacting members of Congress, identify yourself as a concerned citizen in your community presenting your personal views.

At the same time, however, you shouldn’t feel like you have to conceal your employer. You are allowed to tell the person you are talking with that you work for a facility that is supported by the county, state or federal government, as long you make it clear that you are speaking on behalf of your personal views and/or the National Council of State Directors of Adult Education and that the views expressed are your own.

Generally speaking, appropriated public funds may not be used, directly or indirectly, to pay for lobbying activities. This means that anything paid for by the government, including your salary, telephone, copier, letterhead, fax machine, postage, etc., may not be used to support your lobbying activities. Again, check your agency policies and understand what is expected of you. Exercise discretion.

However, personal funds or funds provided by non-governmental organizations may be used to support these activities.

Your participation in the democratic process can be personally satisfying and is critical to adult education’s success, so please do not feel discouraged from lobbying. If you have any questions or need additional information, please contact your local ethics official.

Lobbying Guidelines for 501(c)(3) Organizations

It is important to know what activities tax-exempt, non-profit [i.e., 501(c)(3)] organizations can conduct. Recent rulings by the IRS have clarified many of the uncertainties expressed by some in the non-profit sector: while lobbying by non-profits is entirely lawful, political activity is strictly prohibited. So, what is the difference between lobbying and political activity?

A Resource: If you have questions regarding appropriate activities, feel free to contact Marsha Tait at ProLiteracy at (315) 422.9121 ext 322 or mtait@proliteracy.org.

Lobbying. A 501(c)(3) may not engage in substantial lobbying, a term that has never been clearly defined. A general guideline is to spend less than 5 percent of an organization’s budget on lobbying, although the Internal Revenue Service (IRS) has not officially sanctioned this. Lobbying, for this purpose, includes funds used to retain a lobbyist and probably covers communication to members and the public for or against a particular piece of legislation.

Fortunately, organizations that wish to avoid the vague “insubstantiality of expenditures” test may utilize section 501(h) of the Internal Revenue Code. This “safe harbor” specifies exact dollar limits for 501(c)(3) lobbying expenditures, based on a budgetary sliding scale, with an annual cap of $1 million. A 501(h) election carries advantages beyond a degree of certainty, including, in many cases, the imposition of penalty taxes rather than loss of tax exemption, and clearly specified favorable exclusions, such as time donated by volunteers and funds spent on executive branch advocacy. However, an organization may not spend more than 25 percent of its total lobbying budget on grassroots lobbying, efforts to encourage action by the general public.

A 501(c)(3) exempt organization makes a 501(h) election by filing Form 5768 with the IRS, thereafter maintaining detailed records. A reasonable allocation of expenses is required for activities that include both lobbying and nonlobbying purposes. A 501(h) election is not available to certain supporting organizations that receive their public charity status through support of another 501(c)(6) association.

Incidentally, a 501(c)(3), whether it makes a 501(h) election or not, is not affected by the 1993 law eliminating the deductibility of lobbying expenses.

Political activities. The law clearly prohibits 501(c)(3)s from engaging, directly or indirectly, in political campaigns, whether through establishing a PAC or contributing funds to candidates. The only legal way to engage in political activity would be to create a separate entity under a permissible tax code provision, preferably 501(c)(6). This is not as daunting as it may appear, although legal counsel is essential in setting up the structure and filing the proper documents. The 501(c)(3) and (6) entities may share boards of directors, headquarters, and even staff, but strict financial separation is required.

Political activity is defined as influencing the outcome of an election-federal, state, or local-and is not permitted under the law. Failure to comply with the law could cause the organizations to lose both its tax-exempt status and its ability to assure donors that their contributions are tax deductible.

As a 501(c)(3) you can:

As a 501(c)(3) you cannot:

While this information is intended as a resource guide, it in no way represents legal advice. You may wish to seek legal counsel for specific legal advice on what is/is not permitted under the law. (Provided by the Independent Sector)